Derivatives and Hedging (Tables)

3 Months Ended

Mar. 31, 2012

Derivatives and Hedging (Tables) [Abstract]

Notional Volume of Derivative Instruments

Notional Volume of Derivative Instruments
		Volume
		March 31,		December 31,		Unit of
		2012		2011		Measure
Primary Risk Exposure		(in millions)
Commodity:
	Power		524		609	MWHs
	Coal		19		21	Tons
	Natural Gas		113		100	MMBtus
	Heating Oil and Gasoline		4		6	Gallons
	Interest Rate	$	202	$	226	USD
Interest Rate and Foreign Currency		$	803	$	907	USD

Fair Value of Derivative Instruments

Fair Value of Derivative Instruments
March 31, 2012
		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		$	1,298	$	41	$	1	$	(1,094)	$	246
Long-term Risk Management Assets			758		21		-		(354)		425
Total Assets			2,056		62		1		(1,448)		671
Current Risk Management Liabilities			1,275		63		13		(1,166)		185
Long-term Risk Management Liabilities			604		25		2		(392)		239
Total Liabilities			1,879		88		15		(1,558)		424
Total MTM Derivative Contract Net Assets
	(Liabilities)	$	177	$	(26)	$	(14)	$	110	$	247
Fair Value of Derivative Instruments
December 31, 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		$	852	$	24	$	-	$	(683)	$	193
Long-term Risk Management Assets			641		15		-		(253)		403
Total Assets			1,493		39		-		(936)		596
Current Risk Management Liabilities			847		29		20		(746)		150
Long-term Risk Management Liabilities			483		15		22		(325)		195
Total Liabilities			1,330		44		42		(1,071)		345
Total MTM Derivative Contract Net Assets
	(Liabilities)	$	163	$	(5)	$	(42)	$	135	$	251

(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 March 31, 2012 and 2011
Location of Gain (Loss)	2012			2011
	(in millions)
Utility Operations Revenues	$	10	$	20
Other Revenues		3		2
Regulatory Assets (a)		(21)		2
Regulatory Liabilities (a)		14		8
Total Gain on Risk Management Contracts	$	6	$	32

(a)Represents realized and unrealized gains and losses subject to regulatory accounting treatmentrecorded 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 March 31, 2012
					Interest Rate
					and Foreign
			Commodity		Currency		Total
			(in millions)
Balance in AOCI as of December 31, 2011			$	(3)	$	(20)	$	(23)
Changes in Fair Value Recognized in AOCI				(20)		1		(19)
Amount of (Gain) or Loss Reclassified from AOCI
	to Statement of Income/within Balance Sheet:
		Utility Operations Revenues		-		-		-
		Other Revenues		(1)		-		(1)
		Purchased Electricity for Resale		7		-		7
		Interest Expense		-		1		1
		Regulatory Assets (a)		1		-		1
		Regulatory Liabilities (a)		-		-		-
Balance in AOCI as of March 31, 2012			$	(16)	$	(18)	$	(34)
Total Accumulated Other Comprehensive Income (Loss) Activity for Cash Flow Hedges
For the Three Months Ended March 31, 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				2		(1)		1
Amount of (Gain) or Loss Reclassified from AOCI
	to Statement of Income/within Balance Sheet:
		Utility Operations Revenues		-		-		-
		Other Revenues		(1)		-		(1)
		Purchased Electricity for Resale		-		-		-
		Interest Expense		-		1		1
		Regulatory Assets (a)		-		-		-
		Regulatory Liabilities (a)		-		-		-
Balance in AOCI as of March 31, 2011			$	8	$	4	$	12

(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
March 31, 2012
				Interest Rate
				and Foreign
		Commodity		Currency		Total
		(in millions)
Hedging Assets (a)		$	29	$	-	$	29
Hedging Liabilities (a)			55		15		70
AOCI Gain (Loss) Net of Tax			(16)		(18)		(34)
Portion Expected to be Reclassified to Net
	Income During the Next Twelve Months		(14)		(3)		(17)
Impact of Cash Flow Hedges on the Condensed Balance Sheet
December 31, 2011
				Interest Rate
				and Foreign
		Commodity		Currency		Total
		(in millions)
Hedging Assets (a)		$	20	$	-	$	20
Hedging Liabilities (a)			25		42		67
AOCI Gain (Loss) Net of Tax			(3)		(20)		(23)
Portion Expected to be Reclassified to Net
	Income During the Next Twelve Months		(3)		(2)		(5)

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

Collateral Required Under Various Triggering Events

		March 31,		December 31,
		2012		2011
		(in millions)
Liabilities for Derivative Contracts with Credit Downgrade Triggers		$	21	$	32
Amount of Collateral AEP Subsidiaries Would Have Been
	Required to Post		50		39
Amount Attributable to RTO and ISO Activities			48		38

Liabilities Subject to Cross Default Provisions

	March 31,		December 31,
	2012		2011
	(in millions)
Liabilities for Contracts with Cross Default Provisions Prior to Contractual
Netting Arrangements	$	716	$	515
Amount of Cash Collateral Posted		2		56
Additional Settlement Liability if Cross Default Provision is Triggered		354		291