Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2019

Book Values and Fair Values of Long-term Debt

	December 31,
	2019				2018
Company	Book Value		Fair Value		Book Value		Fair Value
	(in millions)
AEP (a)	$	26,725.5	$	30,172.0	$	23,346.7	$	24,093.9
AEP Texas	4,558.4		4,981.5		3,881.3		3,964.6
AEPTCo	3,427.3		3,868.0		2,823.0		2,782.4
APCo	4,363.8		5,253.1		4,062.6		4,473.3
I&M	3,050.2		3,453.8		3,035.4		3,070.2
OPCo	2,082.0		2,554.3		1,716.6		1,919.7
PSO	1,386.2		1,603.3		1,287.0		1,361.9
SWEPCo	2,655.6		2,927.9		2,713.4		2,670.2

(a) The fair value amount includes debt related to AEP’s Equity Units issued in March 2019 and had a fair value of $871 million as of December 31, 2019. See “Equity Units” section of Note 14 for additional information.

Other Temporary Investments

	December 31, 2019
			Gross		Gross
			Unrealized		Unrealized		Fair
Other Temporary Investments	Cost		Gains		Losses		Value
	(in millions)
Restricted Cash and Other Cash Deposits (a)	$	214.7	$	—	$	—	$	214.7
Fixed Income Securities – Mutual Funds (b)	123.2		0.1		—		123.3
Equity Securities – Mutual Funds	29.2		21.3		—		50.5
Total Other Temporary Investments	$	367.1	$	21.4	$	—	$	388.5

	December 31, 2018
			Gross		Gross
			Unrealized		Unrealized			Fair
Other Temporary Investments	Cost		Gains		Losses			Value
	(in millions)
Restricted Cash and Other Cash Deposits (a)	$	230.6	$	—	$	—		$	230.6
Fixed Income Securities – Mutual Funds (b)	106.6		—		(2.3		)	104.3
Equity Securities – Mutual Funds	17.8		16.4		—			34.2
Total Other Temporary Investments	$	355.0	$	16.4	$	(2.3	)	$	369.1

(a) Primarily represents amounts held for the repayment of debt.

(b)

Primarily short and intermediate maturities which may be sold and do not contain maturity dates.

Debt and Equity Securities Within Other Temporary Investments

	Years Ended December 31,
	2019		2018		2017
	(in millions)
Proceeds from Investment Sales	$	21.2	$	—	$	—
Purchases of Investments	45.0		3.1		14.2
Gross Realized Gains on Investment Sales	—		—		—
Gross Realized Losses on Investment Sales	0.4		—		—

Nuclear Trust Fund Investments

	December 31,
	2019							2018
			Gross		Other-Than-					Gross		Other-Than-
	Fair		Unrealized		Temporary			Fair		Unrealized		Temporary
	Value		Gains		Impairments			Value		Gains		Impairments
	(in millions)
Cash and Cash Equivalents	$	15.3	$	—	$	—		$	22.5	$	—	$	—
Fixed Income Securities:
United States Government	1,112.5		55.5		(6.1		)	996.1		26.7		(7.1		)
Corporate Debt	72.4		5.3		(1.6		)	52.4		1.1		(1.9		)
State and Local Government	7.6		0.7		(0.2		)	8.6		0.6		(0.2		)
Subtotal Fixed Income Securities	1,192.5		61.5		(7.9		)	1,057.1		28.4		(9.2		)
Equity Securities - Domestic (a)	1,767.9		1,144.4		—			1,395.3		766.3		—
Spent Nuclear Fuel and Decommissioning Trusts	$	2,975.7	$	1,205.9	$	(7.9	)	$	2,474.9	$	794.7	$	(9.2	)

(a)

Amount reported as Gross Unrealized Gains includes unrealized gains of $1.1 billion and $784 million and unrealized losses of $5 million and $18 million as of December 31, 2019 and 2018, respectively. AEP adopted ASU 2016-01 during the first quarter of 2018 by means of a modified retrospective approach. Due to the adoption of the ASU, Other-Than-Temporary Impairments are no longer applicable to Equity Securities with readily determinable fair values.

Securities Activity Within the Decommissioning and SNF Trusts

	Years Ended December 31,
	2019		2018		2017
	(in millions)
Proceeds from Investment Sales	$	1,473.0	$	2,010.0	$	2,256.3
Purchases of Investments	1,531.0		2,064.7		2,300.5
Gross Realized Gains on Investment Sales	76.5		47.5		200.7
Gross Realized Losses on Investment Sales	24.3		32.8		146.0

Contractual Maturities, Fair Value of Debt Securities

	Fair Value of Fixed
	Income Securities
	(in millions)
Within 1 year	$	371.0
After 1 year through 5 years	386.2
After 5 years through 10 years	217.3
After 10 years	218.0
Total	$	1,192.5

Fair Value, Assets and Liabilities Measured on Recurring Basis

AEP

Assets and Liabilities Measured at Fair Value on a Recurring Basis
December 31, 2019
	Level 1		Level 2		Level 3		Other			Total
Assets:	(in millions)
Other Temporary Investments
Restricted Cash and Other Cash Deposits (a)	$	197.6	$	—	$	—	$	17.1		$	214.7
Fixed Income Securities – Mutual Funds	123.3		—		—		—			123.3
Equity Securities – Mutual Funds (b)	50.5		—		—		—			50.5
Total Other Temporary Investments	371.4		—		—		17.1			388.5
Risk Management Assets
Risk Management Commodity Contracts (c) (d)	4.0		440.1		369.2		(404.5		)	408.8
Cash Flow Hedges:
Commodity Hedges (c)	—		15.0		3.2		(6.7		)	11.5
Interest Rate Hedges	—		4.6		—		—			4.6
Fair Value Hedges	—		14.5		—		—			14.5
Total Risk Management Assets	4.0		474.2		372.4		(411.2		)	439.4
Spent Nuclear Fuel and Decommissioning Trusts
Cash and Cash Equivalents (e)	6.7		—		—		8.6			15.3
Fixed Income Securities:
United States Government	—		1,112.5		—		—			1,112.5
Corporate Debt	—		72.4		—		—			72.4
State and Local Government	—		7.6		—		—			7.6
Subtotal Fixed Income Securities	—		1,192.5		—		—			1,192.5
Equity Securities – Domestic (b)	1,767.9		—		—		—			1,767.9
Total Spent Nuclear Fuel and Decommissioning Trusts	1,774.6		1,192.5		—		8.6			2,975.7
Total Assets	$	2,150.0	$	1,666.7	$	372.4	$	(385.5	)	$	3,803.6
Liabilities:
Risk Management Liabilities
Risk Management Commodity Contracts (c) (d)	$	3.8	$	450.0	$	224.0	$	(438.8	)	$	239.0
Cash Flow Hedges:
Commodity Hedges (c)	—		105.3		38.5		(6.7		)	137.1
Total Risk Management Liabilities	$	3.8	$	555.3	$	262.5	$	(445.5	)	$	376.1

AEP

Assets and Liabilities Measured at Fair Value on a Recurring Basis
December 31, 2018
	Level 1		Level 2		Level 3		Other			Total
Assets:	(in millions)
Other Temporary Investments
Restricted Cash and Other Cash Deposits (a)	$	221.5	$	—	$	—	$	9.1		$	230.6
Fixed Income Securities – Mutual Funds	104.3		—		—		—			104.3
Equity Securities – Mutual Funds (b)	34.2		—		—		—			34.2
Total Other Temporary Investments	360.0		—		—		9.1			369.1
Risk Management Assets
Risk Management Commodity Contracts (c) (f)	3.8		326.5		340.9		(288.5		)	382.7
Cash Flow Hedges:
Commodity Hedges (c)	—		24.1		12.7		(2.7		)	34.1
Total Risk Management Assets	3.8		350.6		353.6		(291.2		)	416.8
Spent Nuclear Fuel and Decommissioning Trusts
Cash and Cash Equivalents (e)	12.3		—		—		10.2			22.5
Fixed Income Securities:
United States Government	—		996.1		—		—			996.1
Corporate Debt	—		52.4		—		—			52.4
State and Local Government	—		8.6		—		—			8.6
Subtotal Fixed Income Securities	—		1,057.1		—		—			1,057.1
Equity Securities – Domestic (b)	1,395.3		—		—		—			1,395.3
Total Spent Nuclear Fuel and Decommissioning Trusts	1,407.6		1,057.1		—		10.2			2,474.9
Total Assets	$	1,771.4	$	1,407.7	$	353.6	$	(271.9	)	$	3,260.8
Liabilities:
Risk Management Liabilities
Risk Management Commodity Contracts (c) (f)	$	4.2	$	327.0	$	185.6	$	(274.7	)	$	242.1
Cash Flow Hedges:
Commodity Hedges (c)	—		24.8		36.8		(2.7		)	58.9
Fair Value Hedges	—		17.4		—		—			17.4
Total Risk Management Liabilities	$	4.2	$	369.2	$	222.4	$	(277.4	)	$	318.4

AEP Texas

Assets and Liabilities Measured at Fair Value on a Recurring Basis

December 31, 2019

	Level 1		Level 2		Level 3		Other		Total
Assets:	(in millions)
Restricted Cash for Securitized Funding	$	154.7	$	—	$	—	$	—	$	154.7

December 31, 2018

	Level 1		Level 2		Level 3		Other			Total
Assets:	(in millions)
Restricted Cash for Securitized Funding	$	156.7	$	—	$	—	$	—		$	156.7
Liabilities:
Risk Management Liabilities
Risk Management Commodity Contracts (c)	$	—	$	0.7	$	—	$	(0.5	)	$	0.2

APCo

Assets and Liabilities Measured at Fair Value on a Recurring Basis

December 31, 2019

	Level 1		Level 2		Level 3		Other			Total
Assets:	(in millions)
Restricted Cash for Securitized Funding	$	23.5	$	—	$	—	$	—		$	23.5
Risk Management Assets
Risk Management Commodity Contracts (c) (g)	—		84.6		40.5		(85.6		)	39.5
Total Assets	$	23.5	$	84.6	$	40.5	$	(85.6	)	$	63.0
Liabilities:
Risk Management Liabilities
Risk Management Commodity Contracts (c) (g)	$	—	$	84.0	$	2.8	$	(84.9	)	$	1.9

December 31, 2018

	Level 1		Level 2		Level 3		Other			Total
Assets:	(in millions)
Restricted Cash for Securitized Funding	$	25.6	$	—	$	—	$	—		$	25.6
Risk Management Assets
Risk Management Commodity Contracts (c) (g)	0.1		59.1		58.3		(59.4		)	58.1
Total Assets	$	25.7	$	59.1	$	58.3	$	(59.4	)	$	83.7
Liabilities:
Risk Management Liabilities
Risk Management Commodity Contracts (c) (g)	$	0.2	$	58.4	$	0.5	$	(58.5	)	$	0.6

I&M

Assets and Liabilities Measured at Fair Value on a Recurring Basis

December 31, 2019

	Level 1		Level 2		Level 3		Other			Total
Assets:	(in millions)
Risk Management Assets
Risk Management Commodity Contracts (c) (g)	$	—	$	59.5	$	8.0	$	(57.6	)	$	9.9
Spent Nuclear Fuel and Decommissioning Trusts
Cash and Cash Equivalents (e)	6.7		—		—		8.6			15.3
Fixed Income Securities:
United States Government	—		1,112.5		—		—			1,112.5
Corporate Debt	—		72.4		—		—			72.4
State and Local Government	—		7.6		—		—			7.6
Subtotal Fixed Income Securities	—		1,192.5		—		—			1,192.5
Equity Securities - Domestic (b)	1,767.9		—		—		—			1,767.9
Total Spent Nuclear Fuel and Decommissioning Trusts	1,774.6		1,192.5		—		8.6			2,975.7
Total Assets	$	1,774.6	$	1,252.0	$	8.0	$	(49.0	)	$	2,985.6
Liabilities:
Risk Management Liabilities
Risk Management Commodity Contracts (c) (g)	$	—	$	53.4	$	2.2	$	(55.1	)	$	0.5

December 31, 2018

	Level 1		Level 2		Level 3		Other			Total
Assets:	(in millions)
Risk Management Assets
Risk Management Commodity Contracts (c) (g)	$	—	$	42.1	$	10.3	$	(43.2	)	$	9.2
Spent Nuclear Fuel and Decommissioning Trusts
Cash and Cash Equivalents (e)	12.3		—		—		10.2			22.5
Fixed Income Securities:
United States Government	—		996.1		—		—			996.1
Corporate Debt	—		52.4		—		—			52.4
State and Local Government	—		8.6		—		—			8.6
Subtotal Fixed Income Securities	—		1,057.1		—		—			1,057.1
Equity Securities - Domestic (b)	1,395.3		—		—		—			1,395.3
Total Spent Nuclear Fuel and Decommissioning Trusts	1,407.6		1,057.1		—		10.2			2,474.9
Total Assets	$	1,407.6	$	1,099.2	$	10.3	$	(33.0	)	$	2,484.1
Liabilities:
Risk Management Liabilities
Risk Management Commodity Contracts (c) (g)	$	0.1	$	41.2	$	1.4	$	(42.3	)	$	0.4

OPCo

Assets and Liabilities Measured at Fair Value on a Recurring Basis

December 31, 2019

	Level 1		Level 2		Level 3		Other		Total
Liabilities:	(in millions)
Risk Management Liabilities
Risk Management Commodity Contracts (c) (g)	$	—	$	—	$	103.6	$	—	$	103.6

December 31, 2018

	Level 1		Level 2		Level 3		Other			Total
Assets:	(in millions)
Restricted Cash for Securitized Funding	$	27.6	$	—	$	—	$	—		$	27.6
Liabilities:
Risk Management Liabilities
Risk Management Commodity Contracts (c) (g)	$	—	$	0.8	$	99.4	$	(0.6	)	$	99.6

PSO

Assets and Liabilities Measured at Fair Value on a Recurring Basis

December 31, 2019

	Level 1		Level 2		Level 3		Other			Total
Assets:	(in millions)
Risk Management Assets
Risk Management Commodity Contracts (c) (g)	$	—	$	—	$	16.3	$	(0.5	)	$	15.8
Liabilities:
Risk Management Liabilities
Risk Management Commodity Contracts (c) (g)	$	—	$	—	$	0.5	$	(0.5	)	$	—

December 31, 2018

	Level 1		Level 2		Level 3		Other			Total
Assets:	(in millions)
Risk Management Assets
Risk Management Commodity Contracts (c) (g)	$	—	$	—	$	10.8	$	(0.4	)	$	10.4
Liabilities:
Risk Management Liabilities
Risk Management Commodity Contracts (c) (g)	$	—	$	0.3	$	1.3	$	(0.6	)	$	1.0

SWEPCo

Assets and Liabilities Measured at Fair Value on a Recurring Basis

December 31, 2019

	Level 1		Level 2		Level 3		Other			Total
Assets:	(in millions)
Risk Management Assets
Risk Management Commodity Contracts (c) (g)	$	—	$	—	$	6.5	$	(0.1	)	$	6.4
Liabilities:
Risk Management Liabilities
Risk Management Commodity Contracts (c) (g)	$	—	$	—	$	5.1	$	(0.1	)	$	5.0

December 31, 2018

	Level 1		Level 2		Level 3		Other			Total
Assets:	(in millions)
Risk Management Assets
Risk Management Commodity Contracts (c) (g)	$	—	$	—	$	5.6	$	(0.8	)	$	4.8
Liabilities:
Risk Management Liabilities
Risk Management Commodity Contracts (c) (g)	$	—	$	0.4	$	3.3	$	(1.1	)	$	2.6

(a) Amounts in “Other” column primarily represent cash deposits in bank accounts with financial institutions or third-parties. Level 1 and Level 2 amounts primarily represent investments in money market funds.

(b) Amounts represent publicly traded equity securities and equity-based mutual funds.

(c) Amounts in “Other” column primarily represent counterparty netting of risk management and hedging contracts and associated cash collateral under the accounting guidance for “Derivatives and Hedging.”

(d) The December 31, 2019 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 2 matures $(7) million in 2020 and $(3) million in periods 2021-2023; Level 3 matures $96 million in 2020, $36 million in periods 2021-2023, $25 million in periods 2024-2025 and $(12) million in periods 2026-2032. Risk management commodity contracts are substantially comprised of power contracts.

(e) Amounts in “Other” column primarily represent accrued interest receivables from financial institutions.  Level 1 amounts primarily represent investments in money market funds.

(f) The December 31, 2018 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 2 matures $(4) million in 2019, $1 million in periods 2020-2022, $1 million in periods 2023-2024 and $1 million in periods 2025-2032; Level 3 matures $108 million in 2019, $37 million in periods 2020-2022, $23 million in periods 2023-2024 and $(12) million in periods 2025-2032.  Risk management commodity contracts are substantially comprised of power contracts.

(g)

Substantially comprised of power contracts for the Registrant Subsidiaries.

Changes in Fair Value of Net Trading Derivatives Classified as Level 3

Year Ended December 31, 2019	AEP			APCo			I&M			OPCo			PSO			SWEPCo
	(in millions)
Balance as of December 31, 2018	$	131.2		$	57.8		$	8.9		$	(99.4	)	$	9.5		$	2.3
Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (a) (b)	15.8			(13.9		)	4.7			(0.9		)	13.5			6.0
Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (a)	(0.1		)	—			—			—			—			—
Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income (c)	(15.1		)	—			—			—			—			—
Settlements	(117.6		)	(42.5		)	(13.0		)	6.6			(23.0		)	(9.6		)
Transfers into Level 3 (d) (e)	(0.6		)	(0.5		)	(0.3		)	—			—			—
Transfers out of Level 3 (e)	35.6			(0.7		)	(0.4		)	—			—			—
Changes in Fair Value Allocated to Regulated Jurisdictions (f)	60.7			37.5			5.9			(9.9		)	15.8			2.7
Balance as of December 31, 2019	$	109.9		$	37.7		$	5.8		$	(103.6	)	$	15.8		$	1.4

Year Ended December 31, 2018	AEP			APCo			I&M			OPCo			PSO			SWEPCo
	(in millions)
Balance as of December 31, 2017	$	40.3		$	24.7		$	7.6		$	(132.4	)	$	6.2		$	5.9
Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (a) (b)	148.9			104.1			14.2			1.8			18.1			(4.8		)
Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (a)	9.8			—			—			—			—			—
Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income (c)	15.7			—			—			—			—			—
Settlements	(214.0		)	(127.9		)	(21.3		)	4.6			(24.3		)	(2.1		)
Transfers into Level 3 (d) (e)	15.8			—			—			—			—			—
Transfers out of Level 3 (e)	(1.6		)	—			(0.3		)	—			—			—
Changes in Fair Value Allocated to Regulated Jurisdictions (f)	116.3			56.9			8.7			26.6			9.5			3.3
Balance as of December 31, 2018	$	131.2		$	57.8		$	8.9		$	(99.4	)	$	9.5		$	2.3

Year Ended December 31, 2017	AEP			APCo			I&M			OPCo			PSO			SWEPCo
	(in millions)
Balance as of December 31, 2016	$	2.5		$	1.4		$	2.8		$	(119.0	)	$	0.7		$	0.7
Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (a) (b)	37.3			17.2			4.0			(1.4		)	3.1			6.0
Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (a)	33.6			—			—			—			—			—
Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income (c)	(18.8		)	—			—			—			—			—
Settlements	(50.6		)	(18.9		)	(7.1		)	7.4			(3.8		)	(6.8		)
Transfers into Level 3 (d) (e)	16.2			—			—			—			—			—
Transfers out of Level 3 (e)	(10.1		)	—			—			—			—			—
Changes in Fair Value Allocated to Regulated Jurisdictions (f)	30.2			25.0			7.9			(19.4		)	6.2			6.0
Balance as of December 31, 2017	$	40.3		$	24.7		$	7.6		$	(132.4	)	$	6.2		$	5.9

(a) Included in revenues on the statements of income.

(b) Represents the change in fair value between the beginning of the reporting period and the settlement of the risk management commodity contract.

(c) Included in cash flow hedges on the statements of comprehensive income.

(d) Represents existing assets or liabilities that were previously categorized as Level 2.

(e) Transfers are recognized based on their value at the beginning of the reporting period that the transfer occurred.

(f)

Relates to the net gains (losses) of those contracts that are not reflected on the statements of income.  These net gains (losses) are recorded as regulatory assets/liabilities or accounts payable.

Significant Unobservable Inputs for Level 3

Significant Unobservable Inputs

December 31, 2019

AEP

						Significant	Input/Range
	Fair Value				Valuation	Unobservable						Weighted
	Assets		Liabilities		Technique	Input	Low			High		Average (c)
	(in millions)
Energy Contracts	$	296.7	$	249.3	Discounted Cash Flow	Forward Market Price (a)	$	(0.05	)	$	177.30	$	31.31
Natural Gas Contracts	—		4.9		Discounted Cash Flow	Forward Market Price (b)	1.89			2.51		2.19
FTRs	75.7		8.3		Discounted Cash Flow	Forward Market Price (a)	(8.52		)	9.34		0.42
Total	$	372.4	$	262.5

December 31, 2018

						Significant	Input/Range
	Fair Value				Valuation	Unobservable						Weighted
	Assets		Liabilities		Technique	Input	Low			High		Average (c)
	(in millions)
Energy Contracts	$	257.1	$	212.5	Discounted Cash Flow	Forward Market Price (a)	$	(0.05	)	$	176.57	$	33.07
Natural Gas Contracts	—		2.5		Discounted Cash Flow	Forward Market Price (b)	2.18			3.54		2.47
FTRs	96.5		7.4		Discounted Cash Flow	Forward Market Price (a)	(11.68		)	17.79		1.09
Total	$	353.6	$	222.4

APCo

Significant Unobservable Inputs

December 31, 2019

						Significant	Input/Range
	Fair Value				Valuation	Unobservable						Weighted
	Assets		Liabilities		Technique	Input (a)	Low			High		Average (c)
	(in millions)
Energy Contracts	$	5.7	$	2.6	Discounted Cash Flow	Forward Market Price	$	12.70		$	41.20	$	25.92
FTRs	34.8		0.2		Discounted Cash Flow	Forward Market Price	(0.14		)	7.08		1.70
Total	$	40.5	$	2.8

December 31, 2018

						Significant	Input/Range
	Fair Value				Valuation	Unobservable					Weighted
	Assets		Liabilities		Technique	Input (a)	Low		High		Average (c)
	(in millions)
Energy Contracts	$	2.4	$	0.5	Discounted Cash Flow	Forward Market Price	$	16.82	$	62.65	$	37.00
FTRs	55.9		—		Discounted Cash Flow	Forward Market Price	0.10		15.16		3.27
Total	$	58.3	$	0.5

I&M

Significant Unobservable Inputs

December 31, 2019

						Significant	Input/Range
	Fair Value				Valuation	Unobservable						Weighted
	Assets		Liabilities		Technique	Input (a)	Low			High		Average (c)
	(in millions)
Energy Contracts	$	3.4	$	1.5	Discounted Cash Flow	Forward Market Price	$	12.70		$	41.20	$	25.92
FTRs	4.6		0.7		Discounted Cash Flow	Forward Market Price	(0.75		)	4.07		0.74
Total	$	8.0	$	2.2

December 31, 2018

						Significant	Input/Range
	Fair Value				Valuation	Unobservable						Weighted
	Assets		Liabilities		Technique	Input (a)	Low			High		Average (c)
	(in millions)
Energy Contracts	$	1.4	$	0.9	Discounted Cash Flow	Forward Market Price	$	16.82		$	62.65	$	37.00
FTRs	8.9		0.5		Discounted Cash Flow	Forward Market Price	(2.11		)	6.21		1.06
Total	$	10.3	$	1.4

OPCo

Significant Unobservable Inputs

December 31, 2019

Significant

Input/Range

Fair Value

Valuation

Unobservable

Weighted

Assets

Liabilities

Technique

Input (a)

Low

High

Average (c)

(in millions)

Energy Contracts

$

—

$

103.6

Discounted Cash Flow

Forward Market Price

$

29.23

$

61.43

$

42.46

December 31, 2018

Significant

Input/Range

Fair Value

Valuation

Unobservable

Weighted

Assets

Liabilities

Technique

Input (a)

Low

High

Average (c)

(in millions)

Energy Contracts

$

—

$

99.4

Discounted Cash Flow

Forward Market Price

$

26.29

$

62.74

$

42.50

PSO

Significant Unobservable Inputs

December 31, 2019

						Significant	Input/Range
	Fair Value				Valuation	Unobservable						Weighted
	Assets		Liabilities		Technique	Input (a)	Low			High		Average (c)
	(in millions)
FTRs	$	16.3	$	0.5	Discounted Cash Flow	Forward Market Price	$	(8.52	)	$	0.85	$	(2.31	)

December 31, 2018

						Significant	Input/Range
	Fair Value				Valuation	Unobservable						Weighted
	Assets		Liabilities		Technique	Input (a)	Low			High		Average (c)
	(in millions)
FTRs	$	10.8	$	1.3	Discounted Cash Flow	Forward Market Price	$	(11.68	)	$	10.30	$	(1.40	)

SWEPCo

Significant Unobservable Inputs

December 31, 2019

						Significant	Input/Range
	Fair Value				Valuation	Unobservable						Weighted
	Assets		Liabilities		Technique	Input	Low			High		Average (c)
	(in millions)
Natural Gas Contracts	$	—	$	4.9	Discounted Cash Flow	Forward Market Price (b)	$	1.89		$	2.51	$	2.18
FTRs	6.5		0.2		Discounted Cash Flow	Forward Market Price (a)	(8.52		)	0.85		(2.31		)
Total	$	6.5	$	5.1

December 31, 2018

						Significant	Input/Range
	Fair Value				Valuation	Unobservable						Weighted
	Assets		Liabilities		Technique	Input	Low			High		Average (c)
	(in millions)
Natural Gas Contracts	$	—	$	2.5	Discounted Cash Flow	Forward Market Price (b)	$	2.18		$	3.54	$	2.47
FTRs	5.6		0.8		Discounted Cash Flow	Forward Market Price (a)	(11.68		)	10.30		(1.40		)
Total	$	5.6	$	3.3

(a) Represents market prices in dollars per MWh.

(b) Represents market prices in dollars per MMBtu.

(c)

The weighted average is the product of the forward market price of the underlying commodity and volume weighted by term.

Sensitivity of Fair Value Measurements

Uncertainty of Fair Value Measurements

Significant Unobservable Input	Position	Change in Input	Impact on Fair Value Measurement
Forward Market Price	Buy	Increase (Decrease)	Higher (Lower)
Forward Market Price	Sell	Increase (Decrease)	Lower (Higher)