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Derivatives and Hedging (Tables)

9 Months Ended

Sep. 30, 2021

Notional Volume of Derivative Instruments

September 30, 2021


Primary Risk Exposure	Unit of Measure	AEP		AEP Texas		APCo		I&M		OPCo		PSO		SWEPCo
		(in millions)
Commodity:
Power	MWhs	341.9		—		55.4		23.1		2.8		18.7		5.4

Natural Gas	MMBtus	28.1		—		—		—		—		—		5.2
Heating Oil and Gasoline	Gallons	7.8		2.0		1.2		0.7		1.5		0.9		1.1
Interest Rate	USD	$	116.5	$	—	$	—	$	—	$	—	$	—	$	—

Interest Rate on Long-term Debt	USD	$	1,250.0	$	—	$	—	$	—	$	—	$	—	$	—

December 31, 2020


Primary Risk Exposure	Unit of Measure	AEP		AEP Texas		APCo		I&M		OPCo		PSO		SWEPCo
		(in millions)
Commodity:
Power	MWhs	331.3		—		46.9		19.7		3.0		11.9		4.0

Natural Gas	MMBtus	26.9		—		—		—		—		—		7.9
Heating Oil and Gasoline	Gallons	6.9		1.8		1.1		0.6		1.4		0.7		0.9
Interest Rate	USD	$	129.8	$	—	$	—	$	—	$	—	$	—	$	—

Interest Rate on Long-term Debt	USD	$	1,150.0	$	—	$	200.0	$	—	$	—	$	—	$	—

CashCollateralNettingTableTextBlock

September 30, 2021

December 31, 2020

Cash Collateral

Received

Paid

Received

Paid

Netted Against

Risk Management

Company

Assets

Liabilities

Assets

Liabilities

(in millions)

AEP

309.7

38.3

3.4

6.8

APCo

0.6

10.7

0.4

—

I&M

0.3

17.4

1.7

—

Fair Value of Derivative Instruments

AEP


	September 30, 2021
	Risk Management Contracts		Hedging Contracts				Gross Amounts of Risk Management Assets/ Liabilities Recognized		Gross Amounts Offset in the Statement of Financial Position (b)		Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c)
Balance Sheet Location	Commodity (a)		Commodity (a)		Interest Rate (a)
	(in millions)
Current Risk Management Assets	$	1,005.5	$	321.1	$	8.3	$	1,334.9	$	(965.7)	$	369.2
Long-term Risk Management Assets	337.3		85.8		—		423.1		(144.8)		278.3
Total Assets	1,342.8		406.9		8.3		1,758.0		(1,110.5)		647.5

Current Risk Management Liabilities	834.5		33.1		—		867.6		(761.1)		106.5
Long-term Risk Management Liabilities	234.6		14.3		28.8		277.7		(78.1)		199.6
Total Liabilities	1,069.1		47.4		28.8		1,145.3		(839.2)		306.1

Total MTM Derivative Contract Net Assets (Liabilities)	$	273.7	$	359.5	$	(20.5)	$	612.7	$	(271.3)	$	341.4


	December 31, 2020
	Risk Management Contracts		Hedging Contracts				Gross Amounts of Risk Management Assets/ Liabilities Recognized		Gross Amounts Offset in the Statement of Financial Position (b)		Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c)
Balance Sheet Location	Commodity (a)		Commodity (a)		Interest Rate (a)
	(in millions)
Current Risk Management Assets	$	239.1	$	21.1	$	5.0	$	265.2	$	(170.5)	$	94.7
Long-term Risk Management Assets	275.9		18.0		—		293.9		(51.7)		242.2
Total Assets	515.0		39.1		5.0		559.1		(222.2)		336.9

Current Risk Management Liabilities	193.0		54.4		3.4		250.8		(172.0)		78.8
Long-term Risk Management Liabilities	222.2		60.1		4.1		286.4		(53.6)		232.8
Total Liabilities	415.2		114.5		7.5		537.2		(225.6)		311.6

Total MTM Derivative Contract Net Assets (Liabilities)	$	99.8	$	(75.4)	$	(2.5)	$	21.9	$	3.4	$	25.3

AEP Texas


	September 30, 2021
	Risk Management		Gross Amounts Offset		Net Amounts of Assets/Liabilities
	Contracts –		in the Statement of		Presented in the Statement of
Balance Sheet Location	Commodity (a)		Financial Position (b)		Financial Position (c)
	(in millions)
Current Risk Management Assets	$	0.8	$	(0.8)	$	—
Long-term Risk Management Assets	0.1		(0.1)		—
Total Assets	0.9		(0.9)		—

Current Risk Management Liabilities	—		—		—
Long-term Risk Management Liabilities	—		—		—
Total Liabilities	—		—		—

Total MTM Derivative Contract Net Assets (Liabilities)	$	0.9	$	(0.9)	$	—


	December 31, 2020
	Risk Management		Gross Amounts Offset		Net Amounts of Assets/Liabilities
	Contracts –		in the Statement of		Presented in the Statement of
Balance Sheet Location	Commodity (a)		Financial Position (b)		Financial Position (c)
	(in millions)
Current Risk Management Assets	$	0.4	$	(0.4)	$	—
Long-term Risk Management Assets	—		—		—
Total Assets	0.4		(0.4)		—

Current Risk Management Liabilities	—		—		—
Long-term Risk Management Liabilities	—		—		—
Total Liabilities	—		—		—

Total MTM Derivative Contract Net Assets (Liabilities)	$	0.4	$	(0.4)	$	—

APCo


	September 30, 2021


	Risk Management		Gross Amounts Offset		Net Amounts of Assets/Liabilities
	Contracts –		in the Statement of		Presented in the Statement
Balance Sheet Location	Commodity (a)		Financial Position (b)		of Financial Position (c)
	(in millions)
Current Risk Management Assets	$	95.7	$	(48.7)	$	47.0
Deferred Charges and Other Noncurrent Assets - Long-term Risk Management Assets	0.2		(0.2)		—
Total Assets	95.9		(48.9)		47.0

Other Current Liabilities - Current Risk Management Liabilities	60.2		(58.9)		1.3
Deferred Credits and Other Noncurrent Liabilities - Long-term Risk Management Liabilities	0.2		(0.2)		—
Total Liabilities	60.4		(59.1)		1.3

Total MTM Derivative Contract Net Assets	$	35.5	$	10.2	$	45.7


	December 31, 2020
					Gross Amounts
	Risk				of Risk		Gross Amounts		Net Amounts of Assets/
	Management		Hedging		Management		Offset in the		Liabilities Presented in
	Contracts –		Contracts –		Assets/Liabilities		Statement of		the Statement of
Balance Sheet Location	Commodity (a)		Interest Rate (a)		Recognized		Financial Position (b)		Financial Position (c)
	(in millions)
Current Risk Management Assets	$	38.8	$	2.4	$	41.2	$	(18.8)	$	22.4
Deferred Charges and Other Noncurrent Assets - Long-term Risk Management Assets	0.7		—		0.7		(0.6)		0.1
Total Assets	39.5		2.4		41.9		(19.4)		22.5

Other Current Liabilities - Current Risk Management Liabilities	19.7		3.4		23.1		(18.5)		4.6
Deferred Credits and Other Noncurrent Liabilities - Long-term Risk Management Liabilities	0.6		—		0.6		(0.5)		0.1
Total Liabilities	20.3		3.4		23.7		(19.0)		4.7

Total MTM Derivative Contract Net Assets (Liabilities)	$	19.2	$	(1.0)	$	18.2	$	(0.4)	$	17.8

I&M


	September 30, 2021
	Risk Management		Gross Amounts Offset		Net Amounts of Assets/Liabilities
	Contracts –		in the Statement of		Presented in the Statement of
Balance Sheet Location	Commodity (a)		Financial Position (b)		Financial Position (c)
	(in millions)
Current Risk Management Assets	$	37.8	$	(32.3)	$	5.5
Deferred Charges and Other Noncurrent Assets - Long-term Risk Management Assets	0.1		(0.1)		—
Total Assets	37.9		(32.4)		5.5

Current Risk Management Liabilities	51.9		(49.4)		2.5
Deferred Credits and Other Noncurrent Liabilities - Long-term Risk Management Liabilities	0.1		(0.1)		—
Total Liabilities	52.0		(49.5)		2.5

Total MTM Derivative Contract Net Assets (Liabilities)	$	(14.1)	$	17.1	$	3.0


	December 31, 2020
	Risk Management		Gross Amounts Offset		Net Amounts of Assets/Liabilities
	Contracts –		in the Statement of		Presented in the Statement of
Balance Sheet Location	Commodity (a)		Financial Position (b)		Financial Position (c)
	(in millions)
Current Risk Management Assets	$	17.2	$	(13.6)	$	3.6
Deferred Charges and Other Noncurrent Assets - Long-term Risk Management Assets	0.5		(0.4)		0.1
Total Assets	17.7		(14.0)		3.7

Current Risk Management Liabilities	12.1		(12.0)		0.1
Deferred Credits and Other Noncurrent Liabilities - Long-term Risk Management Liabilities	0.4		(0.3)		0.1
Total Liabilities	12.5		(12.3)		0.2

Total MTM Derivative Contract Net Assets (Liabilities)	$	5.2	$	(1.7)	$	3.5

OPCo


	September 30, 2021
	Risk Management		Gross Amounts Offset		Net Amounts of Assets/Liabilities
	Contracts –		in the Statement of		Presented in the Statement of
Balance Sheet Location	Commodity (a)		Financial Position (b)		Financial Position (c)
	(in millions)
Current Risk Management Assets	$	0.6	$	(0.6)	$	—
Long-term Risk Management Assets	0.1		(0.1)		—
Total Assets	0.7		(0.7)		—

Current Risk Management Liabilities	3.5		—		3.5
Long-term Risk Management Liabilities	86.9		—		86.9
Total Liabilities	90.4		—		90.4

Total MTM Derivative Contract Net Liabilities	$	(89.7)	$	(0.7)	$	(90.4)


	December 31, 2020
	Risk Management		Gross Amounts Offset		Net Amounts of Assets/Liabilities
	Contracts –		in the Statement of		Presented in the Statement of
Balance Sheet Location	Commodity (a)		Financial Position (b)		Financial Position (c)
	(in millions)
Current Risk Management Assets	$	0.3	$	(0.3)	$	—
Long-term Risk Management Assets	—		—		—
Total Assets	0.3		(0.3)		—

Current Risk Management Liabilities	8.7		—		8.7
Long-term Risk Management Liabilities	101.6		—		101.6
Total Liabilities	110.3		—		110.3

Total MTM Derivative Contract Net Liabilities	$	(110.0)	$	(0.3)	$	(110.3)

PSO


	September 30, 2021
	Risk Management		Gross Amounts Offset		Net Amounts of Assets/Liabilities
	Contracts –		in the Statement of		Presented in the Statement of
Balance Sheet Location	Commodity (a)		Financial Position (b)		Financial Position (c)
	(in millions)
Current Risk Management Assets	$	19.0	$	(0.5)	$	18.5
Long-term Risk Management Assets	—		—		—
Total Assets	19.0		(0.5)		18.5

Current Risk Management Liabilities	0.2		(0.2)		—
Long-term Risk Management Liabilities	—		—		—
Total Liabilities	0.2		(0.2)		—

Total MTM Derivative Contract Net Assets (Liabilities)	$	18.8	$	(0.3)	$	18.5


	December 31, 2020
	Risk Management		Gross Amounts Offset		Net Amounts of Assets/Liabilities
	Contracts –		in the Statement of		Presented in the Statement of
Balance Sheet Location	Commodity (a)		Financial Position (b)		Financial Position (c)
	(in millions)
Current Risk Management Assets	$	10.5	$	(0.2)	$	10.3
Long-term Risk Management Assets	—		—		—
Total Assets	10.5		(0.2)		10.3

Current Risk Management Liabilities	—		—		—
Long-term Risk Management Liabilities	—		—		—
Total Liabilities	—		—		—

Total MTM Derivative Contract Net Assets (Liabilities)	$	10.5	$	(0.2)	$	10.3

SWEPCo


	September 30, 2021
	Risk Management		Gross Amounts Offset		Net Amounts of Assets/Liabilities
	Contracts –		in the Statement of		Presented in the Statement of
Balance Sheet Location	Commodity (a)		Financial Position (b)		Financial Position (c)
	(in millions)
Current Risk Management Assets	$	18.1	$	(0.6)	$	17.5
Long-term Risk Management Assets	2.1		—		2.1
Total Assets	20.2		(0.6)		19.6

Current Risk Management Liabilities	0.2		(0.2)		—
Long-term Risk Management Liabilities	—		—		—
Total Liabilities	0.2		(0.2)		—

Total MTM Derivative Contract Net Assets (Liabilities)	$	20.0	$	(0.4)	$	19.6


	December 31, 2020
	Risk Management		Gross Amounts Offset		Net Amounts of Assets/Liabilities
	Contracts –		in the Statement of		Presented in the Statement of
Balance Sheet Location	Commodity (a)		Financial Position (b)		Financial Position (c)
	(in millions)
Current Risk Management Assets	$	3.4	$	(0.2)	$	3.2
Long-term Risk Management Assets	—		—		—
Total Assets	3.4		(0.2)		3.2

Current Risk Management Liabilities	0.7		—		0.7
Long-term Risk Management Liabilities	1.0		—		1.0
Total Liabilities	1.7		—		1.7

Total MTM Derivative Contract Net Assets (Liabilities)	$	1.7	$	(0.2)	$	1.5

(a)Derivative instruments within these categories are disclosed as gross. These instruments are subject to master netting agreements and are presented on the 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.”

(c)All derivative contracts subject to a master netting arrangement or similar agreement are offset in the statement of financial position.

Amount of Gain (Loss) Recognized on Risk Management Contracts

Amount of Gain (Loss) Recognized on

Risk Management Contracts


	Three Months Ended September 30, 2021
Location of Gain (Loss)	AEP		AEP Texas		APCo		I&M		OPCo		PSO		SWEPCo
	(in millions)
Vertically Integrated Utilities Revenues	$	(0.9)	$	—	$	—	$	—	$	—	$	—	$	—

Generation & Marketing Revenues	128.8		—		—		—		—		—		—
Electric Generation, Transmission and Distribution Revenues	—		—		(0.9)		—		—		—		—


Purchased Electricity for Resale	0.2		—		0.1		—		—		—		—
Other Operation	0.9		0.3		0.1		0.1		0.1		0.1		0.2
Maintenance	1.1		0.2		0.2		0.1		0.2		0.1		0.1
Regulatory Assets (a)	(7.2)		—		(2.9)		(16.9)		14.9		—		0.1
Regulatory Liabilities (a)	46.5		(0.1)		14.2		1.7		0.8		14.0		12.7
Total Gain (Loss) on Risk Management Contracts	$	169.4	$	0.4	$	10.8	$	(15.0)	$	16.0	$	14.2	$	13.1


	Three Months Ended September 30, 2020
Location of Gain (Loss)	AEP		AEP Texas		APCo		I&M		OPCo		PSO		SWEPCo
	(in millions)
Vertically Integrated Utilities Revenues	$	0.5	$	—	$	—	$	—	$	—	$	—	$	—

Generation & Marketing Revenues	11.5		—		—		—		—		—		—
Electric Generation, Transmission and Distribution Revenues	—		—		0.3		—		—		—		—


Purchased Electricity for Resale	0.3		—		0.2		0.1		—		—		—
Other Operation	(0.4)		(0.1)		(0.1)		(0.1)		(0.1)		(0.1)		(0.1)
Maintenance	(0.8)		(0.2)		(0.1)		(0.1)		(0.2)		—		(0.1)
Regulatory Assets (a)	7.9		0.2		0.4		0.2		4.4		(0.4)		2.9
Regulatory Liabilities (a)	17.0		—		3.8		2.6		1.7		3.1		2.0
Total Gain (Loss) on Risk Management Contracts	$	36.0	$	(0.1)	$	4.5	$	2.7	$	5.8	$	2.6	$	4.7


	Nine Months Ended September 30, 2021
Location of Gain (Loss)	AEP		AEP Texas		APCo		I&M		OPCo		PSO		SWEPCo
	(in millions)
Vertically Integrated Utilities Revenues	$	(0.6)	$	—	$	—	$	—	$	—	$	—	$	—

Generation & Marketing Revenues	144.9		—		—		—		—		—		—
Electric Generation, Transmission and Distribution Revenues	—		—		(0.6)		—		—		—		—


Purchased Electricity for Resale	1.2		—		1.0		0.1		—		—		—
Other Operation	1.9		0.6		0.2		0.2		0.3		0.2		0.3
Maintenance	2.4		0.6		0.4		0.2		0.4		0.2		0.3
Regulatory Assets (a)	(7.8)		—		(2.9)		(22.9)		20.3		—		1.4
Regulatory Liabilities (a)	123.6		0.5		28.9		1.9		5.9		40.2		38.5
Total Gain (Loss) on Risk Management Contracts	$	265.6	$	1.7	$	27.0	$	(20.5)	$	26.9	$	40.6	$	40.5


	Nine Months Ended September 30, 2020
Location of Gain (Loss)	AEP		AEP Texas		APCo		I&M		OPCo		PSO		SWEPCo
	(in millions)
Vertically Integrated Utilities Revenues	$	0.8	$	—	$	—	$	—	$	—	$	—	$	—

Generation & Marketing Revenues	11.1		—		—		—		—		—		—
Electric Generation, Transmission and Distribution Revenues	—		—		0.4		0.1		—		—		0.1


Purchased Electricity for Resale	1.2		—		1.0		0.1		—		—		—
Other Operation	(1.4)		(0.4)		(0.2)		(0.2)		(0.3)		(0.2)		(0.2)
Maintenance	(2.2)		(0.6)		(0.3)		(0.2)		(0.4)		(0.2)		(0.3)
Regulatory Assets (a)	(8.5)		(0.3)		(0.1)		(0.2)		(9.9)		(0.6)		2.2
Regulatory Liabilities (a)	80.9		—		16.2		8.8		8.4		23.9		14.8
Total Gain (Loss) on Risk Management Contracts	$	81.9	$	(1.3)	$	17.0	$	8.4	$	(2.2)	$	22.9	$	16.6

(a)Represents realized and unrealized gains and losses subject to regulatory accounting treatment recorded as either current or noncurrent on the balance sheets.

Impact of Fair Value Hedges on the Condensed Balance Sheet


	Carrying Amount of the Hedged Liabilities				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liabilities
	September 30, 2021		December 31, 2020		September 30, 2021		December 31, 2020
	(in millions)
Long-term Debt (a) (b)	$	(965.6)	$	(995.9)	$	(22.1)	$	(51.7)

(a)Amounts included on the balance sheets within Long-term Debt Due within One Year and Long-term Debt, respectively.

(b)Amounts include $(47) million and $(53) million as of September 30, 2021 and December 31, 2020, respectively, for the fair value hedge adjustment of hedged debt obligations for which hedge accounting has been discontinued.

Gain (Loss) on Hedging Instruments


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(in millions)
Gain (Loss) on Interest Rate Contracts:
Fair Value Hedging Instruments (a)	$	(0.1)	$	—	$	(23.8)	$	42.6
Fair Value Portion of Long-term Debt (a)	0.1		—		23.8		(42.6)

(a)Gain (Loss) is included in Interest Expense on the statements of income.

Impact of Cash Flow Hedges on the Condensed Balance Sheet

Impact of Cash Flow Hedges on AEP’s Balance Sheets


	September 30, 2021				December 31, 2020
	Commodity		Interest Rate		Commodity		Interest Rate
	(in millions)
AOCI Gain (Loss) Net of Tax	$	283.9	$	(26.1)	$	(60.6)	$	(47.5)
Portion Expected to be Reclassed to Net Income During the Next Twelve Months	56.5		(2.6)		(27.1)		(5.7)

Impact of Cash Flow Hedges on the Registrant Subsidiaries’ Balance Sheets


	September 30, 2021				December 31, 2020
	Interest Rate
			Expected to be				Expected to be
			Reclassified to				Reclassified to
			Net Income During				Net Income During
	AOCI Gain (Loss)		the Next		AOCI Gain (Loss)		the Next
Company	Net of Tax		Twelve Months		Net of Tax		Twelve Months
	(in millions)
AEP Texas	$	(1.5)	$	(1.1)	$	(2.3)	$	(1.1)
APCo	7.7		0.8		(0.8)		0.4
I&M	(7.0)		(1.6)		(8.3)		(1.6)

PSO	—		—		0.1		0.1
SWEPCo	0.8		(0.4)		(0.3)		(1.5)

Liabilities Subject to Cross Default Provisions


	September 30, 2021
	Liabilities for				Additional
	Contracts with Cross				Settlement
	Default Provisions				Liability if Cross
	Prior to Contractual		Amount of Cash		Default Provision
Company	Netting Arrangements		Collateral Posted		is Triggered
	(in millions)
AEP	$	128.2	$	—	$	95.8
APCo	1.0		—		—
I&M	0.6		—		—


SWEPCo	—		—		—


	December 31, 2020
	Liabilities for				Additional
	Contracts with Cross				Settlement
	Default Provisions				Liability if Cross
	Prior to Contractual		Amount of Cash		Default Provision
Company	Netting Arrangements		Collateral Posted		is Triggered
	(in millions)
AEP	$	188.4	$	—	$	169.2
APCo	4.3		—		3.5
I&M	0.5		—		0.1


SWEPCo	1.8		—		1.8