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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2016

Fair Value, Option, Quantitative Disclosures

The following table presents Questar Gas' quantitative information about Level 3 fair value measurements at September 30, 2016. The range and weighted average are presented in dollars for market price inputs.



	Fair Value (millions)		Valuation Techniques	Unobservable Input	Range	Weighted Average⁽¹⁾
Assets
Physical and financial forwards and futures:
Natural gas	$	1.6	Discounted cash flow	Market price (per Dth)⁽²⁾	2.6 - 3.6	3.1
Total assets	$	1.6

⁽¹⁾ Averages weighted by volume.

⁽²⁾ Represents market prices beyond defined terms for Levels 1 and 2.

Significant Unobservable Inputs

Sensitivity of the fair value measurements to changes in the significant unobservable inputs is as follows:



Significant Unobservable Inputs	Position	Change to Input	Impact on Fair Value Measurement
Market price	Buy	Increase (decrease)	Gain (loss)
Market price	Sell	Increase (decrease)	Loss (gain)

Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents Questar Gas’ assets and liabilities that are measured at fair value on a recurring basis for each hierarchy level, including both current and noncurrent portions. Questar Gas did not have any such items at December 31, 2015.



	September 30, 2016
	Level 1		Level 2		Level 3		Total
	(millions)
Assets
Derivatives:
Commodity	$	—	$	—	$	1.6	$	1.6
Total assets	$	—	$	—	$	1.6	$	1.6
Liabilities
Derivatives:
Commodity	$	—	$	0.1	$	—	$	0.1
Total liabilities	$	—	$	0.1	$	—	$	0.1

Fair Value Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation

The following table presents the net change in Questar Gas' assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value category:



	3 Months Ended September 30,				9 Months Ended September 30,
	2016		2015		2016		2015
	(millions)
Beginning balance	$	—	$	—	$	—	$	—
Total realized and unrealized gains (losses):
Included in regulatory assets/liabilities	1.6		—		1.6		—
Ending balance	$	1.6	$	—	$	1.6	$	—

Schedule Carrying Amounts and Estimated Fair Value of Financial Instruments not Recorded at Fair Value

For Questar Gas' financial instruments that are not recorded at fair value, the carrying amounts and estimated fair values are as follows:



	September 30, 2016				December 31, 2015
	Carrying Amount		Estimated Fair Value⁽¹⁾		Carrying Amount		Estimated Fair Value⁽²⁾
	(millions)
Long-term debt⁽³⁾	$	531.4	$	607.2	$	531.2	$	568.4

⁽¹⁾ Fair value is estimated using market prices, where available, and interest rates currently available for issuance of debt with similar terms

and remaining maturities. The fair value measurements are classified as Level 2.

⁽²⁾ Fair value is estimated using the discounted present value of cash flows using Questar Gas’ current credit risk-adjusted borrowing rates.

The fair value measurements are classified as Level 2.

⁽³⁾ Carrying amount includes amounts which represent the unamortized debt issuance costs, discount and/or premium.

- Definition

Tabular disclosure of the application of the fair value option for measurement and reporting of eligible financial assets and liabilities (as defined), as well as certain other eligible items (as defined) included in the statement of financial position, whether such option is elected for a single eligible item or a group of similar eligible items and is in addition to other disclosures concerning fair value which the company may be required to provide. Such disclosure might be expected to include: (1) for items included in the statement of financial position: (a) the reasons for electing a fair value option for each eligible item or group of similar eligible items and (b) if the fair value option is elected for some but not all eligible items within a group of similar eligible items: (i) a description of those similar items and the reasons for partial election and (ii) information of how the group of similar items relates to individual balance sheet line items; (c) for each line item in the statement of financial position that includes an item or items for which the fair value option has been elected, information of how each line item in the statement of financial position relates to major categories of assets and liabilities presented in accordance with other fair value disclosures; (2) for items included in the income statement: (a) a description of how interest and dividends are measured and where they are reported in the income statement; (b) how the gains or losses attributable to changes in instrument-specific credit risk were determined; (c) for liabilities with fair values that have been significantly affected during the reporting period by changes in the instrument-specific credit risk: (i) qualitative information about the reasons for the changes and (ii) how the gains and losses attributable to changes in instrument-specific credit risk were determined; and (3) certain other disclosures as required or determined to be provided.

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