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Fair Value Measurements (Tables)
 6 Months Ended
Jun. 30, 2017
Fair Value Disclosures [Abstract]  
Quantitative Information About Level 3 Fair Value Measurements

The following table presents Questar Gas' quantitative information about Level 3 fair value measurements at June 30, 2017.  The range and weighted average are presented in dollars for market price inputs and percentages for price volatility.

 

 

 

Fair Value

(millions)

 

 

Valuation Techniques

 

Unobservable Input

 

 

 

Range

 

Weighted

Average(1)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Physical options:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Natural gas

 

$

0.3

 

 

Option model

 

Market price (per Dth)

 

(2

)

3.2 - 3.4

 

 

3.3

 

 

 

 

 

 

 

 

 

Price volatility

 

(3

)

25.1% - 31.7%

 

 

27.7

%

Total assets

 

$

0.3

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Physical forwards:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Natural gas(4)

 

$

0.5

 

 

Discounted cash flow

 

Market price (per Dth)

 

(2

)

2.3 - 3.4

 

 

2.9

 

Total liabilities

 

$

0.5

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Averages weighted by volume.

(2)

Represents market prices beyond defined terms for Level 1 and 2.

(3)

Represents volatilities unrepresented in published markets.

(4)

Includes basis.

 
Sensitivity of Fair Value Measurements to Changes in 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)

Price volatility

 

Buy

 

Increase (decrease)

 

Gain (loss)

Price volatility

 

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.

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At June 30, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

$

—

 

 

$

—

 

 

$

0.3

 

 

$

0.3

 

Total assets

 

$

—

 

 

$

—

 

 

$

0.3

 

 

$

0.3

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

$

—

 

 

$

0.1

 

 

$

0.5

 

 

$

0.6

 

Total liabilities

 

$

—

 

 

$

0.1

 

 

$

0.5

 

 

$

0.6

 

At December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

$

—

 

 

$

0.1

 

 

$

—

 

 

$

0.1

 

Total assets

 

$

—

 

 

$

0.1

 

 

$

—

 

 

$

0.1

 

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.

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

(1.3

)

 

$

—

 

 

$

—

 

 

$

—

 

Total realized and unrealized gains (losses):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Included in earnings(1)

 

 

—

 

 

 

—

 

 

 

(0.1

)

 

 

—

 

Included in regulatory assets/liabilities

 

 

1.0

 

 

 

—

 

 

 

(0.3

)

 

 

—

 

Settlements

 

 

—

 

 

 

—

 

 

 

0.1

 

 

 

—

 

Purchases

 

 

0.1

 

 

 

—

 

 

 

0.1

 

 

 

—

 

Ending balance

 

$

(0.2

)

 

$

—

 

 

$

(0.2

)

 

$

—

 

(1)

The gains and losses included in earnings were classified in cost of sales.
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:

 

 

June 30, 2017

 

 

December 31, 2016

 

 

 

Carrying

Amount

 

 

Estimated Fair

Value(1)

 

 

Carrying

Amount

 

 

Estimated Fair

Value(1)

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt, including securities due within one year(2)

 

$

631.0

 

 

$

687.1

 

 

$

630.8

 

 

$

672.6

 

(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)

Carrying amount includes amounts which represent the unamortized debt issuance costs, discount or premium.