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Fair Value Measurements (Tables)
12 Months Ended
Dec. 31, 2017
Fair Value Disclosures [Abstract]  
Fair value of assets and liabilities that are measured at fair value on a recurring basis
The following table presents the fair value at December 31, 2017 of our assets and liabilities that are measured at fair value on a recurring basis (dollars in thousands):

 
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs (a)
(Level 3)
 
Other
 
 
 
Balance at December 31, 2017
Assets
 

 
 

 
 

 
 

 
 
 
 

Cash equivalents
$
10,630

 
$

 
$

 
$

 
 
 
$
10,630

Risk management activities — derivative instruments:
 

 
 

 
 

 
 

 
 
 
 

Commodity contracts

 
5,683

 
1,036

 
(4,737
)
 
(b)
 
1,982

Coal reclamation escrow account (c):
455

 
31,562

 

 
525

 
 
 
32,542

Nuclear decommissioning trust:
 

 
 

 
 

 
 
 
 
 
 

Cash and cash equivalents
7,224

 

 

 
109

 
(d)
 
7,333

U.S. commingled equity funds

 

 

 
417,390

 
(e)
 
417,390

Fixed income securities:
 

 
 

 
 

 
 
 
 
 
 

U.S. Treasury
127,662

 

 

 

 
 
 
127,662

Corporate debt

 
114,007

 

 

 
 
 
114,007

Mortgage-backed securities

 
111,874

 

 

 
 
 
111,874

Municipal bonds

 
79,049

 

 

 
 
 
79,049

Other

 
13,685

 

 

 
 
 
13,685

Subtotal nuclear decommissioning trust
134,886

 
318,615

 

 
417,499

 

 
871,000

Total Assets
$
145,971

 
$
355,860

 
$
1,036

 
$
413,287

 

 
$
916,154

Liabilities
 

 
 

 
 

 
 

 
 
 
 

Risk management activities — derivative instruments:
 

 
 

 
 

 
 

 
 
 
 

Commodity contracts
$

 
$
(78,646
)
 
$
(19,292
)
 
$
1,516

 
(b)
 
$
(96,422
)
(a)
Primarily consists of long-dated electricity contracts.
(b)
Represents counterparty netting, margin, and collateral. See Note 16.
(c)
Represents investments restricted for coal mine reclamation funding related to Four Corners. These assets are included in the Other Assets line item, reported under the Investments and Other Assets section of our Consolidated Balance Sheets. Primarily consists of fixed income municipal bonds.
(d)
Represents nuclear decommissioning trust net pending securities sales and purchases.
(e)
Valued using NAV as a practical expedient and, therefore, are not classified in the fair value hierarchy.


 
The following table presents the fair value at December 31, 2016 of our assets and liabilities that are measured at fair value on a recurring basis (dollars in thousands):
 
 
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs (a)
(Level 3)
 
Other
 
 
 
Balance at December 31, 2016
Assets
 

 
 

 
 

 
 

 
 
 
 

Coal reclamation trust (b):

$
14,521

 
$

 
$

 
$

 
 
 
$
14,521

Risk management activities — derivative instruments:
 

 
 

 
 

 
 

 
 
 
 

Commodity contracts

 
43,722

 
11,076

 
(35,103
)
 
(c)
 
19,695

Nuclear decommissioning trust:
 

 
 

 
 

 
 

 
 
 
 

U.S. commingled equity funds

 

 

 
353,261

 
(d)
 
353,261

Fixed income securities:
 

 
 

 
 

 
 

 
 
 
 

Cash and cash equivalent funds

 

 

 
795

 
(e)
 
795

U.S. Treasury
95,441

 

 

 

 
 
 
95,441

Corporate debt

 
111,623

 

 

 
 
 
111,623

Mortgage-backed securities

 
115,337

 

 

 
 
 
115,337

Municipal bonds

 
80,997

 

 

 
 
 
80,997

Other

 
22,132

 

 

 
 
 
22,132

Subtotal nuclear decommissioning trust
95,441

 
330,089

 

 
354,056

 

 
779,586

Total
$
109,962

 
$
373,811

 
$
11,076

 
$
318,953

 

 
$
813,802

Liabilities
 

 
 

 
 

 
 

 
 
 
 

Risk management activities — derivative instruments:
 

 
 

 
 

 
 

 
 
 
 

Commodity contracts
$

 
$
(45,641
)
 
$
(58,482
)
 
$
31,049

 
(c)
 
$
(73,074
)
(a)
Primarily consists of long-dated electricity contracts.
(b)
Represents investments restricted for coal mine reclamation funding related to Four Corners. These assets are included in the Other Assets line item, reported under the Investments and Other Assets section of our Consolidated Balance Sheets. Primarily consists of cash equivalents. Presented as Coal reclamation escrow in 2017.
(c)
Represents counterparty netting, margin and collateral. See Note 16.
(d)
Valued using NAV as a practical expedient and, therefore, are not classified in the fair value hierarchy.
(e)
Represents nuclear decommissioning trust net pending securities sales and purchases.
Information regarding the entity's internally developed significant unobservable inputs used to value its level 3 instruments
The following tables provide information regarding our significant unobservable inputs used to value our risk management derivative Level 3 instruments at December 31, 2017 and December 31, 2016:
 
 
December 31, 2017
Fair Value (thousands)
 
Valuation Technique
 
Significant Unobservable Input
 
Range
 
Weighted-Average
Commodity Contracts
Assets
 
Liabilities
 
Electricity:
 

 
 

 
 
 
 
 
 
 
 

Forward Contracts (a)
$
21

 
$
15,485

 
Discounted cash flows
 
Electricity forward price (per MWh)
 
$18.51 - $38.75
 
$
27.89

Natural Gas:
 

 
 

 
 
 
 
 
 
 
 

Forward Contracts (a)
1,015

 
3,807

 
Discounted cash flows
 
Natural gas forward price (per MMBtu)
 
$2.33 - $3.11
 
$
2.71

Total
$
1,036

 
$
19,292

 
 
 
 
 
 
 
 

(a)
Includes swaps and physical and financial contracts.
 
 
December 31, 2016
Fair Value (thousands)
 
Valuation Technique
 
Significant Unobservable Input
 
Range
 
Weighted-Average
Commodity Contracts
Assets
 
Liabilities
 
Electricity:
 

 
 

 
 
 
 
 
 
 
 

Forward Contracts (a)
$
10,648

 
$
32,042

 
Discounted cash flows
 
Electricity forward price (per MWh)
 
$16.43 - $41.07
 
$
29.86

Natural Gas:
 

 
 

 
 
 
 
 
 
 
 

Forward Contracts (a)
428

 
26,440

 
Discounted cash flows
 
Natural gas forward price (per MMBtu)
 
$2.32 - $3.60
 
$
2.81

Total
$
11,076

 
$
58,482

 
 
 
 
 
 
 
 

(a)
Includes swaps and physical and financial contracts.
Changes in fair value for assets and liabilities that are measured at fair value on a recurring basis using Level 3 inputs
The following table shows the changes in fair value for our risk management activities' assets and liabilities that are measured at fair value on a recurring basis using Level 3 inputs for the years ended December 31, 2017 and 2016 (dollars in thousands):
 
 
 
Year Ended
December 31,
Commodity Contracts
 
2017
 
2016
Net derivative balance at beginning of period
 
$
(47,406
)
 
$
(32,979
)
Total net gains (losses) realized/unrealized:
 
 

 
 

Included in earnings
 

 

Included in OCI
 
3

 
88

Deferred as a regulatory asset or liability
 
(13,643
)
 
(37,543
)
Settlements
 
5,834

 
15,146

Transfers into Level 3 from Level 2
 
(10,026
)
 
1,900

Transfers from Level 3 into Level 2
 
46,982

 
5,982

Net derivative balance at end of period
 
$
(18,256
)
 
$
(47,406
)
Net unrealized gains included in earnings related to instruments still held at end of period
 
$

 
$