Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2022

Book Values and Fair Values of Long-term Debt

	June 30, 2022				December 31, 2021
Company	Book Value		Fair Value		Book Value		Fair Value
	(in millions)
AEP (a)(b)(c)	$	35,459.4	$	33,197.5	$	33,454.5	$	37,564.7
AEP Texas	6,128.2		5,730.5		5,180.8		5,663.8
AEPTCo	4,885.6		4,438.1		4,343.9		4,968.2
APCo	4,927.2		4,907.8		4,938.9		6,037.1
I&M	3,228.7		3,072.2		3,195.0		3,748.0
OPCo	2,969.4		2,679.0		2,968.5		3,437.5
PSO	2,413.8		2,236.2		1,913.5		2,163.7
SWEPCo	3,393.4		3,045.6		3,395.2		3,792.9

(a)The fair value amounts include debt related to AEP’s Equity Units and had a fair value of $923 million and $1.7 billion as of June 30, 2022 and December 31, 2021, respectively. See “Equity Units” section of Note 12 for additional information.

(b)The book value amounts exclude Long-term Debt of $1.1 billion and $1.1 billion as of June 30, 2022 and December 31, 2021, respectively, classified as Liabilities Held for Sale on the balance sheets. See “Disposition of KPCo and KTCo” section of Note 6 for additional information.

(c)The fair value amounts exclude Long-term Debt of $1.1 billion and $1.2 billion as of June 30, 2022 and December 31, 2021, respectively, related to KPCo. See “Disposition of KPCo and KTCo” section of Note 6 for additional information.

Other Temporary Investments

	June 30, 2022
			Gross		Gross
			Unrealized		Unrealized		Fair
Other Temporary Investments and Restricted Cash	Cost		Gains		Losses		Value
	(in millions)
Restricted Cash (a)	$	45.9	$	—	$	—	$	45.9
Other Cash Deposits	13.4		—		—		13.4
Fixed Income Securities – Mutual Funds (b)	146.6		—		(6.2)		140.4
Equity Securities – Mutual Funds	17.1		21.1		—		38.2
Total Other Temporary Investments and Restricted Cash	$	223.0	$	21.1	$	(6.2)	$	237.9

	December 31, 2021
			Gross		Gross
			Unrealized		Unrealized		Fair
Other Temporary Investments and Restricted Cash	Cost		Gains		Losses		Value
	(in millions)
Restricted Cash (a)	$	48.0	$	—	$	—	$	48.0
Other Cash Deposits	10.0		—		—		10.0
Fixed Income Securities – Mutual Funds (b)	154.3		0.5		—		154.8
Equity Securities – Mutual Funds	19.7		35.9		—		55.6
Total Other Temporary Investments and Restricted Cash	$	232.0	$	36.4	$	—	$	268.4

(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

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in millions)
Proceeds from Investment Sales	$	11.1	$	3.6	$	15.0	$	9.1
Purchases of Investments	0.8		12.4		1.6		13.1
Gross Realized Gains on Investment Sales	3.3		1.1		3.6		1.2
Gross Realized Losses on Investment Sales	0.4		—		0.5		—

Nuclear Trust Fund Investments

	June 30, 2022						December 31, 2021
			Gross		Other-Than-				Gross		Other-Than-
	Fair		Unrealized		Temporary		Fair		Unrealized		Temporary
	Value		Gains		Impairments		Value		Gains		Impairments
	(in millions)
Cash and Cash Equivalents	$	16.6	$	—	$	—	$	84.7	$	—	$	—
Fixed Income Securities:
United States Government	1,139.5		5.3		(14.7)		1,156.4		66.3		(7.9)
Corporate Debt	62.3		(4.2)		(6.0)		76.7		6.7		(2.1)
State and Local Government	7.1		0.1		(0.1)		7.3		0.4		(0.1)
Subtotal Fixed Income Securities	1,208.9		1.2		(20.8)		1,240.4		73.4		(10.1)
Equity Securities - Domestic (a)	2,055.3		1,405.0		—		2,541.9		1,901.3		—
Spent Nuclear Fuel and Decommissioning Trusts	$	3,280.8	$	1,406.2	$	(20.8)	$	3,867.0	$	1,974.7	$	(10.1)

(a)Amount reported as Gross Unrealized Gains includes unrealized gains of $1.4 billion and $1.9 billion and unrealized losses of $11 million and $4 million as of June 30, 2022 and December 31, 2021, respectively.

Securities Activity Within the Decommissioning and SNF Trusts

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in millions)
Proceeds from Investment Sales	$	736.4	$	802.7	$	1,229.9	$	1,122.7
Purchases of Investments	745.5		812.8		1,253.2		1,149.7
Gross Realized Gains on Investment Sales	10.9		83.3		16.7		88.7
Gross Realized Losses on Investment Sales	17.9		1.3		25.1		5.5

Contractual Maturities, Fair Value of Debt Securities in Nuclear Trusts

	Fair Value of Fixed
	Income Securities
	(in millions)
Within 1 year	$	356.2
After 1 year through 5 years	398.5
After 5 years through 10 years	248.0
After 10 years	206.2
Total	$	1,208.9

Fair Value, Assets and Liabilities Measured on Recurring Basis

AEP

Assets and Liabilities Measured at Fair Value on a Recurring Basis

June 30, 2022

	Level 1		Level 2		Level 3		Other		Total
Assets:	(in millions)
Other Temporary Investments and Restricted Cash
Restricted Cash	$	45.9	$	—	$	—	$	—	$	45.9
Other Cash Deposits (a)	—		—		—		13.4		13.4
Fixed Income Securities – Mutual Funds	140.4		—		—		—		140.4
Equity Securities – Mutual Funds (b)	38.2		—		—		—		38.2
Total Other Temporary Investments and Restricted Cash	224.5		—		—		13.4		237.9
Risk Management Assets
Risk Management Commodity Contracts (c) (d) (i)	26.8		1,795.9		439.4		(2,342.2)		(80.1)
Cash Flow Hedges:
Commodity Hedges (c)	—		727.8		39.3		(73.0)		694.1
Interest Rate Hedges	—		4.4		—		—		4.4
Total Risk Management Assets	26.8		2,528.1		478.7		(2,415.2)		618.4
Spent Nuclear Fuel and Decommissioning Trusts
Cash and Cash Equivalents (e)	9.0		—		—		7.6		16.6
Fixed Income Securities:
United States Government	—		1,139.5		—		—		1,139.5
Corporate Debt	—		62.3		—		—		62.3
State and Local Government	—		7.1		—		—		7.1
Subtotal Fixed Income Securities	—		1,208.9		—		—		1,208.9
Equity Securities – Domestic (b)	2,055.3		—		—		—		2,055.3
Total Spent Nuclear Fuel and Decommissioning Trusts	2,064.3		1,208.9		—		7.6		3,280.8
Other Investments (h)	20.8		11.1		—		—		31.9
Total Assets	$	2,336.4	$	3,748.1	$	478.7	$	(2,394.2)	$	4,169.0
Liabilities:
Risk Management Liabilities
Risk Management Commodity Contracts (c) (d) (j)	$	12.2	$	1,410.1	$	207.3	$	(1,255.8)	$	373.8
Cash Flow Hedges:
Commodity Hedges (c)	—		90.3		1.0		(73.0)		18.3
Interest Rate Hedges	—		0.2		—		—		0.2
Fair Value Hedges	—		99.4		—		—		99.4
Total Risk Management Liabilities	$	12.2	$	1,600.0	$	208.3	$	(1,328.8)	$	491.7

AEP

Assets and Liabilities Measured at Fair Value on a Recurring Basis

December 31, 2021

	Level 1		Level 2		Level 3		Other		Total
Assets:	(in millions)
Other Temporary Investments and Restricted Cash
Restricted Cash	$	48.0	$	—	$	—	$	—	$	48.0
Other Cash Deposits (a)	—		—		—		10.0		10.0
Fixed Income Securities – Mutual Funds	154.8		—		—		—		154.8
Equity Securities – Mutual Funds (b)	55.6		—		—		—		55.6
Total Other Temporary Investments and Restricted Cash	258.4		—		—		10.0		268.4
Risk Management Assets
Risk Management Commodity Contracts (c) (f) (i)	7.4		648.5		226.3		(642.4)		239.8
Cash Flow Hedges:
Commodity Hedges (c)	—		242.9		19.2		(41.7)		220.4
Fair Value Hedges	—		1.2		—		—		1.2
Total Risk Management Assets	7.4		892.6		245.5		(684.1)		461.4
Spent Nuclear Fuel and Decommissioning Trusts
Cash and Cash Equivalents (e)	77.7		—		—		7.0		84.7
Fixed Income Securities:
United States Government	—		1,156.4		—		—		1,156.4
Corporate Debt	—		76.7		—		—		76.7
State and Local Government	—		7.3		—		—		7.3
Subtotal Fixed Income Securities	—		1,240.4		—		—		1,240.4
Equity Securities – Domestic (b)	2,541.9		—		—		—		2,541.9
Total Spent Nuclear Fuel and Decommissioning Trusts	2,619.6		1,240.4		—		7.0		3,867.0
Other Investments (h)	28.8		14.9		—		—		43.7
Total Assets	$	2,914.2	$	2,147.9	$	245.5	$	(667.1)	$	4,640.5
Liabilities:
Risk Management Liabilities
Risk Management Commodity Contracts (c) (f) (j)	$	5.3	$	485.0	$	147.6	$	(383.2)	$	254.7
Cash Flow Hedges:
Commodity Hedges (c)	—		54.0		0.6		(41.7)		12.9
Fair Value Hedges	—		38.1		—		—		38.1
Total Risk Management Liabilities	$	5.3	$	577.1	$	148.2	$	(424.9)	$	305.7

AEP Texas

Assets and Liabilities Measured at Fair Value on a Recurring Basis

June 30, 2022

	Level 1		Level 2		Level 3		Other		Total
Assets:	(in millions)
Restricted Cash for Securitized Funding	$	27.1	$	—	$	—	$	2.6	$	29.7
Risk Management Assets
Risk Management Commodity Contracts (c)	—		1.6		—		(1.4)		0.2
Total Assets	$	27.1	$	1.6	$	—	$	1.2	$	29.9

December 31, 2021

	Level 1		Level 2		Level 3		Other		Total
Assets:	(in millions)
Restricted Cash for Securitized Funding	$	30.4	$	—	$	—	$	—	$	30.4
Risk Management Assets
Risk Management Commodity Contracts (c)	—		0.6		—		(0.6)		—
Total Assets	$	30.4	$	0.6	$	—	$	(0.6)	$	30.4

APCo

Assets and Liabilities Measured at Fair Value on a Recurring Basis

June 30, 2022

	Level 1		Level 2		Level 3		Other		Total
Assets:	(in millions)
Restricted Cash for Securitized Funding	$	16.2	$	—	$	—	$	—	$	16.2
Risk Management Assets
Risk Management Commodity Contracts (c) (g)	—		1.4		81.2		(2.9)		79.7
Total Assets	$	16.2	$	1.4	$	81.2	$	(2.9)	$	95.9
Liabilities:
Risk Management Liabilities
Risk Management Commodity Contracts (c) (g)	$	—	$	0.6	$	1.6	$	(2.2)	$	—

December 31, 2021

	Level 1		Level 2		Level 3		Other		Total
Assets:	(in millions)
Restricted Cash for Securitized Funding	$	17.6	$	—	$	—	$	—	$	17.6
Risk Management Assets
Risk Management Commodity Contracts (c) (g)	—		5.8		42.0		(5.8)		42.0
Total Assets	$	17.6	$	5.8	$	42.0	$	(5.8)	$	59.6
Liabilities:
Risk Management Liabilities
Risk Management Commodity Contracts (c) (g)	$	—	$	7.2	$	0.3	$	(6.7)	$	0.8

I&M

Assets and Liabilities Measured at Fair Value on a Recurring Basis

June 30, 2022

	Level 1		Level 2		Level 3		Other		Total
Assets:	(in millions)
Risk Management Assets
Risk Management Commodity Contracts (c) (g)	$	—	$	0.9	$	10.8	$	(1.8)	$	9.9
Spent Nuclear Fuel and Decommissioning Trusts
Cash and Cash Equivalents (e)	9.0		—		—		7.6		16.6
Fixed Income Securities:
United States Government	—		1,139.5		—		—		1,139.5
Corporate Debt	—		62.3		—		—		62.3
State and Local Government	—		7.1		—		—		7.1
Subtotal Fixed Income Securities	—		1,208.9		—		—		1,208.9
Equity Securities - Domestic (b)	2,055.3		—		—		—		2,055.3
Total Spent Nuclear Fuel and Decommissioning Trusts	2,064.3		1,208.9		—		7.6		3,280.8
Total Assets	$	2,064.3	$	1,209.8	$	10.8	$	5.8	$	3,290.7
Liabilities:
Risk Management Liabilities
Risk Management Commodity Contracts (c) (g)	$	—	$	0.3	$	1.0	$	(1.3)	$	—

December 31, 2021

	Level 1		Level 2		Level 3		Other		Total
Assets:	(in millions)
Risk Management Assets
Risk Management Commodity Contracts (c) (g)	$	—	$	3.8	$	7.6	$	(8.1)	$	3.3
Spent Nuclear Fuel and Decommissioning Trusts
Cash and Cash Equivalents (e)	77.7		—		—		7.0		84.7
Fixed Income Securities:
United States Government	—		1,156.4		—		—		1,156.4
Corporate Debt	—		76.7		—		—		76.7
State and Local Government	—		7.3		—		—		7.3
Subtotal Fixed Income Securities	—		1,240.4		—		—		1,240.4
Equity Securities - Domestic (b)	2,541.9		—		—		—		2,541.9
Total Spent Nuclear Fuel and Decommissioning Trusts	2,619.6		1,240.4		—		7.0		3,867.0
Total Assets	$	2,619.6	$	1,244.2	$	7.6	$	(1.1)	$	3,870.3
Liabilities:
Risk Management Liabilities
Risk Management Commodity Contracts (c) (g)	$	—	$	6.7	$	8.3	$	(10.0)	$	5.0

OPCo

Assets and Liabilities Measured at Fair Value on a Recurring Basis

June 30, 2022

	Level 1		Level 2		Level 3		Other		Total
Assets:	(in millions)
Risk Management Assets
Risk Management Commodity Contracts (c) (g)	$	—	$	1.1	$	—	$	0.2	$	1.3
Liabilities:
Risk Management Liabilities
Risk Management Commodity Contracts (c) (g)	$	—	$	—	$	48.4	$	1.2	$	49.6

December 31, 2021

	Level 1		Level 2		Level 3		Other		Total
Assets:	(in millions)
Risk Management Assets
Risk Management Commodity Contracts (c) (g)	$	—	$	0.5	$	—	$	(0.5)	$	—
Liabilities:
Risk Management Liabilities
Risk Management Commodity Contracts (g)	$	—	$	—	$	92.5	$	—	$	92.5

PSO

Assets and Liabilities Measured at Fair Value on a Recurring Basis

June 30, 2022

	Level 1		Level 2		Level 3		Other		Total
Assets:	(in millions)
Risk Management Assets
Risk Management Commodity Contracts (c) (g)	$	—	$	0.7	$	65.6	$	(1.7)	$	64.6
Liabilities:
Risk Management Liabilities
Risk Management Commodity Contracts (c) (g)	$	—	$	—	$	1.1	$	(1.1)	$	—

December 31, 2021

	Level 1		Level 2		Level 3		Other		Total
Assets:	(in millions)
Risk Management Assets
Risk Management Commodity Contracts (c) (g)	$	—	$	0.3	$	12.2	$	(0.4)	$	12.1
Liabilities:
Risk Management Liabilities
Risk Management Commodity Contracts (c) (g)	$	—	$	3.7	$	0.1	$	(0.1)	$	3.7

SWEPCo

Assets and Liabilities Measured at Fair Value on a Recurring Basis

June 30, 2022

	Level 1		Level 2		Level 3		Other		Total
Assets:	(in millions)
Risk Management Assets
Risk Management Commodity Contracts (c) (g)	$	—	$	0.8	$	46.3	$	(1.7)	$	45.4
Liabilities:
Risk Management Liabilities
Risk Management Commodity Contracts (c) (g)	$	—	$	—	$	0.9	$	(0.9)	$	—

December 31, 2021

	Level 1		Level 2		Level 3		Other		Total
Assets:	(in millions)
Risk Management Assets
Risk Management Commodity Contracts (c) (g)	$	—	$	0.3	$	11.0	$	(0.4)	$	10.9
Liabilities:
Risk Management Liabilities
Risk Management Commodity Contracts (c) (g)	$	—	$	2.1	$	0.1	$	(0.1)	$	2.1

(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 June 30, 2022 maturities of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), were as follows: Level 1 matures $9 million in 2022 and $6 million in periods 2023-2025; Level 2 matures $114 million in 2022, $257 million in periods 2023-2025, $11 million in periods 2026-2027 and $3 million in periods 2028-2033; Level 3 matures $125 million in 2022, $106 million in periods 2023-2025, $17 million in periods 2026-2027 and $(2) million in periods 2028-2033.  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, 2021 maturities of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), were as follows: Level 1 matures $1 million in 2022 and $1 million in periods 2023-2025; Level 2 matures $42 million in 2022, $109 million in periods 2023-2025, $10 million in periods 2026-2027 and $3 million in periods 2028-2033; Level 3 matures $82 million in 2022, $10 million in periods 2023-2025, $9 million in periods 2026-2027 and $(17) million in periods 2028-2033.  Risk management commodity contracts are substantially comprised of power contracts.

(g)Substantially comprised of power contracts for the Registrant Subsidiaries.

(h)See “Warrants Held in Investee” section of Note 9 for additional information.

(i)Amount excludes Risk Management Assets of $13.6 million and $6 million as of June 30, 2022 and December 31, 2021, respectively, classified as Assets Held for Sale on the balance sheets. See “Disposition of KPCo and KTCo” section of Note 6 for additional information.

(j)Amount excludes Risk Management Liabilities of $0 and $0.1 million as of June 30, 2022 and December 31, 2021, respectively, classified as Liabilities Held for Sale on the balance sheets. See “Disposition of KPCo and KTCo” section of Note 6 for additional information.

Changes in Fair Value of Net Trading Derivatives and Other Investments

Three Months Ended June 30, 2022	AEP		APCo		I&M		OPCo		PSO		SWEPCo
	(in millions)
Balance as of March 31, 2022	$	81.5	$	6.6	$	1.0	$	(68.5)	$	6.5	$	15.7
Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (a) (b)	38.6		5.7		(0.3)		0.9		11.9		19.9
Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (a)	(16.8)		—		—		—		—		—
Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income (c)	5.7		—		—		—		—		—
Settlements	(69.3)		(12.4)		(0.7)		—		(18.4)		(27.9)
Transfers into Level 3 (d) (e)	2.4		—		—		—		—		—
Transfers out of Level 3 (e)	5.8		—		—		—		—		—
Changes in Fair Value Allocated to Regulated Jurisdictions (f)	234.7		79.7		9.8		19.2		64.5		37.7
Assets and Liabilities Held for Sale related to KPCo (g)	(12.2)		—		—		—		—		—
Balance as of June 30, 2022	$	270.4	$	79.6	$	9.8	$	(48.4)	$	64.5	$	45.4
Three Months Ended June 30, 2021	AEP		APCo		I&M		OPCo		PSO		SWEPCo
	(in millions)
Balance as of March 31, 2021	$	41.8	$	6.6	$	0.7	$	(104.0)	$	5.5	$	0.5
Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (a) (b)	18.6		6.2		0.4		1.7		4.8		3.1
Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (a)	(10.6)		—		—		—		—		—
Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income (c)	15.4		—		—		—		—		—
Settlements	(34.5)		(13.0)		(1.2)		0.6		(10.3)		(4.5)
Transfers into Level 3 (d) (e)	(0.8)		—		—		—		—		—
Transfers out of Level 3 (e)	(19.1)		—		—		—		—		—
Changes in Fair Value Allocated to Regulated Jurisdictions (f)	90.4		36.8		7.4		(3.7)		22.9		15.5
Balance as of June 30, 2021	$	101.2	$	36.6	$	7.3	$	(105.4)	$	22.9	$	14.6

Six Months Ended June 30, 2022	AEP		APCo		I&M		OPCo		PSO		SWEPCo
	(in millions)
Balance as of December 31, 2021	$	97.3	$	41.7	$	(0.7)	$	(92.5)	$	12.1	$	10.9
Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (a) (b)	68.1		3.0		3.7		2.4		24.2		32.5
Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (a)	(35.7)		—		—		—		—		—
Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income (c)	22.5		—		—		—		—		—
Settlements	(149.0)		(44.7)		(3.0)		1.4		(36.3)		(41.0)
Transfers into Level 3 (d) (e)	4.4		—		—		—		—		—
Transfers out of Level 3 (e)	9.6		—		—		—		—		—
Changes in Fair Value Allocated to Regulated Jurisdictions (f)	260.9		79.6		9.8		40.3		64.5		43.0
Assets and Liabilities Held for Sale related to KPCo (g)	(7.7)		—		—		—		—		—
Balance as of June 30, 2022	$	270.4	$	79.6	$	9.8	$	(48.4)	$	64.5	$	45.4
Six Months Ended June 30, 2021	AEP		APCo		I&M		OPCo		PSO		SWEPCo
	(in millions)
Balance as of December 31, 2020	$	113.3	$	19.3	$	2.1	$	(110.3)	$	10.3	$	1.6
Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (a) (b)	78.3		38.9		0.4		0.1		16.1		9.5
Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (a)	(66.8)		—		—		—		—		—
Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income (c)	18.5		—		—		—		—		—
Settlements	(110.6)		(58.4)		(2.6)		4.9		(26.4)		(12.0)
Transfers into Level 3 (d) (e)	(0.2)		—		—		—		—		—
Transfers out of Level 3 (e)	(25.6)		—		—		—		—		—
Changes in Fair Value Allocated to Regulated Jurisdictions (f)	94.3		36.8		7.4		(0.1)		22.9		15.5
Balance as of June 30, 2021	$	101.2	$	36.6	$	7.3	$	(105.4)	$	22.9	$	14.6

(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 changes in fair value are recorded as regulatory liabilities for net gains and as regulatory assets for net losses or accounts payable.

(g)Amount represents Risk Management Assets classified as Assets Held for Sale on the balance sheets. See “Disposition of KPCo and KTCo” section of Note 6 for additional information.

Significant Unobservable Inputs for Level 3

AEP

Significant Unobservable Inputs

June 30, 2022

						Significant	Input/Range
	Fair Value				Valuation	Unobservable					Weighted
	Assets		Liabilities		Technique	Input	Low		High		Average (c)
	(in millions)
Energy Contracts	$	255.9	$	196.2	Discounted Cash Flow	Forward Market Price (a)	$	2.10	$	156.49	$	46.67
Natural Gas Contracts	8.2		—		Discounted Cash Flow	Forward Market Price (b)	2.95		6.06		5.07
FTRs (d) (e)	214.6		12.1		Discounted Cash Flow	Forward Market Price (a)	(42.04)		28.45		0.05
Total	$	478.7	$	208.3

December 31, 2021

						Significant	Input/Range
	Fair Value				Valuation	Unobservable					Weighted
	Assets		Liabilities		Technique	Input	Low		High		Average (c)
	(in millions)
Energy Contracts (f)	$	164.4	$	135.2	Discounted Cash Flow	Forward Market Price (a)	$	10.30	$	76.70	$	37.11
Natural Gas Contracts	3.6		—		Discounted Cash Flow	Forward Market Price (b)	3.11		4.02		3.47
FTRs (g) (h)	77.5		13.0		Discounted Cash Flow	Forward Market Price (a)	(23.93)		26.38		0.86
Total	$	245.5	$	148.2

APCo

Significant Unobservable Inputs

June 30, 2022

Significant

Input/Range

Fair Value

Valuation

Unobservable

Weighted

Assets

Liabilities

Technique

Input (a)

Low

High

Average (c)

(in millions)

FTRs

$

81.2

$

1.6

Discounted Cash Flow

Forward Market Price

$

(3.41)

$

20.58

$

2.04

December 31, 2021

						Significant	Input/Range
	Fair Value				Valuation	Unobservable					Weighted
	Assets		Liabilities		Technique	Input (a)	Low		High		Average (c)
	(in millions)
Energy Contracts	$	—	$	0.3	Discounted Cash Flow	Forward Market Price	$	32.20	$	56.54	$	44.77
FTRs	42.0		—		Discounted Cash Flow	Forward Market Price	(0.30)		26.38		2.63
Total	$	42.0	$	0.3

I&M

Significant Unobservable Inputs

June 30, 2022

Significant

Input/Range

Fair Value

Valuation

Unobservable

Weighted

Assets

Liabilities

Technique

Input (a)

Low

High

Average (c)

(in millions)

FTRs

$

10.8

$

1.0

Discounted Cash Flow

Forward Market Price

$

0.13

$

17.15

$

1.20

December 31, 2021

						Significant	Input/Range
	Fair Value				Valuation	Unobservable					Weighted
	Assets		Liabilities		Technique	Input (a)	Low		High		Average (c)
	(in millions)
Energy Contracts	$	—	$	0.2	Discounted Cash Flow	Forward Market Price	$	32.20	$	56.54	$	44.77
FTRs	7.6		8.1		Discounted Cash Flow	Forward Market Price	(5.45)		17.78		(0.12)
Total	$	7.6	$	8.3

OPCo

Significant Unobservable Inputs

June 30, 2022

Significant

Input/Range

Fair Value

Valuation

Unobservable

Weighted

Assets

Liabilities

Technique

Input (a)

Low

High

Average (c)

(in millions)

Energy Contracts

$

—

$

48.4

Discounted Cash Flow

Forward Market Price

$

2.10

$

156.49

$

45.89

December 31, 2021

Significant

Input/Range

Fair Value

Valuation

Unobservable

Weighted

Assets

Liabilities

Technique

Input (a)

Low

High

Average (c)

(in millions)

Energy Contracts

$

—

$

92.5

Discounted Cash Flow

Forward Market Price

$

14.26

$

52.98

$

30.68

PSO

Significant Unobservable Inputs

June 30, 2022

Significant

Input/Range

Fair Value

Valuation

Unobservable

Weighted

Assets

Liabilities

Technique

Input (a)

Low

High

Average (c)

(in millions)

FTRs

$

65.6

$

1.1

Discounted Cash Flow

Forward Market Price

$

(34.40)

$

15.50

$

(7.48)

December 31, 2021

Significant

Input/Range

Fair Value

Valuation

Unobservable

Weighted

Assets

Liabilities

Technique

Input (a)

Low

High

Average (c)

(in millions)

FTRs

$

12.2

$

0.1

Discounted Cash Flow

Forward Market Price

$

(18.39)

$

1.87

$

(2.57)

SWEPCo

Significant Unobservable Inputs

June 30, 2022

						Significant	Input/Range
	Fair Value				Valuation	Unobservable					Weighted
	Assets		Liabilities		Technique	Input	Low		High		Average (c)
	(in millions)
Natural Gas Contracts	$	8.2	$	—	Discounted Cash Flow	Forward Market Price (b)	$	4.95	$	6.06	$	5.56
FTRs	38.1		0.9		Discounted Cash Flow	Forward Market Price (a)	(34.40)		15.50		(7.48)
Total	$	46.3	$	0.9

December 31, 2021

						Significant	Input/Range
	Fair Value				Valuation	Unobservable					Weighted
	Assets		Liabilities		Technique	Input	Low		High		Average (c)
	(in millions)
Natural Gas Contracts	$	3.6	$	—	Discounted Cash Flow	Forward Market Price (b)	$	3.11	$	4.02	$	3.47
FTRs	7.4		0.1		Discounted Cash Flow	Forward Market Price (a)	(18.39)		1.87		(2.57)
Total	$	11.0	$	0.1

(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.

(d)Amount excludes Risk Management Assets of $13.7 million classified as Assets Held for Sale on the balance sheets. See “Disposition of KPCo and KTCo” section of Note 6 for additional information.

(e)Amount excludes Risk Management Liabilities of $0.2 million classified as Liabilities Held for Sale on the balance sheets. See “Disposition of KPCo and KTCo” section of Note 6 for additional information.

(f)Amount excludes Risk Management Liabilities of $0.1 million classified as Liabilities Held for Sale on the balance sheets. See “Disposition of KPCo and KTCo” section of Note 6 for additional information.

(g)Amount excludes Risk Management Assets of $6 million classified as Assets Held for Sale on the balance sheets. See “Disposition of KPCo and KTCo” section of Note 6 for additional information.

(h)Amount excludes Risk Management Liabilities of $0.5 million classified as Liabilities Held for Sale on the balance sheets. See “Disposition of KPCo and KTCo” section of Note 6 for additional information.

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)