Derivative Accounting (Tables)

9 Months Ended

Sep. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Outstanding gross notional amount of derivatives, which represents both purchases and sales (does not reflect net position)

As of September 30, 2020 and December 31, 2019, we had the following outstanding gross notional volume of derivatives, which represent both purchases and sales (does not reflect net position): 

		Quantity
Commodity	Unit of Measure	September 30, 2020	December 31, 2019
Power	GWh	142	193
Gas	Billion cubic feet	213	257

Gains and losses from derivative instruments in designated cash flow accounting hedges relationships

The following table provides information about APS's gains and losses from derivative instruments in designated cash flow accounting hedging relationships (dollars in thousands):

	Financial Statement Location	Three Months Ended September 30,				Nine Months Ended September 30,
Commodity Contracts		2020		2019		2020		2019
Loss Reclassified from Accumulated OCI into Income (Effective Portion Realized) (a)	Fuel and purchased power (b)	$	—	$	(289)	$	(763)	$	(1,263)

(a)During the three and nine months ended September 30, 2020 and 2019, we had no gains or losses reclassified from accumulated OCI to earnings related to discontinued cash flow hedges.

(b)Amounts are before the effect of PSA deferrals.

Gains and losses from derivative instruments not designated as accounting hedges instruments

The following table provides information about gains and losses from derivative instruments not designated as accounting hedging instruments (dollars in thousands):

	Financial Statement Location	Three Months Ended September 30,				Nine Months Ended September 30,
Commodity Contracts		2020		2019		2020		2019
Net Gain (Loss) Recognized in Income	Fuel and purchased power (a)	$	49,611	$	(28,249)	$	14,639	$	(69,765)

(a)Amounts are before the effect of PSA deferrals.

Schedule of offsetting assets

The following tables provide information about the fair value of our risk management activities reported on a gross basis and the impacts of offsetting.  These amounts relate to commodity contracts and are located in the assets and liabilities from risk management activities and other assets lines of our Condensed Consolidated Balance Sheets.

As of September 30, 2020: (dollars in thousands)	Gross  Recognized  Derivatives  (a)		Amounts Offset  (b)		Net  Recognized  Derivatives		Other  (c)		Amount Reported on Balance Sheets
Current assets	$	15,505	$	(1,630)	$	13,875	$	—	$	13,875
Investments and other assets	5,008		(1,579)		3,429		—		3,429
Total assets	20,513		(3,209)		17,304		—		17,304
Current liabilities	(4,611)		1,630		(2,981)		(1,285)		(4,266)
Deferred credits and other	(10,671)		1,579		(9,092)		—		(9,092)
Total liabilities	(15,282)		3,209		(12,073)		(1,285)		(13,358)
Total	$	5,231	$	—	$	5,231	$	(1,285)	$	3,946

(a)All of our gross recognized derivative instruments were subject to master netting arrangements.

(b)No cash collateral has been provided to counterparties, or received from counterparties, that is subject to offsetting.

(c)Represents cash collateral that is not subject to offsetting. Amounts relate to non-derivative instruments, derivatives qualifying for scope exceptions or collateral posted in excess of the recognized derivative instrument. Includes cash collateral received from counterparties of $1,285.

As of December 31, 2019: (dollars in thousands)	Gross Recognized Derivatives  (a)		Amounts Offset (b)		Net  Recognized  Derivatives		Other  (c)		Amount Reported on Balance Sheets
Current assets	$	584	$	(474)	$	110	$	405	$	515
Current liabilities	(38,235)		474		(37,761)		(1,185)		(38,946)
Deferred credits and other	(33,186)		—		(33,186)		—		(33,186)
Total liabilities	(71,421)		474		(70,947)		(1,185)		(72,132)
Total	$	(70,837)	$	—	$	(70,837)	$	(780)	$	(71,617)

(a)All of our gross recognized derivative instruments were subject to master netting arrangements.

(b)No cash collateral has been provided to counterparties, or received from counterparties, that is subject to offsetting.

(c)Represents cash collateral and cash margin that is not subject to offsetting. Amounts relate to non-derivative instruments, derivatives qualifying for scope exceptions, or collateral and margin posted in excess of the recognized derivative instrument.  Includes cash collateral received from counterparties of $1,185 and cash margin provided to counterparties of $405.

Schedule of offsetting liabilities

The following tables provide information about the fair value of our risk management activities reported on a gross basis and the impacts of offsetting.  These amounts relate to commodity contracts and are located in the assets and liabilities from risk management activities and other assets lines of our Condensed Consolidated Balance Sheets.

As of September 30, 2020: (dollars in thousands)	Gross  Recognized  Derivatives  (a)		Amounts Offset  (b)		Net  Recognized  Derivatives		Other  (c)		Amount Reported on Balance Sheets
Current assets	$	15,505	$	(1,630)	$	13,875	$	—	$	13,875
Investments and other assets	5,008		(1,579)		3,429		—		3,429
Total assets	20,513		(3,209)		17,304		—		17,304
Current liabilities	(4,611)		1,630		(2,981)		(1,285)		(4,266)
Deferred credits and other	(10,671)		1,579		(9,092)		—		(9,092)
Total liabilities	(15,282)		3,209		(12,073)		(1,285)		(13,358)
Total	$	5,231	$	—	$	5,231	$	(1,285)	$	3,946

(a)All of our gross recognized derivative instruments were subject to master netting arrangements.

(b)No cash collateral has been provided to counterparties, or received from counterparties, that is subject to offsetting.

(c)Represents cash collateral that is not subject to offsetting. Amounts relate to non-derivative instruments, derivatives qualifying for scope exceptions or collateral posted in excess of the recognized derivative instrument. Includes cash collateral received from counterparties of $1,285.

As of December 31, 2019: (dollars in thousands)	Gross Recognized Derivatives  (a)		Amounts Offset (b)		Net  Recognized  Derivatives		Other  (c)		Amount Reported on Balance Sheets
Current assets	$	584	$	(474)	$	110	$	405	$	515
Current liabilities	(38,235)		474		(37,761)		(1,185)		(38,946)
Deferred credits and other	(33,186)		—		(33,186)		—		(33,186)
Total liabilities	(71,421)		474		(70,947)		(1,185)		(72,132)
Total	$	(70,837)	$	—	$	(70,837)	$	(780)	$	(71,617)

(a)All of our gross recognized derivative instruments were subject to master netting arrangements.

(b)No cash collateral has been provided to counterparties, or received from counterparties, that is subject to offsetting.

(c)Represents cash collateral and cash margin that is not subject to offsetting. Amounts relate to non-derivative instruments, derivatives qualifying for scope exceptions, or collateral and margin posted in excess of the recognized derivative instrument.  Includes cash collateral received from counterparties of $1,185 and cash margin provided to counterparties of $405.

Information about derivative instruments that have credit-risk-related contingent features

The following table provides information about our derivative instruments that have credit-risk-related contingent features (dollars in thousands):

	September 30, 2020
Aggregate fair value of derivative instruments in a net liability position	$	15,282
Cash collateral posted	—
Additional cash collateral in the event credit-risk-related contingent features were fully triggered (a)	5,054

(a)This amount is after counterparty netting and includes those contracts which qualify for scope exceptions, which are excluded from the derivative details above.