Derivative Instruments

12 Months Ended

Dec. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative assets and liabilities not shown separately on our balance sheets are included in the other current and other long-term line items. The following table shows our derivative assets and derivative liabilities. None of the derivatives shown below were designated as hedging instruments.


	December 31, 2022				December 31, 2021
(in millions)	Derivative Assets		Derivative Liabilities		Derivative Assets		Derivative Liabilities
Current
Natural gas contracts	$	32.5	$	88.2	$	60.6	$	14.0
FTRs	7.8		—		2.4		—
Coal contracts	18.9		—		44.0		—
Total current	59.2		88.2		107.0		14.0

Long-term
Natural gas contracts	—		8.4		4.0		1.1
Coal contracts	15.6		—		9.0		—
Total long-term	15.6		8.4		13.0		1.1
Total	$	74.8	$	96.6	$	120.0	$	15.1

Realized gains and losses on derivatives used in our regulatory utility operations are recorded in cost of sales upon settlement; however, they may be subsequently deferred for future rate recovery or refund as the gains and losses are included in our utilities’ fuel and natural gas cost recovery mechanisms. Realized gains and losses on FTRs and TCRs used in our non-utility operations are recorded in operating revenues on the income statements. Our estimated notional sales volumes and realized gains and losses were as follows for the years ended:


	December 31, 2022			December 31, 2021			December 31, 2020
(in millions)	Volumes	Gains		Volumes	Gains		Volumes	Gains (Losses)
Natural gas contracts	183.3 Dth	$	299.5	197.6 Dth	$	136.5	188.6 Dth	$	(54.1)

FTRs and TCRs	27.2 MWh	11.8		28.2 MWh	17.7		29.8 MWh	4.1
Total		$	311.3		$	154.2		$	(50.0)

At December 31, 2022 and 2021, we had posted cash collateral of $122.4 million and $13.9 million, respectively. We had also received cash collateral of $13.2 million at December 31, 2021.

The following table shows derivative assets and derivative liabilities if derivative instruments by counterparty were presented net on our balance sheets:


	December 31, 2022					December 31, 2021
(in millions)	Derivative Assets		Derivative Liabilities			Derivative Assets			Derivative Liabilities
Gross amount recognized on the balance sheet	$	74.8	$	96.6		$	120.0		$	15.1
Gross amount not offset on the balance sheet	(17.5)		(82.5)		(1)	(15.2)		(2)	(9.2)		(3)
Net amount	$	57.3	$	14.1		$	104.8		$	5.9

(1) Includes cash collateral posted of $65.0 million.

(2) Includes cash collateral received of $6.4 million.

(3) Includes cash collateral posted of $0.4 million.

Cash Flow Hedges

Until their expiration on November 15, 2021, we had two interest rate swaps with a combined notional value of $250.0 million to hedge the variable interest rate risk associated with our 2007 Junior Notes. The swaps provided a fixed interest rate of 4.9765% on $250.0 million of the $500.0 million of outstanding 2007 Junior Notes. As these swaps qualified for cash flow hedge accounting treatment, the related gains and losses were deferred in accumulated other comprehensive loss and were amortized to interest expense as interest was accrued on the 2007 Junior Notes.

We previously entered into forward interest rate swap agreements to mitigate the interest rate exposure associated with the issuance of long-term debt related to the acquisition of Integrys. These swap agreements were settled in 2015, and we continue to amortize amounts out of accumulated other comprehensive loss into interest expense over the periods in which the interest costs are recognized in earnings.

The table below shows the amounts related to these cash flow hedges recorded in other comprehensive income (loss) and in earnings, along with our total interest expense on the income statements, for the years ended December 31:


(in millions)	2022		2021		2020
Derivative gain (loss) recognized in other comprehensive income / loss	$	—	$	0.8	$	(5.9)
Net derivative gain (loss) reclassified from accumulated other comprehensive loss to interest expense	0.4		(1.3)		(2.1)
Total interest expense line item on the income statements	515.1		471.1		493.7

We estimate that during the next twelve months $0.4 million will be reclassified from accumulated other comprehensive loss as a reduction to interest expense.