Fair Value of Financial Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

Gross Notional Amounts of Commodity Forwards and Options

Gross notional amounts of commodity forwards and options:

(Amounts in Millions) (a)(b)	Dec. 31, 2020	Dec. 31, 2019
MWh of electricity	17	9
MMBtu of natural gas	93	32

(a)Not reflective of net positions in the underlying commodities.

(b)Notional amounts for options included on a gross basis, but are weighted for the probability of exercise.

Financial Impact of Qualifying Cash Flow Hedges on Accumulated Other Comprehensive Loss

(Millions of Dollars)	2020		2019		2018
Accumulated other comprehensive loss related to cash flow hedges at Jan. 1	$	(24)	$	(26)	$	(27)
After-tax net realized losses on derivative transactions reclassified into earnings	1		2		1
Accumulated other comprehensive loss related to cash flow hedges at Dec. 31	$	(23)	$	(24)	$	(26)

Impact of Derivative Activity on Accumulated Other Comprehensive Loss, Regulatory Assets and Liabilities, and Income

	Pre-Tax Fair Value Gains (Losses) Recognized During the Period in:
(Millions of Dollars)	Accumulated Other Comprehensive Loss		Regulatory (Assets) and Liabilities
Year Ended Dec. 31, 2020
Other derivative instruments
Natural gas commodity	$	—	$	(10)
Total	$	—	$	(10)
Year Ended Dec. 31, 2019
Other derivative instruments
Natural gas commodity	$	—	$	(5)
Total	$	—	$	(5)
Year Ended Dec. 31, 2018
Other derivative instruments
Natural gas commodity	$	—	$	8
Total	$	—	$	8

	Pre-Tax (Gains) Losses Reclassified into Income During the Period from:
(Millions of Dollars)	Accumulated Other Comprehensive Loss			Regulatory Assets and (Liabilities)			Pre-Tax Gains (Losses) Recognized During the Period in Income
Year Ended Dec. 31, 2020
Derivatives designated as cash flow hedges
Interest rate	$	1	(a)	$	—		$	—
Total	$	1		$	—		$	—
Other derivative instruments
Commodity trading	$	—		$	—		$	3	(b)
Natural gas commodity	—			8		(c)	(8)		(c)
Total	$	—		$	8		$	(5)

(a)    Recorded to interest charges.

(b)    Recorded to electric operating revenues. Portions of these gains and losses are subject to sharing with electric customers through margin-sharing mechanisms and deducted from gross revenue, as appropriate.

(c)    Amounts for the year ended Dec. 31, 2020, included no settlement gains or losses on derivatives entered to mitigate natural gas price risk for electric generation recorded to electric fuel and purchased power, subject to cost-recovery mechanisms and reclassified to a regulatory asset or liability, as appropriate. Remaining settlement losses for the years ended Dec. 31, 2020, relate to natural gas operations and are recorded to cost of natural gas sold and transported. These losses are subject to cost-recovery mechanisms and reclassified out of income to a regulatory asset or liability, as appropriate.

	Pre-Tax (Gains) Losses Reclassified into Income During the Period from:
(Millions of Dollars)	Accumulated Other Comprehensive Loss			Regulatory Assets and (Liabilities)			Pre-Tax Gains (Losses) Recognized During the Period in Income
Year Ended Dec. 31, 2019
Derivatives designated as cash flow hedges
Interest rate	$	2	(a)	$	—		$	—
Total	$	2		$	—		$	—
Other derivative instruments
Commodity trading	$	—		$	—		$	3	(b)
Natural gas commodity	—			1		(c)	(4)		(c)
Total	$	—		$	1		$	(1)

(a)    Recorded to interest charges.

(b)    Recorded to electric operating revenues. Portions of these gains and losses are subject to sharing with electric customers through margin-sharing mechanisms and deducted from gross revenue, as appropriate.

(c)    Amounts for the year ended Dec. 31, 2019, included no settlement gains or losses on derivatives entered to mitigate natural gas price risk for electric generation recorded to electric fuel and purchased power, subject to cost-recovery mechanisms and reclassified to a regulatory asset or liability, as appropriate. Remaining settlement losses for the years ended Dec. 31, 2019, relate to natural gas operations and are recorded to cost of natural gas sold and transported. These losses are subject to cost-recovery mechanisms and reclassified out of income to a regulatory asset or liability, as appropriate.

	Pre-Tax (Gains) Losses Reclassified into Income During the Period from:
(Millions of Dollars)	Accumulated Other Comprehensive Loss			Regulatory Assets and (Liabilities)			Pre-Tax Gains (Losses) Recognized During the Period in Income
Year Ended Dec. 31, 2018
Derivatives designated as cash flow hedges
Interest rate	$	1	(a)	$	—		$	—
Total	$	1		$	—		$	—
Other derivative instruments
Commodity trading	$	—		$	—		$	3	(b)
Natural gas commodity	—			(4)		(c)	(3)		(c)
Total	$	—		$	(4)		$	—

(a)    Recorded to interest charges.

(b)    Recorded to electric operating revenues. Portions of these gains and losses are subject to sharing with electric customers through margin-sharing mechanisms and deducted from gross revenue, as appropriate.

(c)    Amounts for the year ended Dec. 31, 2018, included $1 million of settlement losses on derivatives entered to mitigate natural gas price risk for electric generation recorded to electric fuel and purchased power, subject to cost-recovery mechanisms and reclassified to a regulatory asset or liability, as appropriate. Remaining settlement losses for the years ended Dec. 31, 2018, relate to natural gas operations and are recorded to cost of natural gas sold and transported. These losses are subject to cost-recovery mechanisms and reclassified out of income to a regulatory asset or liability, as appropriate.

Derivative Assets and Liabilities Measured at Fair Value on a Recurring Basis by Hierarchy Level

PSCo’s derivative assets and liabilities measured at fair value on a recurring basis were as follows:

	Dec. 31, 2020												Dec. 31, 2019
	Fair Value						Fair Value Total		Netting (a)		Total		Fair Value						Fair Value Total		Netting (a)		Total
(Millions of Dollars)	Level 1		Level 2		Level 3								Level 1		Level 2		Level 3
Current derivative assets
Other derivative instruments:
Commodity trading	$	1	$	41	$	1	$	43	$	(28)	$	15	$	2	$	11	$	1	$	14	$	(10)	$	4
Natural gas commodity	—		6		—		6		—		6		—		3		—		3		—		3
Total current derivative assets	$	1	$	47	$	1	$	49	$	(28)	$	21	$	2	$	14	$	1	$	17	$	(10)	$	7
Noncurrent derivative assets
Other derivative instruments:
Commodity trading	$	1	$	27	$	8	$	36	$	(20)	$	16	$	1	$	8	$	1	$	10	$	(10)	$	—
Total noncurrent derivative assets	$	1	$	27	$	8	$	36	$	(20)	16		$	1	$	8	$	1	$	10	$	(10)	$	—
Current derivative liabilities
Other derivative instruments:
Commodity trading	$	1	$	46	$	7	$	54	$	(33)	$	21	$	2	$	17	$	—	$	19	$	(13)	$	6
Natural gas commodity	—		6		—		6		—		6		—		3		—		3		—		3
Total current derivative liabilities	$	1	$	52	$	7	$	60	$	(33)	$	27	$	2	$	20	$	—	$	22	$	(13)	$	9
Noncurrent derivative liabilities
Other derivative instruments:
Commodity trading	$	1	$	24	$	46	$	71	$	(20)	$	51	$	1	$	47	$	15	$	63	$	(10)	$	53
Total noncurrent derivative liabilities	$	1	$	24	$	46	$	71	$	(20)	$	51	$	1	$	47	$	15	$	63	$	(10)	$	53

(a)PSCo nets derivative instruments and related collateral on its consolidated balance sheet when supported by a legally enforceable master netting agreement, and all derivative instruments and related collateral amounts were subject to master netting agreements at Dec. 31, 2020 and 2019. At Dec. 31, 2020 and 2019, derivative assets and liabilities include no obligations to return cash collateral, respectively. At Dec. 31, 2020 and 2019, derivative assets and liabilities include rights to reclaim cash collateral of $5 million and $3 million, respectively. The counterparty netting amounts presented exclude settlement receivables and payables and non-derivative amounts that may be subject to the same master netting agreements.

Changes in Level 3 commodity derivatives for the years ended Dec. 31, 2020, 2019 and 2018:

	Year Ended Dec. 31
(Millions of Dollars)	2020		2019		2018
Balance at Jan. 1	$	(13)	$	—	$	—
Settlements	—		(2)		—
Net transactions recorded during the period:
Losses recognized in earnings (a)	(31)		(11)		—
Balance at Dec. 31	$	(44)	$	(13)	$	—

(a)Level 3 losses recognized in earnings are subject to offsetting gains of derivative instruments categorized as levels 1 and 2 in the income statement.

PSCo recognizes transfers between levels as of the beginning of each period. There were no transfers of amounts between levels for derivative instruments for the years ended Dec. 31, 2020, 2019 and 2018.

Fair Value of Long-Term Debt

As of Dec. 31, other financial instruments for which the carrying amount did not equal fair value:

	2020				2019
(Millions of Dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt, including current portion	$	5,724	$	7,040	$	5,385	$	6,039

Fair value of PSCo’s long-term debt is estimated based on recent trades and observable spreads from benchmark interest rates for similar securities. Fair value estimates are based on information available to management as of Dec. 31, 2020 and 2019, and given the observability of the inputs, fair values presented for long-term debt were assigned as Level 2.

Carrying Amount and Fair Value of Long-term Debt

	2020				2019
(Millions of Dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt, including current portion	$	5,724	$	7,040	$	5,385	$	6,039