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Fair Value Measurements (Tables)
 9 Months Ended
Sep. 30, 2013
Text Block [Abstract]  
PSEG's, Power's And PSE&G's Respective Assets And (Liabilities) Measured At Fair Value On A Recurring Basis
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recurring Fair Value Measurements as of September 30, 2013
 
 
Description
 
Total
 
Cash
Collateral
Netting (D)
 
Quoted Market Prices for Identical Assets
(Level 1)
 
Significant Other Observable Inputs (Level 2)
 
Significant Unobservable Inputs
(Level 3)
 
 
 
 
Millions
 
 
PSEG
 
 
 
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Contracts:
 
 
 
 
 
 
 
 
 
 
 
 
Energy-Related Contracts (A)
 
$
249

 
$
(3
)
 
$
—

 
$
156

 
$
96

 
 
Interest Rate Swaps (B)
 
$
42

 
$
—

 
$
—

 
$
42

 
$
—

 
 
NDT Fund (C)
 
 
 
 
 
 
 
 
 
 
 
 
Equity Securities
 
$
843

 
$
—

 
$
842

 
$
1

 
$
—

 
 
Debt Securities—Govt Obligations
 
$
410

 
$
—

 
$
—

 
$
410

 
$
—

 
 
Debt Securities—Other
 
$
320

 
$
—

 
$
—

 
$
320

 
$
—

 
 
Other Securities
 
$
62

 
$
—

 
$
—

 
$
62

 
$
—

 
 
Rabbi Trust (C)
 
 
 
 
 
 
 
 
 
 
 
 
Equity Securities—Mutual Funds
 
$
21

 
$
—

 
$
21

 
$
—

 
$
—

 
 
Debt Securities—Govt Obligations
 
$
108

 
$
—

 
$
—

 
$
108

 
$
—

 
 
Debt Securities—Other
 
$
44

 
$
—

 
$
—

 
$
44

 
$
—

 
 
Other Securities
 
$
2

 
$
—

 
$
—

 
$
2

 
$
—

 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Contracts:
 
 
 
 
 
 
 
 
 
 
 
 
Energy-Related Contracts (A)
 
$
(199
)
 
$
1

 
$
—

 
$
(58
)
 
$
(142
)
 
 
Power
 
 
 
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Contracts:
 
 
 
 
 
 
 
 
 
 
 
 
Energy-Related Contracts (A)
 
$
161

 
$
(3
)
 
$
—

 
$
156


$
8

 
 
NDT Fund (C)
 
 
 
 
 
 
 
 
 
 
 
 
Equity Securities
 
$
843

 
$
—

 
$
842

 
$
1

 
$
—

 
 
Debt Securities—Govt Obligations
 
$
410

 
$
—

 
$
—

 
$
410

 
$
—

 
 
Debt Securities—Other
 
$
320

 
$
—

 
$
—

 
$
320

 
$
—

 
 
Other Securities
 
$
62

 
$
—

 
$
—

 
$
62

 
$
—

 
 
Rabbi Trust (C)
 
 
 
 
 
 
 
 
 
 
 
 
Equity Securities—Mutual Funds
 
$
5

 
$
—

 
$
5

 
$
—

 
$
—

 
 
Debt Securities—Govt Obligations
 
$
23

 
$
—

 
$
—

 
$
23

 
$
—

 
 
Debt Securities—Other
 
$
10

 
$
—

 
$
—

 
$
10

 
$
—

 
 
Other Securities
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Contracts:
 
 
 
 
 
 
 
 
 
 
 
 
Energy-Related Contracts (A)
 
$
(59
)
 
$
1

 
$
—

 
$
(58
)
 
$
(2
)
 
 
PSE&G
 
 
 
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Contracts:
 
 
 
 
 
 
 
 
 
 
 
 
Energy-Related Contracts (A)
 
$
88

 
$
—

 
$
—

 
$
—

 
$
88

 
 
Rabbi Trust (C)
 
 
 
 
 
 
 
 
 
 
 
 
Equity Securities—Mutual Funds
 
$
5

 
$
—

 
$
5

 
$
—

 
$
—

 
 
Debt Securities—Govt Obligations
 
$
26

 
$
—

 
$
—

 
$
26

 
$
—

 
 
Debt Securities—Other
 
$
10

 
$
—

 
$
—

 
$
10

 
$
—

 
 
Other Securities
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Contracts:
 
 
 
 
 
 
 
 
 
 
 
 
Energy-Related Contracts (A)
 
$
(140
)
 
$
—

 
$
—

 
$
—

 
$
(140
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recurring Fair Value Measurements as of December 31, 2012
 
 
Description
 
Total
 
Cash
Collateral
Netting (D)
 
Quoted Market Prices for Identical Assets
(Level 1)
 
Significant Other Observable Inputs (Level 2)
 
Significant Unobservable Inputs
(Level 3)
 
 
 
 
Millions
 
 
PSEG
 
 
 
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Contracts:
 
 
 
 
 
 
 
 
 
 
 
 
Energy-Related Contracts (A)
 
$
234

 
$
(3
)
 
$
—

 
$
157

 
$
80

 
 
Interest Rate Swaps (B)
 
$
57

 
$
—

 
$
—

 
$
57

 
$
—

 
 
NDT Fund (C)
 
 
 
 
 
 
 
 
 
 
 
 
Equity Securities
 
$
789

 
$
—

 
$
789

 
$
—

 
$
—

 
 
Debt Securities—Govt Obligations
 
$
285

 
$
—

 
$
—

 
$
285

 
$
—

 
 
Debt Securities—Other
 
$
342

 
$
—

 
$
—

 
$
342

 
$
—

 
 
Other Securities
 
$
124

 
$
—

 
$
—

 
$
124

 
$
—

 
 
Rabbi Trust (C)
 
 
 
 
 
 
 
 
 
 
 
 
Equity Securities—Mutual Funds
 
$
18

 
$
—

 
$
18

 
$
—

 
$
—

 
 
Debt Securities—Govt Obligations
 
$
117

 
$
—

 
$
—

 
$
117

 
$
—

 
 
Debt Securities—Other
 
$
47

 
$
—

 
$
—

 
$
47

 
$
—

 
 
Other Securities
 
$
3

 
$
—

 
$
—

 
$
3

 
$
—

 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Contracts:
 
 
 
 
 
 
 
 
 
 
 
 
Energy-Related Contracts (A)
 
$
(168
)
 
$
5

 
$
—

 
$
(62
)
 
$
(111
)
 
 
Power
 
 
 
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Contracts:
 
 
 
 
 
 
 
 
 
 
 
 
Energy-Related Contracts (A)
 
$
167

 
$
(3
)
 
$
—

 
$
157

 
$
13

 
 
NDT Fund (C)
 
 
 
 
 
 
 
 
 
 
 
 
Equity Securities
 
$
789

 
$
—

 
$
789

 
$
—

 
$
—

 
 
Debt Securities—Govt Obligations
 
$
285

 
$
—

 
$
—

 
$
285

 
$
—

 
 
Debt Securities—Other
 
$
342

 
$
—

 
$
—

 
$
342

 
$
—

 
 
Other Securities
 
$
124

 
$
—

 
$
—

 
$
124

 
$
—

 
 
Rabbi Trust (C)
 
 
 
 
 
 
 
 
 
 
 
 
Equity Securities—Mutual Funds
 
$
3

 
$
—

 
$
3

 
$
—

 
$
—

 
 
Debt Securities—Govt Obligations
 
$
23

 
$
—

 
$
—

 
$
23

 
$
—

 
 
Debt Securities—Other
 
$
9

 
$
—

 
$
—

 
$
9

 
$
—

 
 
Other Securities
 
$
1

 
$
—

 
$
—

 
$
1

 
$
—

 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Contracts:
 
 
 
 
 
 
 
 
 
 
 
 
Energy-Related Contracts (A)
 
$
(61
)
 
$
5

 
$
—

 
$
(62
)
 
$
(4
)
 
 
PSE&G
 
 
 
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Contracts:
 
 
 
 
 
 
 
 
 
 
 
 
Energy Related Contracts (A)
 
$
67

 
$
—

 
$
—

 
$
—

 
$
67

 
 
Rabbi Trust (C)
 
 
 
 
 
 
 
 
 
 
 
 
Equity Securities—Mutual Funds
 
$
6

 
$
—

 
$
6

 
$
—

 
$
—

 
 
Debt Securities—Govt Obligations
 
$
39

 
$
—

 
$
—

 
$
39

 
$
—

 
 
Debt Securities—Other
 
$
15

 
$
—

 
$
—

 
$
15

 
$
—

 
 
Other Securities
 
$
1

 
$
—

 
$
—

 
$
1

 
$
—

 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Contracts:
 
 
 
 
 
 
 
 
 
 
 
 
Energy Related Contracts (A)
 
$
(107
)
 
$
—

 
$
—

 
$
—

 
$
(107
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(A)
Level 2—Fair values for energy-related contracts are obtained primarily using a market-based approach. Most derivative contracts (forward purchase or sale contracts and swaps) are valued using the average of the bid/ask midpoints from multiple broker or dealer quotes or auction prices. Prices used in the valuation process are also corroborated independently by management to determine that values are based on actual transaction data or, in the absence of transactions, bid and offers for the day. Examples may include certain exchange and non-exchange traded capacity and electricity contracts and natural gas physical or swap contracts based on market prices, basis adjustments and other premiums where adjustments and premiums are not considered significant to the overall inputs.
Level 3—For energy-related contracts, which include more complex agreements where limited observable inputs or pricing information are available, modeling techniques are employed using assumptions reflective of contractual terms, current market rates, forward price curves, discount rates and risk factors, as applicable. Fair values of other energy contracts may be based on broker quotes that we cannot corroborate with actual market transaction data.
(B)
Interest rate swaps are valued using quoted prices on commonly quoted intervals, which are interpolated for periods different than the quoted intervals, as inputs to a market valuation model. Market inputs can generally be verified and model selection does not involve significant management judgment.
(C)
The NDT Fund maintains investments in various equity and fixed income securities classified as “available for sale.” The Rabbi Trust maintains investments in an S&P 500 index fund and various fixed income securities classified as “available for sale.” These securities are generally valued with prices that are either exchange provided (equity securities) or market transactions for comparable securities and/or broker quotes (fixed income securities).
Level 1—Investments in marketable equity securities within the NDT Fund are primarily investments in common stocks across a broad range of industries and sectors. Most equity securities are priced utilizing the principal market close price or, in some cases, midpoint, bid or ask price (primarily Level 1). The Rabbi Trust equity index fund is valued based on quoted prices in an active market (Level 1).
Level 2—NDT and Rabbi Trust fixed income securities are limited to investment grade corporate bonds and United States Treasury obligations or Federal Agency asset-backed securities with a wide range of maturities. Since many fixed income securities do not trade on a daily basis, they are priced using an evaluated pricing methodology that varies by asset class and reflects observable market information such as the most recent exchange price or quoted bid for similar securities. Market-based standard inputs typically include benchmark yields, reported trades, broker/dealer quotes and issuer spreads (primarily Level 2). Short-term investments and certain commingled temporary investments are valued using observable market prices or market parameters such as time-to-maturity, coupon rate, quality rating and current yield (primarily Level 2).
(D)
Cash collateral netting represents collateral amounts netted against derivative assets and liabilities as permitted under the accounting guidance for Offsetting of Amounts Related to Certain Contracts
Schedule of Quantitative Information About Level 3 Fair Value Measurements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quantitative Information About Level 3 Fair Value Measurements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Significant
 
 
 
 
 
 
 
 
Fair Value as of
 
Valuation
 
Unobservable
 
 
 
 
Commodity
 
Level 3 Position
 
September 30, 2013
 
Technique(s)
 
 Input
 
Range
 
 
 
 
 
 
Assets
 
(Liabilities)
 
 
 
 
 
 
 
 
 
 
 
 
Millions
 
 
 
 
 
 
 
 
Power
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                Electricity
 
             Electric Swaps
 
$
7

 
$
—

 
Discounted Cash Flow
 
Power Basis
 
$0 to $10/MWh
 
 
                 Electricity
 
Electric Load Contracts
 
—

 
(2
)
 
Discounted Cash Flow
 
Historic Load Variability
 
-5% to +10%
 
 
Other
 
Various (A)
 
1

 
—

 
 
 
 
 
 
 
 
Total Power
 
 
 
$
8

 
$
(2
)
 
 
 
 
 
 
 
 
PSE&G
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gas and Capacity
 
   Forward Contracts (B)
 
$
88

 
$
(140
)
 
Discounted Cash Flow
 
Long-Term Capacity Prices and Transportation Costs
 
(B)
 
 
Total PSE&G
 
 
 
$
88

 
$
(140
)
 
 
 
 
 
 
 
 
TOTAL PSEG
 
 
 
$
96

 
$
(142
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quantitative Information About Level 3 Fair Value Measurements
 
 
 
 
Commodity
 
Level 3 Position
 
Fair Value as of December 31, 2012
 
Valuation
Technique(s)
 
Significant
Unobservable Input
 
Range
 
 
 
 
 
 
Assets
 
(Liabilities)
 
 
 
 
 
 
 
 
 
 
 
 
Millions
 
 
 
 
 
 
 
 
Power
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                Electricity
 
               Electric Swaps
 
$
7

 
$
(1
)
 
Discounted Cash Flow
 
Power Basis
 
                    $0 to $10/MWh
 
 
                 Electricity
 
Electric Load Contracts
 
1

 
(2
)
 
Discounted Cash Flow
 
Historic Load Variability
 
-5% to +10%
 
 
Other
 
Various (A)
 
5

 
(1
)
 
 
 
 
 
 
 
 
Total Power
 
 
 
$
13

 
$
(4
)
 
 
 
 
 
 
 
 
PSE&G
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gas and Capacity
 
                     Forward Contracts (C) 
 
$
67

 
$
(107
)
 
Discounted Cash Flow
 
Long-Term Gas Basis and Capacity Prices
 
(C)
 
 
Total PSE&G
 
 
 
$
67

 
$
(107
)
 
 
 
 
 
 
 
 
TOTAL PSEG
 
 
 
$
80

 
$
(111
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(A)
Includes gas supply positions which are immaterial as of September 30, 2013 and December 31, 2012. Also includes long-term electric capacity positions which are immaterial as of December 31, 2012.    
(B)
Unobservable inputs for the long-term electric capacity contracts include forecasted capacity prices in the range of $100 to $400/MW day. Unobservable inputs for gas supply contracts include the weighted average cost of transporting gas in the range of $0.70 to $1 per dekatherm.
(C)
Includes long-term electric capacity and long-term gas supply positions with various unobservable inputs. Unobservable inputs for the long-term electric capacity contracts include forecasted capacity prices in the range of $100 to $400/MW day. Significant unobservable inputs for the gas supply contracts include long-term basis prices in the range of $0 to $4/MMBTU of natural gas.
Changes In Level 3 Assets And (Liabilities) Measured At Fair Value On A Recurring Basis
Changes in Level 3 Assets and (Liabilities) Measured at Fair Value on a Recurring Basis for the Three Months Ended September 30, 2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Gains or (Losses)
Realized/Unrealized
 
 
 
 
 
 
 
 
 
 
Description
 
Balance as of
July 1, 2013
 
Included in
Income (A)
 
Included in
Regulatory Assets/
Liabilities (B)
 
Purchases
(Sales)
 
Issuances/
Settlements
(C)
 
Transfers
In/Out
(D)
 
Balance as of September 30, 2013
 
 
 
 
Millions
 
 
 
 
PSEG
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Derivative Assets (Liabilities)
 
$
(35
)
 
$
1

 
$
(11
)
 
$
—

 
$
(1
)
 
$
—

 
$
(46
)
 
 
Power
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Derivative Assets (Liabilities)
 
$
6

 
$
1

 
$
—

 
$
—

 
$
(1
)
 
$
—

 
$
6

 
 
PSE&G
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Derivative Assets (Liabilities)
 
$
(41
)
 
$
—

 
$
(11
)
 
$
—

 
$
—

 
$
—

 
$
(52
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Changes in Level 3 Assets and (Liabilities) Measured at Fair Value on a Recurring Basis
for the Nine Months Ended September 30, 2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Gains or (Losses)
Realized/Unrealized
 
 
 
 
 
 
 
 
 
 
Description
 
Balance as of
January 1, 2013
 
Included in
Income (E)
 
Included in
Regulatory Assets/
Liabilities (B)
 
Purchases
(Sales)
 
Issuances/
Settlements
(C)
 
Transfers
In/Out
(D)
 
Balance as of September 30, 2013
 
 
 
 
Millions
 
 
 
 
PSEG
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Derivative Assets (Liabilities)
 
$
(31
)
 
$
(16
)
 
$
(12
)
 
$
—

 
$
9

 
$
4

 
$
(46
)
 
 
Power
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Derivative Assets (Liabilities)
 
$
9

 
$
(16
)
 
$
—

 
$
—

 
$
9

 
$
4

 
$
6

 
 
PSE&G
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Derivative Assets (Liabilities)
 
$
(40
)
 
$
—

 
$
(12
)
 
$
—

 
$
—

 
$
—

 
$
(52
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Changes in Level 3 Assets and (Liabilities) Measured at Fair Value on a Recurring Basis for the Three Months Ended September 30, 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Gains or (Losses)
Realized/Unrealized
 
 
 
 
 
 
 
 
 
 
Description
 
Balance as of
July 1, 2012
 
Included in
Income (A)
 
Included in
Regulatory Assets/
Liabilities (B)
 
Purchases
(Sales)
 
Issuances/
Settlements
(C)
 
Transfers
In/Out
(D)
 
Balance as of September 30, 2012
 
 
 
 
Millions
 
 
 
 
PSEG
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Derivative Assets (Liabilities)
 
$
(36
)
 
$
(1
)
 
$
25

 
$
—

 
$
(9
)
 
$
—

 
$
(21
)
 
 
Non-Recourse Debt
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
 
Power
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Derivative Assets (Liabilities)
 
$
22

 
$
(1
)
 
$
—

 
$
—

 
$
(9
)
 
$
—

 
$
12

 
 
PSE&G
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Derivative Assets (Liabilities)
 
$
(58
)
 
$
—

 
$
25

 
$
—

 
$
—

 
$
—

 
$
(33
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Changes in Level 3 Assets and (Liabilities) Measured at Fair Value on a Recurring Basis
for the Nine Months Ended September 30, 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Gains or (Losses)
Realized/Unrealized
 
 
 
 
 
 
 
 
 
 
Description
 
Balance as of
January 1, 2012
 
Included in
Income (E)
 
Included in
Regulatory Assets/
Liabilities (B)
 
Purchases
(Sales)
 
Issuances/
Settlements
(C)
 
Transfers
In/Out
(D)
 
Balance as of September 30, 2012
 
 
 
 
Millions
 
 
 
 
PSEG
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Derivative Assets (Liabilities)
 
$
21

 
$
40

 
$
(30
)
 
$
—

 
$
(52
)
 
$
—

 
$
(21
)
 
 
Non-Recourse Debt
 
$
(50
)
 
$
50

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
 
Power
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Derivative Assets (Liabilities)
 
$
24

 
$
40

 
$
—

 
$
—

 
$
(52
)
 
$
—

 
$
12

 
 
PSE&G
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Derivative Assets (Liabilities)
 
$
(3
)
 
$
—

 
$
(30
)
 
$
—

 
$
—

 
$
—

 
$
(33
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(A)
PSEG’s and Power’s gains and losses attributable to changes in net derivative assets and liabilities include $1 million and $(1) million in Operating Income in 2013 and 2012, respectively. The $1 million in Operating Income in 2013 is unrealized. Of the $(1) million in Operating Income in 2012, $(10) million is unrealized. Energy Holdings' release from its obligation under the non-recourse debt is included in PSEG's Operating Income for 2012 and is offset by the write-off of the related assets.
(B)
Mainly includes gains/losses on PSE&G’s derivative contracts that are not included in either earnings or OCI, as they are deferred as a Regulatory Asset/Liability and are expected to be recovered from/returned to PSE&G’s customers.
(C)
Represents $(1) million and $(9) million in settlements for the three months ended September 30, 2013 and 2012. Includes $9 million and $(52) million in settlements for the nine months ended September 30, 2013 and 2012, respectively.
(D)
During the nine months ended September 30, 2013, $4 million of net derivatives assets/liabilities were transferred from Level 3 to Level 2 due to more observable pricing for the underlying securities. The transfer was recognized as of the beginning of the first quarter (i.e. the quarter in which the transfer occurred), as per PSEG's policy. There were no transfers among levels during the three months ended September 30, 2013 and 2012 and the nine months ended September 30, 2012.
(E)
PSEG’s and Power’s gains and losses attributable to changes in net derivative assets and liabilities include $(16) million and $40 million in Operating Income in 2013 and 2012, respectively. Of the $(16) million in Operating Income in 2013, $(7) million is unrealized. Of the $40 million in Operating Income in 2012, $(12) million is unrealized. Energy Holdings' release from its obligation under the non-recourse debt is included in PSEG's Operating Income for 2012 and is offset by the write-off of the related assets.
Schedule Of Fair Value Of Debt Table [Text Block]
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2013
 
December 31, 2012
 
 
 
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
 
 
 
Millions
 
 
Long-Term Debt:
 
 
 
 
 
 
 
 
 
PSEG (Parent) (A)
$
27

 
$
42

 
$
38

 
$
57

 
 
Power -Recourse Debt (B)
2,041

 
2,355

 
2,340

 
2,818

 
 
PSE&G (B)
5,841

 
6,058

 
4,795

 
5,606

 
 
Transition Funding (PSE&G) (B)
534

 
578

 
690

 
765

 
 
Transition Funding II (PSE&G) (B)
27

 
28

 
32

 
34

 
 
Energy Holdings:
 
 
 
 
 
 
 
 
 
Project Level, Non-Recourse Debt (C)
16

 
16

 
44

 
44

 
 
Total Long-Term Debt
$
8,486

 
$
9,077

 
$
7,939

 
$
9,324

 
 
 
 
 
 
 
 
 
 
 
(A)
Fair value represents net offsets to debt resulting from adjustments from interest rate swaps entered into to hedge certain debt at Power. Carrying amount represents such fair value reduced by the unamortized premium resulting from a debt exchange entered into between Power and Energy Holdings.
(B)
The debt fair valuation is based on the present value of each bond’s future cash flows. The discount rates used in the present value analysis are based on an estimate of new issue bond yields across the treasury curve. When a bond has embedded options, an interest rate model is used to reflect the impact of interest rate volatility into the analysis (primarily Level 2 measurements).
(C)
Non-recourse project debt is valued as equivalent to the amortized cost and is classified as a Level 3 measurement.