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Fair Value Measurements, Including Derivatives (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of Quantitative Information About Level 3 Fair Value Measurements

The following table presents DESC’s quantitative information about Level 3 fair value measurements at December 31, 2022. The range and weighted average are presented in dollars for market price inputs.

Fair Value (millions)

Valuation Techniques

Unobservable Input

Range

Weighted Average(1)

Assets

Physical forwards:

Electricity

251

Discounted cash flow

Market price (per MWh)(2)

27-110

51

Total assets

251

(1)

Averages weighted by volume.

(2)

Represents market prices beyond defined terms for Levels 1 and 2.

Schedule of Sensitivity of The Fair Value Measurements To Changes in The Significant Unobservable Inputs

Sensitivity of the fair value measurements to changes in the significant unobservable inputs is as follows:


Significant Unobservable Inputs	Position	Change to Input	Impact on Fair Value Measurement
Market price	Buy	Increase (decrease)	Gain (loss)
Market price	Sell	Increase (decrease)	Loss (gain)

Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table presents DESC’s assets and liabilities that are measured at fair value on a recurring basis for each hierarchy level, including both current and noncurrent portions:


	Level 1		Level 2		Level 3		Total
(millions)
At December 31, 2022
Assets
Commodity	$	—	$	—	$	251	$	251
Interest rate		—		1		—		1
Total assets	$	—	$	1	$	251	$	252
Liabilities
Interest rate	$	—	$	2	$	—	$	2
Total liabilities	$	—	$	2	$	—	$	2
At December 31, 2021
Assets
Commodity	$	—	$	—	$	148	$	148
Total assets	$	—	$	—	$	148	$	148
Liabilities
Interest rate	$	—	$	19	$	—	$	19
Total liabilities	$	—	$	19	$	—	$	19

Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis and included in Level 3

The following table presents the net change in DESC's assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value category. There were no net changes in assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value category for the year ended December 31, 2020.


	2022			2021
(millions)
Balance at January 1,	$	148		$	—
Total realized and unrealized gains (losses):
Included in earnings:
Purchased power		77			8
Included in regulatory assets/liabilities		103			148
Settlements		(77	)		(8	)
Balance at December 31,	$	251		$	148

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments

For financial instruments that are not recorded at fair value, the carrying amounts and estimated fair values are as follows:


At December 31,	2022				2021
(millions)	Carrying Amount		Estimated Fair Value(1)		Carrying Amount		Estimated Fair Value(1)
Long-term debt(2)	$	3,725	$	3,614	$	3,724	$	4,831
Affiliated long-term debt		230		230		230		230

(1)

Fair value is estimated using market prices, where available, and interest rates currently available for issuance of debt with similar terms and remaining maturities. All fair value measurements are classified as Level 2. The carrying amount of debt issuances with short-term maturities and variable rates refinanced at current market rates is a reasonable estimate of their fair value.

(2)

Carrying amount includes current portions included in securities due within one year and amounts which represent the unamortized debt issuance costs and discount or premium.