Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Offsetting Assets

The table below presents derivative balances by type of financial instrument, if the gross amounts recognized in the Consolidated Balance Sheets were netted with derivative instruments and cash collateral received or paid. DESC’s commodity derivative assets are not subject to a master netting agreement or similar arrangement.

	September 30, 2023								December 31, 2022
	Gross Amounts Not Offset in the Consolidated Balance Sheet								Gross Amounts Not Offset in the Consolidated Balance Sheet
(millions)	Gross Assets Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Received		Net Amounts		Gross Assets Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Received		Net Amounts
Interest rate contracts:
Over-the-counter	$	2	$	—	$	—	$	2	$	1	$	—	$	—	$	1
Total derivatives	$	2	$	—	$	—	$	2	$	1	$	—	$	—	$	1

Offsetting Liabilities

	September 30, 2023								December 31, 2022
	Gross Amounts Not Offset in the Consolidated Balance Sheet								Gross Amounts Not Offset in the Consolidated Balance Sheet
(millions)	Gross Liabilities Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Paid		Net Amounts		Gross Liabilities Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Paid		Net Amounts
Interest rate contracts:
Over-the-counter	$	1	$	—	$	1	$	—	$	2	$	—	$	1	$	1
Total derivatives	$	1	$	—	$	1	$	—	$	2	$	—	$	1	$	1

Schedule of Volume of Derivative Activity

The following table presents the volume of derivative activity at September 30, 2023. These volumes are based on open derivative positions and represent the combined absolute value of their long and short positions.

	Current		Noncurrent
Electricity (MWh in millions):
Fixed price		2		22
Interest rate(1)(in millions)	$	—	$	71

Maturity is determined based on final settlement period.

Fair Value of Derivatives

The following tables present the fair values of derivatives and where they are presented in the Consolidated Balance Sheets:

(millions)	Fair Value - Derivatives under Hedge Accounting		Fair Value - Derivatives not under Hedge Accounting		Total Fair Value
At September 30, 2023
ASSETS
Current Assets
Commodity	$	—	$	18	$	18
Total current derivative assets(1)		—		18		18
Noncurrent Assets
Commodity		—		153		153
Interest rate		—		2		2
Total noncurrent derivative assets(2)		—		155		155
Total derivative assets	$	—	$	173	$	173
LIABILITIES
Noncurrent Liabilities
Interest rate		—		1		1
Total noncurrent derivative liabilities(3)		—		1		1
Total derivative liabilities	$	—	$	1	$	1
At December 31, 2022
ASSETS
Current Assets
Commodity	$	—	$	41	$	41
Total current derivative assets(1)		—		41		41
Noncurrent Assets
Commodity		—		210		210
Interest rate		—		1		1
Total noncurrent derivative assets(2)		—		211		211
Total derivative assets	$	—	$	252	$	252
LIABILITIES
Noncurrent Liabilities
Interest rate		2		—		2
Total noncurrent derivative liabilities(3)		2		—		2
Total derivative liabilities	$	2	$	—	$	2

(1)Current derivative assets are presented in other current assets in DESC’s Consolidated Balance Sheets.

(2)Noncurrent derivative assets are presented in other deferred debits and other assets in DESC’s Consolidated Balance Sheets.

(3)Noncurrent derivative liabilities are presented in other deferred credits and other liabilities in DESC’s Consolidated Balance Sheets.

Derivatives in Cash Flow Hedging Relationships

The following tables present the gains and losses on derivatives, as well as where the associated activity is presented in the Consolidated Balance Sheets and Statements of Comprehensive Income:

Derivatives in Cash Flow Hedging Relationships

(millions)	Increase (Decrease) in Derivatives Subject to Regulatory Treatment(1)
Three Months Ended September 30,	2023		2022
Derivative type and location of gains (losses):
Interest rate	$	—	$	2
Total	$	—	$	2
Nine Months Ended September 30,
Derivative type and location of gains (losses):
Interest rate	$	—	$	10
Total	$	—	$	10

(1)Represents net derivative activity deferred into and amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/ liabilities have no associated effect in the Consolidated Statements of Comprehensive Income.

Derivatives Not Designated as Hedging Instruments

Derivatives Not Designated as Hedging Instruments

(millions)	Amount of Gain (Loss) Recognized in Income on Derivatives(1)
Three Months Ended September 30,	2023			2022
Derivative type and location of gains (losses):
Commodity:
Purchased power	$	4		$	48
Interest rate:
Interest charges		—			(1	)
Total	$	4		$	47
Nine Months Ended September 30,
Derivative type and location of gains (losses):
Commodity:
Purchased power	$	4		$	66
Interest rate:
Interest charges		(1	)		(2	)
Total	$	3		$	64

(1)Includes derivative activity amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in the Consolidated Statements of Comprehensive Income.