Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2022

Derivative Instruments And Hedging Activities Disclosure [Abstract]

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. There were $4 million in gross assets presented in the Consolidated Balance Sheets for over-the-counter interest rate contracts that are subject to master netting or similar agreements at September 30, 2022 and no such amounts at December 31, 2021. There were no financial instruments or cash collateral received to offset the gross position at either date.

	September 30, 2022								December 31, 2021
	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⁽¹⁾		Financial Instruments		Cash Collateral Paid		Net Amounts		Gross Liabilities Presented in the Consolidated Balance Sheet⁽¹⁾		Financial Instruments		Cash Collateral Paid		Net Amounts
Interest rate contracts:
Over-the-counter	$	3	$	—	$	3	$	—	$	19	$	—	$	11	$	8
Total derivatives	$	3	$	—	$	3	$	—	$	19	$	—	$	11	$	8

(1)	There were no derivative liabilities that are not subject to master netting or similar arrangements at September 30, 2022 or December 31, 2021.

Schedule of Volume of Derivative Activity

The following table presents the volume of derivative activity at September 30, 2022. 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		24
Interest rate⁽¹⁾(in millions)	$	—	$	71

(1)	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, 2022
ASSETS
Current Assets
Commodity	$	—	$	68	$	68
Total current derivative assets⁽¹⁾		—		68		68
Noncurrent Assets
Commodity		—		199		199
Interest rate		—		4		4
Total noncurrent derivative assets⁽²⁾		—		203		203
Total derivative assets	$	—	$	271	$	271
LIABILITIES
Current Liabilities
Interest rate	$	—	$	—	$	—
Total current derivative liabilities⁽³⁾		—		—		—
Noncurrent Liabilities
Interest rate		3		—		3
Total noncurrent derivative liabilities⁽⁴⁾		3		—		3
Total derivative liabilities	$	3	$	—	$	3
At December 31, 2021
ASSETS
Current Assets
Commodity	$	—	$	18	$	18
Total current derivative assets⁽¹⁾		—		18		18
Noncurrent Assets
Commodity		—		130		130
Total noncurrent derivative assets⁽²⁾		—		130		130
Total derivative assets	$	—	$	148	$	148
LIABILITIES
Current Liabilities
Interest rate	$	1	$	1	$	2
Total current derivative liabilities⁽³⁾		1		1		2
Noncurrent Liabilities
Interest rate		11		6		17
Total noncurrent derivative liabilities⁽⁴⁾		11		6		17
Total derivative liabilities	$	12	$	7	$	19

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

(4)	^{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, 2022
Derivative type and location of gains (losses):
Interest rate	$	2
Total	$	2
Three Months Ended September 30, 2021
Derivative type and location of gains (losses):
Interest rate	$	1
Total	$	1
Nine Months Ended September 30, 2022
Derivative type and location of gains (losses):
Interest rate	$	10
Total	$	10
Nine Months Ended September 30, 2021
Derivative type and location of gains (losses):
Interest rate	$	7
Total	$	7

(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 Instrument

(millions)	Amount of Gain (Loss) Recognized in Income on Derivatives⁽¹⁾
Three Months Ended September 30,	2022			2021
Derivative type and location of gains (losses):
Commodity contracts:
Purchased power	$	48		$	3
Interest rate contracts:
Interest charges		(1	)		—
Total	$	47		$	3
Nine Months Ended September 30,
Derivative type and location of gains (losses):
Commodity contracts:
Purchased power	$	66		$	3
Interest rate contracts:
Interest charges		(2	)		(1	)
Total	$	64		$	2

(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.