RISK MANAGEMENT ACTIVITIES

6 Months Ended

Jun. 30, 2011

RISK MANAGEMENT ACTIVITIES

RISK MANAGEMENT ACTIVITIES

NOTE 3—RISK MANAGEMENT ACTIVITIES

We use derivative instruments to manage commodity costs.  None of these derivatives are designated as hedges for accounting purposes.  The derivatives include physical commodity contracts and NYMEX futures and options used by both the electric and natural gas utility segments to manage the risks associated with the market price volatility of natural gas supply costs and the costs of gasoline and diesel fuel used by utility vehicles.  The electric utility segment also uses FTRs to manage electric transmission congestion costs and NYMEX oil futures and options to reduce price risk related to coal transportation.

The following tables show our assets and liabilities from risk management activities.

Balance Sheet

		June 30, 2011
		Assets from		Liabilities from
		Risk Management		Risk Management
(Millions)	Presentation *	Activities		Activities
FTRs	Other Current	$	3.5	$	0.1
Natural gas contracts	Other Current	0.5		0.5
Petroleum product contracts	Other Current	0.5		—
Coal contract	Other Current	—		1.3
Coal contract	Other Long-term	—		3.0
Total	Other Current	$	4.5	$	1.9
Total	Other Long-term	$	—	$	3.0

* All derivatives are recognized on the balance sheet at their fair value unless they qualify for the normal purchases and sales exception.  We continually assess our contracts designated as normal and will discontinue the treatment of these contracts as normal if the required criteria are no longer met.  We classify assets and liabilities from risk management activities as current or long-term based upon the maturities of the underlying contracts.

Balance Sheet

		December 31, 2010
(Millions)	Presentation *	Assets from Risk Management Activities		Liabilities from Risk Management Activities
FTRs	Other Current	$	2.2	$	0.2
Natural gas contracts	Other Current	0.4		2.3
Petroleum product contracts	Other Current	0.3		—
Coal contract	Other Current	—		1.2
Coal contract	Other Long-term	3.7		—
Total	Other Current	$	2.9	$	3.7
Total	Other Long-term	$	3.7	$	—

* All derivatives are recognized on the balance sheet at their fair value unless they qualify for the normal purchases and sales exception.  We continually assess our contracts designated as normal and will discontinue the treatment of these contracts as normal if the required criteria are no longer met.  We classify assets and liabilities from risk management activities as current or long-term based upon the maturities of the underlying contracts.

The table below shows the unrealized gains (losses) recorded related to derivatives.

		Three Months Ended June 30						Six Months Ended June 30
(Millions)	Financial Statement Presentation	2011			2010			2011			2010
FTRs	Balance Sheet — Regulatory assets (current)	$	(0.8	)	$	(1.2	)	$	(0.7	)	$	(0.4	)
FTRs	Balance Sheet — Regulatory liabilities (current)	1.2			4.9			0.1			2.8
Natural gas contracts	Balance Sheet — Regulatory assets (current)	(0.1		)	0.6			2.4			(0.1		)
Natural gas contracts	Balance Sheet — Regulatory assets (long-term)	—			0.1			—			(0.1		)
Natural gas contracts	Balance Sheet — Regulatory liabilities (current)	—			0.1			(0.1		)	(0.1		)
Natural gas contracts	Income Statement — Cost of fuel, natural gas, and purchased power	—			0.1			0.1			0.1
Petroleum product contracts	Balance Sheet — Regulatory assets (current)	(0.1		)	N/A			(0.1		)	N/A
Petroleum product contracts	Balance Sheet — Regulatory liabilities (current)	(0.2		)	N/A			0.2			N/A
Petroleum product contracts	Income Statement — Operating and maintenance expense	(0.1		)	(0.1		)	0.1			(0.1		)
Coal contract	Balance Sheet — Regulatory assets (current)	0.3			N/A			(0.2		)	N/A
Coal contract	Balance Sheet — Regulatory assets (long-term)	0.2			N/A			(3.0		)	N/A
Coal contract	Balance Sheet — Regulatory liabilities (long-term)	—			N/A			(3.7		)	N/A

We had the following notional volumes of outstanding derivative contracts:

	June 30, 2011		December 31, 2010
Commodity	Purchases	Other Transactions	Purchases	Other Transactions
Natural gas (millions of therms)	63.1	N/A	100.6	N/A
FTRs (millions of kilowatt-hours)	N/A	10,514.7	N/A	5,645.3
Petroleum products (barrels)	30,324.0	N/A	44,648.0	N/A
Coal contract (millions of tons)	4.5	N/A	4.9	N/A

The following table shows our cash collateral positions:

(Millions)	June 30, 2011		December 31, 2010
Cash collateral provided to others	$	2.0	$	3.7