Risk Management Activities (Tables)

3 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Contract or notional amounts and terms of marketing activities and derivative commodity instruments

The contract or notional amounts and terms of the natural gas derivative commodity instruments held at our utilities are composed of both long and short positions. We were in a net long position as of:

	March 31, 2019		December 31, 2018		March 31, 2018
	Notional (MMBtus)	Maximum Term (months) (a)	Notional (MMBtus)	Maximum Term (months) (a)	Notional (MMBtus)	Maximum Term (months) (a)
Natural gas futures purchased	3,120,000	21	4,000,000	24	6,760,000	33
Natural gas options purchased, net	1,150,000	10	4,320,000	13	170,000	11
Natural gas basis swaps purchased	3,020,000	21	3,960,000	24	6,770,000	33
Natural gas over-the-counter swaps, net (b)	3,316,000	26	3,660,000	24	2,760,000	26
Natural gas physical contracts, net (c)	2,786,980	12	18,325,852	30	386,250	32

__________

(a) Term reflects the maximum forward period hedged.

(b) As of March 31, 2019, 534,000 MMBtus were designated as cash flow hedges.

(c)

Volumes exclude contracts that qualify for the normal purchase, normal sales exception.

Derivative Instruments, Gain (Loss)

The impacts of cash flow hedges on our Condensed Consolidated Statements of Income is presented below for the three months ended March 31, 2019 and 2018. Note that this presentation does not reflect gains or losses arising from the underlying physical transactions; therefore, it is not indicative of the economic profit or loss we realized when the underlying physical and financial transactions were settled.

Three Months Ended March 31, 2019
(in thousands)
Derivatives in Cash Flow Hedging Relationships	Location of Reclassifications from AOCI into Income	Amount of Gain/(Loss) Reclassified from AOCI into Income
Interest rate swaps	Interest expense	$	(713	)
Commodity derivatives	Fuel, purchased power and cost of natural gas sold	554
Total		$	(159	)

Three Months Ended March 31, 2018
(in thousands)
Derivatives in Cash Flow Hedging Relationships	Location of Reclassifications from AOCI into Income	Amount of Gain/(Loss) Reclassified from AOCI into Income
Interest rate swaps	Interest expense	$	(713	)
Commodity derivatives	Fuel, purchased power and cost of natural gas sold	(621		)
Total		$	(1,334	)

The following tables summarize the gains and losses arising from hedging transactions that were recognized as a component of other comprehensive income (loss) for the three months ended March 31, 2019 and 2018.

	Three Months Ended March 31,
	2019			2018
	(in thousands)
Increase (decrease) in fair value:
Forward commodity contracts	$	234		$	(297	)
Recognition of (gains) losses in earnings due to settlements:
Interest rate swaps	713			713
Forward commodity contracts	(554		)	621
Total other comprehensive income (loss) from hedging	$	393		$	1,037

Derivatives Not Designated as Hedge Instruments

The following table summarizes the impacts of derivative instruments not designated as hedge instruments on our Condensed Consolidated Statements of Income for the three months ended March 31, 2019 and 2018 (in thousands). Note that this presentation does not reflect gains or losses arising from the underlying physical transactions; therefore, it is not indicative of the economic profit or loss we realized when the underlying physical and financial transactions were settled.

		Three Months Ended March 31,
		2019		2018
Derivatives Not Designated as Hedging Instruments	Location of Gain/(Loss) on Derivatives Recognized in Income	Amount of Gain/(Loss) on Derivatives Recognized in Income		Amount of Gain/(Loss) on Derivatives Recognized in Income
Commodity derivatives	Fuel, purchased power and cost of natural gas sold	$	25	$	254
		$	25	$	254

As discussed above, financial instruments used in our regulated utilities are not designated as cash flow hedges. However, there is no earnings impact because the unrealized gains and losses arising from the use of these financial instruments are recorded as Regulatory assets or Regulatory liabilities. The net unrealized losses included in our Regulatory assets or Regulatory liability accounts related to the hedges in our utilities were $3.9 million, $6.2 million and $11 million at March 31, 2019, December 31, 2018 and March 31, 2018, respectively.