Risk Management and Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2015

Risk Management and Derivative Financial Instruments

Schedule of fair value of derivative financial instruments, balance sheet classification

As of September 30, 2015 and December 31, 2014, we have recorded the following assets and liabilities representing the fair value of derivative financial instruments, (in thousands):

		September 30,		December 31,
ASSET DERIVATIVES		2015		2014
Hedging instruments	Balance Sheet Classification	Fair Value		Fair Value
Natural gas contracts, gas segment	Current assets	$	5	$	—
	Non-current other assets	17		—
Natural gas contracts, electric segment	Current assets	—		1
Transmission congestion rights, electric segment	Current assets	2,130		3,900
Total derivatives assets		$	2,152	$	3,901

		September 30,		December 31,
LIABILITY DERIVATIVES		2015		2014
Hedging instruments	Balance Sheet Classification	Fair Value		Fair Value
Natural gas contracts, gas segment	Current liabilities	$	219	$	476
	Non-current liabilities and deferred credits	22
Natural gas contracts, electric segment	Current liabilities	4,152		5,993
	Non-current liabilities and deferred credits	3,039		3,243
Total derivatives liabilities		$	7,432	$	9,712

Schedule of mark-to-market pre-tax gains/(losses) from non-designated derivative instruments - electric segment

The following tables set forth “mark-to-market” pre-tax gains/(losses) from non-designated derivative instruments for the electric segment for each of the periods ended September 30, (in thousands):

Non-Designated Hedging	Balance Sheet
Instruments - Due to	Classification of	Amount of Gain / (Loss) Recognized on Balance Sheet
Regulatory Accounting	Gain / (Loss) on	Three Months Ended						Nine Months Ended						Twelve Months Ended
Electric Segment	Derivative	2015			2014			2015			2014			2015			2014
Commodity contracts	Regulatory (assets)/liabilities	$	(1,690	)	$	(2,695	)	$	(3,909	)	$	(537	)	$	(10,152	)	$	903
Transmission congestion rights	Regulatory (assets)/liabilities	125			(267		)	4,750			11,385			6,322			13,352
Total Electric Segment		$	(1,565	)	$	(2,962	)	$	841		$	10,848		$	(3,830	)	$	14,255

	Statement of
Non-Designated Hedging	Income
Instruments - Due to	Classification of	Amount of Gain / (Loss) Recognized in Income on Derivative
Regulatory Accounting	Gain / (Loss) on	Three Months Ended						Nine Months Ended						Twelve Months Ended
Electric Segment	Derivative	2015			2014			2015			2014			2015			2014
Commodity contracts	Fuel and purchased power expense	$	(4,104	)	$	(1,849	)	$	(6,381	)	$	(934	)	$	(7,105	)	$	(1,187	)
Transmission congestion rights	Fuel and purchased power expense	1,133			3,677			6,446			8,899			8,653			8,980
Total Electric Segment		$	(2,971	)	$	1,828		$	65		$	7,965		$	1,548		$	7,793

Schedule of volumes and percentage of anticipated volume of natural gas usage for entity's electric operations with procurement guidelines

			Dth Hedged		Procurement
Year	% Hedged		Physical	Financial	Average Price		Guidelines
Remainder 2015	47	%	—	600,000	$	4.486	Up to 100%
2016	54	%	2,676,000	2,580,000	$	3.795	60%
2017	20	%	782,900	1,300,000	$	4.133	40%
2018	10	%	565,000	500,000	$	4.121	20%
2019	0	%	—	—	$	—	10%

Schedule of transmission congestion rights (TCR)

At September 30, 2015, the following transmission congestion rights (TCR) have been obtained to hedge congestion risk in the SPP IM (dollars in thousands):

Year	Monthly MWH Hedged	Estimated Fair Value
2015	2,608	$	2,130

Schedule of minimum percentage of winter season usage hedged by year of the entity's gas operations

The following table sets forth our long-term hedge strategy of mitigating price volatility for our customers by hedging a minimum of expected gas usage for the current winter season and the next two winter seasons by the beginning of the Actual Cost Adjustment (ACA) year at September 1 and illustrates our hedged position as of September 30, 2015 (Dth in thousands).

Season	Minimum % Hedged*	Dth Hedged Financial	Dth Hedged Physical	Dth in Storage	Actual % Hedged
Current	50%	780,000	—	1,617,261	74	%
Second	Up to 50%	100,000	—	—	3	%
Third	Up to 20%	140,000	—	—	4	%

*Procurement guidelines

Schedule of mark-to-market pre-tax gains/(losses) from non-designated derivative instruments - gas segment

The following table sets forth “mark-to-market” pre-tax gains / (losses) from derivatives not designated as hedging instruments for the gas segment for each of the periods ended September 30, (in thousands).

	Balance Sheet
Non-Designated Hedging	Classification of	Amount of Gain/(Loss) Recognized on Balance Sheet
Instruments Due to Regulatory	Gain / (Loss) on	Three Months Ended						Nine Months Ended					Twelve Months Ended
Accounting - Gas Segment	Derivative	2015			2014			2015			2014		2015			2014
Commodity contracts	Regulatory (assets)/liabilities	$	(236	)	$	(23	)	$	(50	)	$	86	$	(647	)	$	141
Total - Gas Segment		$	(236	)	$	(23	)	$	(50	)	$	86	$	(647	)	$	141

Schedule of margin deposit assets

(in millions)	September 30, 2015		December 31, 2014
Margin deposit assets	$	7.6	$	9.1