XML 104 R35.htm IDEA: XBRL DOCUMENT

Derivatives and Hedging (Tables)

6 Months Ended

Jun. 30, 2023

Notional Volume of Derivative Instruments

June 30, 2023


Primary Risk Exposure	Unit of Measure	AEP		AEP Texas		APCo		I&M		OPCo		PSO		SWEPCo
		(in millions)
Commodity:
Power	MWhs	269.9		—		29.1		9.2		2.3		8.7		6.9

Natural Gas	MMBtus	136.8		—		5.2		—		—		28.3		7.3
Heating Oil and Gasoline	Gallons	6.7		1.8		1.0		0.6		1.4		0.9		0.9
Interest Rate	USD	$	91.4	$	—	$	—	$	—	$	—	$	—	$	—

Interest Rate on Long-term Debt	USD	$	950.0	$	—	$	—	$	—	$	—	$	—	$	—

December 31, 2022


Primary Risk Exposure	Unit of Measure	AEP		AEP Texas		APCo		I&M		OPCo		PSO		SWEPCo
		(in millions)
Commodity:
Power	MWhs	226.8		—		17.9		4.2		2.5		2.9		2.2

Natural Gas	MMBtus	77.1		—		1.9		—		—		1.9		2.1
Heating Oil and Gasoline	Gallons	6.9		1.9		1.0		0.7		1.4		0.9		1.0
Interest Rate	USD	$	99.9	$	—	$	—	$	—	$	—	$	—	$	—

Interest Rate on Long-term Debt	USD	$	1,650.0	$	—	$	—	$	—	$	—	$	200.0	$	—

Fair Value of Derivative Instruments

AEP


	June 30, 2023
	Risk Management Contracts		Hedging Contracts				Gross Amounts of Risk Management Assets/ Liabilities Recognized		Gross Amounts Offset in the Statement of Financial Position (b)		Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c)
Balance Sheet Location	Commodity (a)		Commodity (a)		Interest Rate (a)
	(in millions)
Current Risk Management Assets	$	721.6	$	43.4	$	—	$	765.0	$	(485.5)	$	279.5
Long-term Risk Management Assets	466.4		95.1		—		561.5		(294.7)		266.8
Total Assets	1,188.0		138.5		—		1,326.5		(780.2)		546.3

Current Risk Management Liabilities	631.5		12.8		42.6		686.9		(510.7)		176.2
Long-term Risk Management Liabilities	418.5		6.7		82.1		507.3		(232.0)		275.3
Total Liabilities	1,050.0		19.5		124.7		1,194.2		(742.7)		451.5

Total MTM Derivative Contract Net Assets (Liabilities)	$	138.0	$	119.0	$	(124.7)	$	132.3	$	(37.5)	$	94.8


	December 31, 2022
	Risk Management Contracts		Hedging Contracts				Gross Amounts of Risk Management Assets/ Liabilities Recognized		Gross Amounts Offset in the Statement of Financial Position (b)		Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c)
Balance Sheet Location	Commodity (a)		Commodity (a)		Interest Rate (a)
	(in millions)
Current Risk Management Assets	$	965.4	$	212.2	$	1.8	$	1,179.4	$	(830.6)	$	348.8
Long-term Risk Management Assets	565.6		148.9		14.3		728.8		(444.7)		284.1
Total Assets	1,531.0		361.1		16.1		1,908.2		(1,275.3)		632.9

Current Risk Management Liabilities	663.8		60.4		41.4		765.6		(620.4)		145.2
Long-term Risk Management Liabilities	412.0		17.4		91.1		520.5		(175.3)		345.2
Total Liabilities	1,075.8		77.8		132.5		1,286.1		(795.7)		490.4

Total MTM Derivative Contract Net Assets (Liabilities)	$	455.2	$	283.3	$	(116.4)	$	622.1	$	(479.6)	$	142.5

AEP Texas


	June 30, 2023
	Risk Management			Gross Amounts Offset			Net Amounts of Assets/Liabilities
	Contracts –		in the Statement of			Presented in the Statement of
Balance Sheet Location	Commodity (a)		Financial Position (b)			Financial Position (c)
	(in millions)
Current Risk Management Assets	$	—		$	—		$	—
Long-term Risk Management Assets	—			—			—
Total Assets	—			—			—

Current Risk Management Liabilities	0.4			(0.4)			—
Long-term Risk Management Liabilities	0.1			(0.1)			—
Total Liabilities	0.5			(0.5)			—

Total MTM Derivative Contract Net Assets (Liabilities)	$	(0.5)		$	0.5		$	—

December 31, 2022

Risk Management

Gross Amounts Offset

Net Amounts of Assets/Liabilities

Contracts –

in the Statement of

Presented in the Statement of

Balance Sheet Location

Commodity (a)

Financial Position (b)

Financial Position (c)

(in millions)

Current Risk Management Assets

—

Long-term Risk Management Assets

—

Total Assets

—

Current Risk Management Liabilities

—

Long-term Risk Management Liabilities

—

Total Liabilities

—

Total MTM Derivative Contract Net Assets

—

APCo


	June 30, 2023


	Risk Management		Gross Amounts Offset		Net Amounts of Assets/Liabilities
	Contracts –		in the Statement of		Presented in the Statement of
Balance Sheet Location	Commodity (a)		Financial Position (b)		Financial Position (c)
	(in millions)
Current Risk Management Assets	$	42.5	$	(3.3)	$	39.2
Long-term Risk Management Assets	0.6		(0.4)		0.2
Total Assets	43.1		(3.7)		39.4

Current Risk Management Liabilities	5.1		(4.0)		1.1
Long-term Risk Management Liabilities	0.4		(0.4)		—
Total Liabilities	5.5		(4.4)		1.1

Total MTM Derivative Contract Net Assets	$	37.6	$	0.7	$	38.3


	December 31, 2022


	Risk Management		Gross Amounts Offset		Net Amounts of Assets/Liabilities
	Contracts –		in the Statement of		Presented in the Statement of
Balance Sheet Location	Commodity (a)		Financial Position (b)		Financial Position (c)
	(in millions)
Current Risk Management Assets	$	69.3	$	(0.2)	$	69.1
Long-term Risk Management Assets	0.7		(0.7)		—
Total Assets	70.0		(0.9)		69.1

Current Risk Management Liabilities	4.1		(0.5)		3.6
Long-term Risk Management Liabilities	0.7		(0.6)		0.1
Total Liabilities	4.8		(1.1)		3.7

Total MTM Derivative Contract Net Assets	$	65.2	$	0.2	$	65.4

I&M


	June 30, 2023
	Risk Management		Gross Amounts Offset		Net Amounts of Assets/Liabilities
	Contracts –		in the Statement of		Presented in the Statement of
Balance Sheet Location	Commodity (a)		Financial Position (b)		Financial Position (c)
	(in millions)
Current Risk Management Assets	$	22.3	$	(0.9)	$	21.4
Long-term Risk Management Assets	11.8		(2.7)		9.1
Total Assets	34.1		(3.6)		30.5

Current Risk Management Liabilities	2.8		(1.4)		1.4
Long-term Risk Management Liabilities	2.7		(2.7)		—
Total Liabilities	5.5		(4.1)		1.4

Total MTM Derivative Contract Net Assets	$	28.6	$	0.5	$	29.1


	December 31, 2022
	Risk Management		Gross Amounts Offset		Net Amounts of Assets/Liabilities
	Contracts –		in the Statement of		Presented in the Statement of
Balance Sheet Location	Commodity (a)		Financial Position (b)		Financial Position (c)
	(in millions)
Current Risk Management Assets	$	16.0	$	(0.8)	$	15.2
Long-term Risk Management Assets	0.5		(0.3)		0.2
Total Assets	16.5		(1.1)		15.4

Current Risk Management Liabilities	0.9		(0.9)		—
Long-term Risk Management Liabilities	0.3		(0.3)		—
Total Liabilities	1.2		(1.2)		—

Total MTM Derivative Contract Net Assets	$	15.3	$	0.1	$	15.4

OPCo


	June 30, 2023
	Risk Management		Gross Amounts Offset		Net Amounts of Assets/Liabilities
	Contracts –		in the Statement of		Presented in the Statement of
Balance Sheet Location	Commodity (a)		Financial Position (b)		Financial Position (c)
	(in millions)
Current Risk Management Assets	$	—	$	—	$	—
Long-term Risk Management Assets	—		—		—
Total Assets	—		—		—

Current Risk Management Liabilities	6.6		(0.3)		6.3
Long-term Risk Management Liabilities	47.8		(0.1)		47.7
Total Liabilities	54.4		(0.4)		54.0

Total MTM Derivative Contract Net Assets (Liabilities)	$	(54.4)	$	0.4	$	(54.0)


	December 31, 2022
	Risk Management		Gross Amounts Offset		Net Amounts of Assets/Liabilities
	Contracts –		in the Statement of		Presented in the Statement of
Balance Sheet Location	Commodity (a)		Financial Position (b)		Financial Position (c)
	(in millions)
Current Risk Management Assets	$	—	$	—	$	—
Long-term Risk Management Assets	—		—		—
Total Assets	—		—		—

Current Risk Management Liabilities	2.1		(0.3)		1.8
Long-term Risk Management Liabilities	37.9		—		37.9
Total Liabilities	40.0		(0.3)		39.7

Total MTM Derivative Contract Net Assets (Liabilities)	$	(40.0)	$	0.3	$	(39.7)

PSO


	June 30, 2023
	Risk Management				Gross Amounts Offset			Net Amounts of Assets/Liabilities
	Contracts –		in the Statement of		Presented in the Statement of
Balance Sheet Location	Commodity (a)			Financial Position (b)			Financial Position (c)
	(in millions)
Current Risk Management Assets	$	47.4			$	(2.6)		$	44.8
Long-term Risk Management Assets	0.2				(0.2)			—
Total Assets	47.6				(2.8)			44.8

Current Risk Management Liabilities	5.4				(2.8)			2.6
Long-term Risk Management Liabilities	1.0				(0.2)			0.8
Total Liabilities	6.4				(3.0)			3.4

Total MTM Derivative Contract Net Assets	$	41.2			$	0.2		$	41.4


	December 31, 2022
	Risk Management Contracts –		Hedging Contracts		Gross Amounts of Risk Management Assets/Liabilities Recognized		Gross Amounts Offset in the Statement of Financial Position (b)		Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c)

Balance Sheet Location	Commodity (a)		Interest Rate (a)
	(in millions)
Current Risk Management Assets	$	24.1	$	1.6	$	25.7	$	(0.4)	$	25.3
Long-term Risk Management Assets	—		—		—		—		—
Total Assets	24.1		1.6		25.7		(0.4)		25.3

Current Risk Management Liabilities	2.1		—		2.1		(0.5)		1.6
Long-term Risk Management Liabilities	—		—		—		—		—
Total Liabilities	2.1		—		2.1		(0.5)		1.6

Total MTM Derivative Contract Net Assets	$	22.0	$	1.6	$	23.6	$	0.1	$	23.7

SWEPCo


	June 30, 2023
	Risk Management		Gross Amounts Offset		Net Amounts of Assets/Liabilities
	Contracts –		in the Statement of		Presented in the Statement of
Balance Sheet Location	Commodity (a)		Financial Position (b)		Financial Position (c)
	(in millions)
Current Risk Management Assets	$	28.5	$	(0.5)	$	28.0
Long-term Risk Management Assets	—		—		—
Total Assets	28.5		(0.5)		28.0

Current Risk Management Liabilities	2.4		(0.8)		1.6
Long-term Risk Management Liabilities	0.2		—		0.2
Total Liabilities	2.6		(0.8)		1.8

Total MTM Derivative Contract Net Assets	$	25.9	$	0.3	$	26.2


	December 31, 2022
	Risk Management		Gross Amounts Offset		Net Amounts of Assets/Liabilities
	Contracts –		in the Statement of		Presented in the Statement of
Balance Sheet Location	Commodity (a)		Financial Position (b)		Financial Position (c)
	(in millions)
Current Risk Management Assets	$	16.8	$	(0.4)	$	16.4
Long-term Risk Management Assets	—		—		—
Total Assets	16.8		(0.4)		16.4

Current Risk Management Liabilities	2.0		(0.6)		1.4
Long-term Risk Management Liabilities	—		—		—
Total Liabilities	2.0		(0.6)		1.4

Total MTM Derivative Contract Net Assets	$	14.8	$	0.2	$	15.0

(a)Derivative instruments within these categories are disclosed as gross. These instruments are subject to master netting agreements and are presented on the balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.”

(b)Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.”

(c)All derivative contracts subject to a master netting arrangement or similar agreement are offset in the statement of financial position.

Amount of Gain (Loss) Recognized on Risk Management Contracts



	Three Months Ended June 30, 2023
Location of Gain (Loss)	AEP		AEP Texas		APCo		I&M		OPCo		PSO		SWEPCo
	(in millions)
Vertically Integrated Utilities Revenues	$	17.0	$	—	$	—	$	—	$	—	$	—	$	—

Generation & Marketing Revenues	(141.8)		—		—		—		—		—		—
Electric Generation, Transmission and Distribution Revenues	—		—		—		17.0		—		—		—


Purchased Electricity, Fuel and Other Consumables Used for Electric Generation	1.3		—		1.3		0.1		—		—		—
Other Operation	(0.1)		—		—		—		—		—		—
Maintenance	(0.3)		(0.1)		—		—		—		—		—
Regulatory Assets (a)	(12.4)		(0.1)		5.9		(1.6)		(12.8)		(2.3)		(0.9)
Regulatory Liabilities (a)	102.0		—		17.4		3.6		—		42.4		33.6
Total Gain (Loss) on Risk Management Contracts	$	(34.3)	$	(0.2)	$	24.6	$	19.1	$	(12.8)	$	40.1	$	32.7



	Three Months Ended June 30, 2022
Location of Gain (Loss)	AEP		AEP Texas		APCo		I&M		OPCo		PSO		SWEPCo
	(in millions)
Vertically Integrated Utilities Revenues	$	0.1	$	—	$	—	$	—	$	—	$	—	$	—

Generation & Marketing Revenues	121.0		—		—		—		—		—		—



Purchased Electricity, Fuel and Other Consumables Used for Electric Generation	0.9		—		0.7		—		—		0.1		—
Other Operation	1.7		0.5		0.2		0.2		0.3		0.2		0.3
Maintenance	2.4		0.7		0.4		0.2		0.4		0.3		0.4
Regulatory Assets (a)	21.4		0.1		0.1		0.3		21.0		—		(0.1)
Regulatory Liabilities (a)	110.4		—		21.6		1.5		1.6		39.0		36.9
Total Gain on Risk Management Contracts	$	257.9	$	1.3	$	23.0	$	2.2	$	23.3	$	39.6	$	37.5


	Six Months Ended June 30, 2023
Location of Gain (Loss)	AEP		AEP Texas		APCo		I&M		OPCo		PSO		SWEPCo
	(in millions)
Vertically Integrated Utilities Revenues	$	11.7	$	—	$	—	$	—	$	—	$	—	$	—

Generation & Marketing Revenues	(289.2)		—		—		—		—		—		—
Electric Generation, Transmission and Distribution Revenues	—		—		—		11.7		—		—		—


Purchased Electricity, Fuel and Other Consumables Used for Electric Generation	2.0		—		1.9		0.1		—		—		—
Other Operation	(0.1)		—		—		—		—		—		—
Maintenance	(0.2)		(0.1)		—		—		—		—		—
Regulatory Assets (a)	(37.2)		(0.5)		(1.2)		(2.1)		(25.1)		(3.5)		(2.4)
Regulatory Liabilities (a)	100.5		—		(8.8)		4.8		—		60.4		45.5
Total Gain (Loss) on Risk Management Contracts	$	(212.5)	$	(0.6)	$	(8.1)	$	14.5	$	(25.1)	$	56.9	$	43.1


	Six Months Ended June 30, 2022
Location of Gain (Loss)	AEP		AEP Texas		APCo		I&M		OPCo		PSO		SWEPCo
	(in millions)
Vertically Integrated Utilities Revenues	$	0.1	$	—	$	—	$	—	$	—	$	—	$	—

Generation & Marketing Revenues	273.3		—		—		—		—		—		—
Electric Generation, Transmission and Distribution Revenues	—		—		0.1		(0.1)		—		—		—


Purchased Electricity, Fuel and Other Consumables Used for Electric Generation	2.4		—		2.1		—		—		0.1		—
Other Operation	2.3		0.7		0.2		0.3		0.4		0.3		0.4
Maintenance	3.2		0.9		0.5		0.3		0.5		0.4		0.5
Regulatory Assets (a)	45.0		0.1		—		(1.3)		44.9		3.6		(2.2)
Regulatory Liabilities (a)	146.9		0.9		20.2		3.2		1.6		51.7		57.8
Total Gain on Risk Management Contracts	$	473.2	$	2.6	$	23.1	$	2.4	$	47.4	$	56.1	$	56.5

(a)Represents realized and unrealized gains and losses subject to regulatory accounting treatment recorded as either current or noncurrent on the balance sheets.

Impact of Fair Value Hedges on the Condensed Balance Sheet


	Carrying Amount of the Hedged Liabilities				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liabilities
	June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022
	(in millions)
Long-term Debt (a) (b)	$	(855.1)	$	(855.5)	$	90.8	$	89.7

(a)Amounts included on the Balance Sheet within Noncurrent Liabilities line item Long-term Debt.

(b)Amounts include $(34) million and $(38) million as of June 30, 2023 and December 31, 2022, respectively, for the fair value hedge adjustment of hedged debt obligations for which hedge accounting has been discontinued.

Gain (Loss) on Hedging Instruments


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in millions)
Gain (Loss) on Interest Rate Contracts:
Fair Value Hedging Instruments (a)	$	(4.2)	$	(17.6)	$	2.7	$	(62.4)
Fair Value Portion of Long-term Debt (a)	4.2		17.6		(2.7)		62.4

(a)Gain (Loss) is included in Interest Expense on the statements of income.

Impact of Cash Flow Hedges on the Condensed Balance Sheet

Impact of Cash Flow Hedges on AEP’s Balance Sheets


	June 30, 2023				December 31, 2022
	Commodity		Interest Rate		Commodity		Interest Rate
	(in millions)
AOCI Gain Net of Tax	$	93.5	$	12.7	$	223.5	$	0.3
Portion Expected to be Reclassed to Net Income During the Next Twelve Months	24.1		4.3		119.9		0.3

Impact of Cash Flow Hedges on the Registrant Subsidiaries’ Balance Sheets


	June 30, 2023				December 31, 2022
	Interest Rate
			Expected to be				Expected to be
			Reclassified to				Reclassified to
			Net Income During				Net Income During
	AOCI Gain (Loss)		the Next		AOCI Gain (Loss)		the Next
Company	Net of Tax		Twelve Months		Net of Tax		Twelve Months
	(in millions)
AEP Texas	$	2.9	$	0.3	$	(0.3)	$	(0.2)
APCo	6.3		0.8		6.7		0.8
I&M	(5.7)		(0.4)		(5.1)		(0.6)

PSO	(0.2)		—		1.3		0.1
SWEPCo	1.4		0.3		1.1		0.2