Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2017

Fair value of assets and liabilities that are measured at fair value on a recurring basis

The following table presents the fair value at December 31, 2017 of our assets and liabilities that are measured at fair value on a recurring basis (dollars in thousands):



	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (a) (Level 3)			Other				Balance at December 31, 2017
Assets
Cash equivalents	$	10,630	$	—		$	—		$	—			$	10,630
Risk management activities — derivative instruments:
Commodity contracts	—		5,683			1,036			(4,737		)	(b)	1,982
Coal reclamation escrow account (c):	455		31,562			—			525				32,542
Nuclear decommissioning trust:
Cash and cash equivalents	7,224		—			—			109			(d)	7,333
U.S. commingled equity funds	—		—			—			417,390			(e)	417,390
Fixed income securities:
U.S. Treasury	127,662		—			—			—				127,662
Corporate debt	—		114,007			—			—				114,007
Mortgage-backed securities	—		111,874			—			—				111,874
Municipal bonds	—		79,049			—			—				79,049
Other	—		13,685			—			—				13,685
Subtotal nuclear decommissioning trust	134,886		318,615			—			417,499				871,000
Total Assets	$	145,971	$	355,860		$	1,036		$	413,287			$	916,154
Liabilities
Risk management activities — derivative instruments:
Commodity contracts	$	—	$	(78,646	)	$	(19,292	)	$	1,516		(b)	$	(96,422	)


(a)	Primarily consists of long-dated electricity contracts.


(b)	Represents counterparty netting, margin, and collateral. See Note 16.


(c)	Represents investments restricted for coal mine reclamation funding related to Four Corners. These assets are included in the Other Assets line item, reported under the Investments and Other Assets section of our Consolidated Balance Sheets. Primarily consists of fixed income municipal bonds.


(d)	Represents nuclear decommissioning trust net pending securities sales and purchases.


(e)	Valued using NAV as a practical expedient and, therefore, are not classified in the fair value hierarchy.

The following table presents the fair value at December 31, 2016 of our assets and liabilities that are measured at fair value on a recurring basis (dollars in thousands):



	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (a) (Level 3)			Other				Balance at December 31, 2016
Assets
Coal reclamation trust (b):	$	14,521	$	—		$	—		$	—			$	14,521
Risk management activities — derivative instruments:
Commodity contracts	—		43,722			11,076			(35,103		)	(c)	19,695
Nuclear decommissioning trust:
U.S. commingled equity funds	—		—			—			353,261			(d)	353,261
Fixed income securities:
Cash and cash equivalent funds	—		—			—			795			(e)	795
U.S. Treasury	95,441		—			—			—				95,441
Corporate debt	—		111,623			—			—				111,623
Mortgage-backed securities	—		115,337			—			—				115,337
Municipal bonds	—		80,997			—			—				80,997
Other	—		22,132			—			—				22,132
Subtotal nuclear decommissioning trust	95,441		330,089			—			354,056				779,586
Total	$	109,962	$	373,811		$	11,076		$	318,953			$	813,802
Liabilities
Risk management activities — derivative instruments:
Commodity contracts	$	—	$	(45,641	)	$	(58,482	)	$	31,049		(c)	$	(73,074	)


(a)	Primarily consists of long-dated electricity contracts.


(b)	Represents investments restricted for coal mine reclamation funding related to Four Corners. These assets are included in the Other Assets line item, reported under the Investments and Other Assets section of our Consolidated Balance Sheets. Primarily consists of cash equivalents. Presented as Coal reclamation escrow in 2017.


(c)	Represents counterparty netting, margin and collateral. See Note 16.


(d)	Valued using NAV as a practical expedient and, therefore, are not classified in the fair value hierarchy.


(e)	Represents nuclear decommissioning trust net pending securities sales and purchases.

Information regarding the entity's internally developed significant unobservable inputs used to value its level 3 instruments

The following tables provide information regarding our significant unobservable inputs used to value our risk management derivative Level 3 instruments at December 31, 2017 and December 31, 2016:



	December 31, 2017 Fair Value (thousands)				Valuation Technique	Significant Unobservable Input	Range	Weighted-Average
Commodity Contracts	Assets		Liabilities		Valuation Technique	Significant Unobservable Input	Range	Weighted-Average
Electricity:
Forward Contracts (a)	$	21	$	15,485	Discounted cash flows	Electricity forward price (per MWh)	$18.51 - $38.75	$	27.89
Natural Gas:
Forward Contracts (a)	1,015		3,807		Discounted cash flows	Natural gas forward price (per MMBtu)	$2.33 - $3.11	$	2.71
Total	$	1,036	$	19,292


(a)	Includes swaps and physical and financial contracts.



	December 31, 2016 Fair Value (thousands)				Valuation Technique	Significant Unobservable Input	Range	Weighted-Average
Commodity Contracts	Assets		Liabilities		Valuation Technique	Significant Unobservable Input	Range	Weighted-Average
Electricity:
Forward Contracts (a)	$	10,648	$	32,042	Discounted cash flows	Electricity forward price (per MWh)	$16.43 - $41.07	$	29.86
Natural Gas:
Forward Contracts (a)	428		26,440		Discounted cash flows	Natural gas forward price (per MMBtu)	$2.32 - $3.60	$	2.81
Total	$	11,076	$	58,482


(a)	Includes swaps and physical and financial contracts.

Changes in fair value for assets and liabilities that are measured at fair value on a recurring basis using Level 3 inputs

The following table shows the changes in fair value for our risk management activities' assets and liabilities that are measured at fair value on a recurring basis using Level 3 inputs for the years ended December 31, 2017 and 2016 (dollars in thousands):



	Year Ended December 31,
Commodity Contracts	2017			2016
Net derivative balance at beginning of period	$	(47,406	)	$	(32,979	)
Total net gains (losses) realized/unrealized:
Included in earnings	—			—
Included in OCI	3			88
Deferred as a regulatory asset or liability	(13,643		)	(37,543		)
Settlements	5,834			15,146
Transfers into Level 3 from Level 2	(10,026		)	1,900
Transfers from Level 3 into Level 2	46,982			5,982
Net derivative balance at end of period	$	(18,256	)	$	(47,406	)
Net unrealized gains included in earnings related to instruments still held at end of period	$	—		$	—