Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

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

The following table presents the fair value at September 30, 2018 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 September 30, 2018
Assets
Cash equivalents	$	5,600	$	—		$	—		$	—			$	5,600
Risk management activities — derivative instruments:
Commodity contracts	—		2,865			58			(1,699		)	(b)	1,224
Nuclear decommissioning trust:
Equity securities	6,213		—			—			(625		)	(c)	5,588
U.S. commingled equity funds	—		—			—			459,790			(d)	459,790
U.S. Treasury debt	134,462		—			—			—				134,462
Corporate debt	—		104,953			—			—				104,953
Mortgage-backed debt securities	—		112,036			—			—				112,036
Municipal bonds	—		80,787			—			—				80,787
Other fixed income	—		9,071			—			—				9,071
Subtotal nuclear decommissioning trust	140,675		306,847			—			459,165				906,687
Other special use funds:
Equity securities	12,033		—			—			1,722			(c)	13,755
U.S. Treasury debt	199,094		—			—			—				199,094
Municipal bonds	—		20,891			—			—				20,891
Subtotal other special use funds	211,127		20,891			—			1,722				233,740
Total Assets	$	357,402	$	330,603		$	58		$	459,188			$	1,147,251
Liabilities
Risk management activities — derivative instruments:
Commodity contracts	$	—	$	(69,857	)	$	(9,921	)	$	48		(b)	$	(79,730	)

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

(b) Represents counterparty netting, margin and collateral. See Note 7.

(c) Represents net pending securities sales and purchases.

(d) 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, 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
Nuclear decommissioning trust:
Cash and cash equivalents	7,224		—			—			109			(d)	7,333
U.S. commingled equity funds	—		—			—			417,390			(e)	417,390
U.S. Treasury debt	127,662		—			—			—				127,662
Corporate debt	—		114,007			—			—				114,007
Mortgage-backed debt securities	—		111,874			—			—				111,874
Municipal bonds	—		79,049			—			—				79,049
Other fixed income	—		13,685			—			—				13,685
Subtotal nuclear decommissioning trust	134,886		318,615			—			417,499				871,000
Other special use funds (c):	455		31,562			—			525				32,542
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 7.

(c) Primarily consists of fixed income municipal bonds. Presented as coal reclamation escrow in 2017.

(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.

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 September 30, 2018 and December 31, 2017:

	September 30, 2018 Fair Value (thousands)				Valuation Technique	Significant Unobservable Input		Weighted-Average
Commodity Contracts	Assets		Liabilities				Range
Natural Gas:
Forward Contracts (a)	$	58	$	9,921	Discounted cash flows	Natural gas forward price (per MMBtu)	$1.75 - $2.74	$	2.23
Total	$	58	$	9,921

(a) Includes swaps and physical and financial contracts.

	December 31, 2017 Fair Value (thousands)				Valuation Technique	Significant Unobservable Input		Weighted-Average
Commodity Contracts	Assets		Liabilities				Range
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.

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 three and nine months ended September 30, 2018 and 2017 (dollars in thousands):

	Three Months Ended   September 30,						Nine Months Ended   September 30,
Commodity Contracts	2018			2017			2018			2017
Net derivative balance at beginning of period	$	(9,358	)	$	(36,245	)	$	(18,256	)	$	(47,406	)
Total net gains (losses) realized/unrealized:
Included in OCI	—			(4		)	—			(10		)
Deferred as a regulatory asset or liability	1,244			(3,769		)	(2,067		)	(11,272		)
Settlements	(2,332		)	1,733			(1,056		)	4,855
Transfers into Level 3 from Level 2	(2,246		)	(5,952		)	(7,225		)	(10,340		)
Transfers from Level 3 into Level 2	2,829			5,632			18,741			25,568
Net derivative balance at end of period	$	(9,863	)	$	(38,605	)	$	(9,863	)	$	(38,605	)
Net unrealized gains included in earnings related to instruments still held at end of period	$	—		$	—		$	—		$	—