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Derivative Instruments
 12 Months Ended
Dec. 31, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS

None of our derivatives are designated as hedging instruments, with the exception of our interest rate swaps, which have been designated as cash flow hedges. The following table shows our derivative assets and derivative liabilities:
 
 
December 31, 2018
 
December 31, 2017
(in millions)
 
Derivative Assets
 
Derivative Liabilities
 
Derivative Assets
 
Derivative Liabilities
Other current
 
 
 
 
 
 
 
 
   Natural gas contracts
 
$
7.7

 
$
5.3

 
$
5.6

 
$
9.4

   Petroleum products contracts
 
—

 
—

 
1.2

 
—

   FTRs
 
7.4

 
—

 
4.4

 
—

   Coal contracts
 
0.2

 
0.1

 
0.6

 
0.6

Interest rate swaps
 
—

 
0.4

 
—

 
—

   Total other current
 
$
15.3

 
$
5.8

 
$
11.8

 
$
10.0

 
 
 
 
 
 
 
 
 
Other long-term
 
 
 
 
 
 
 
 
   Natural gas contracts
 
$
0.4

 
$
0.2

 
$
0.1

 
$
1.4

   Coal contracts
 
0.2

 
—

 
0.5

 
0.2

Interest rate swaps
 
—

 
1.9

 
—

 
—

   Total other long-term
 
$
0.6

 
$
2.1

 
$
0.6

 
$
1.6

Total
 
$
15.9

 
$
7.9

 
$
12.4

 
$
11.6



Realized gains (losses) on derivatives not designated as hedging instruments are primarily recorded in cost of sales on the income statements. Our estimated notional sales volumes and realized gains (losses) were as follows for the years ended:
 
 
December 31, 2018
 
December 31, 2017
 
December 31, 2016
(in millions)
 
Volume
 
Gains
 
Volume
 
Gains (Losses)
 
Volume
 
Gains (losses)
Natural gas contracts
 
173.2 Dth
 
$
24.6

 
123.1 Dth
 
$
(8.0
)
 
151.1 Dth
 
$
(59.6
)
Petroleum products contracts
 
6.0 gallons
 
1.6

 
18.0 gallons
 
(1.3
)
 
14.7 gallons
 
(3.2
)
FTRs
 
30.5 MWh
 
15.9

 
36.2 MWh
 
14.0

 
33.7 MWh
 
13.3

Total
 
 
 
$
42.1

 
 
 
$
4.7

 
 
 
$
(49.5
)


The following table shows derivative assets and derivative liabilities if derivative instruments by counterparty were presented net on our balance sheets:
 
 
December 31, 2018
 
December 31, 2017
 
(in millions)
 
Derivative Assets
 
Derivative Liabilities
 
Derivative Assets
 
Derivative Liabilities
 
Gross amount recognized on the balance sheet
 
$
15.9

 
$
7.9

 
$
12.4

 
$
11.6

 
Gross amount not offset on the balance sheet
 
(4.0
)
(1) 
(4.9
)
(2) 
(4.9
)
 
(9.0
)
(3) 
Net amount
 
$
11.9

 
$
3.0

 
$
7.5

 
$
2.6

 

(1) 
Includes cash collateral received of $0.2 million.

(2)
Includes cash collateral posted of $1.1 million.

(3) 
Includes cash collateral posted of $4.1 million.

At December 31, 2018 and 2017, we had posted cash collateral of $2.7 million and $16.2 million, respectively, in our margin accounts. At December 31, 2018, we had also received cash collateral of $0.2 million in our margin accounts. Certain of our derivative and non-derivative commodity instruments contain provisions that could require "adequate assurance" in the event of a material change in our creditworthiness, or the posting of additional collateral for instruments in net liability positions, if triggered by a decrease in credit ratings. We did not have any derivative instruments with specific credit risk-related contingent features that were in a net liability position at December 31, 2018. The aggregate fair value of all derivative instruments with these features that were in a net liability position at December 31, 2017 was $3.7 million. At December 31, 2017, we had not posted any cash collateral related to the credit risk-related contingent features of these commodity instruments. If all of the credit risk-related contingent features contained in derivative instruments in a net liability position had been triggered at December 31, 2017, we would have been required to post collateral of $2.7 million.

Cash Flow Hedges

In July 2018, we executed two interest rate swap agreements with a combined notional value of $250.0 million to hedge the variable interest rate risk associated with our 2007 Junior Notes. The swap agreements will provide a fixed interest rate of 4.9765% on $250.0 million of the $500.0 million of outstanding 2007 Junior Notes through November 15, 2021. As these agreements qualified for cash flow hedge accounting treatment, the related gains and losses are being deferred in accumulated other comprehensive income (OCI) and are being amortized to interest expense as interest is accrued on the 2007 Junior Notes.

During 2015, we settled several forward interest rate swap agreements entered into to mitigate interest rate risk associated with the issuance of $1.2 billion of long-term debt related to the acquisition of Integrys. As these agreements qualified for cash flow hedge accounting treatment, the proceeds of $19.0 million received upon settlement were deferred in accumulated OCI and are being amortized as a decrease to interest expense over the periods in which the interest costs are recognized in earnings.

The table below shows the amounts related to these cash flow hedges recorded in OCI and in earnings at December 31:
(in millions)
 
2018
 
2017
 
2016
Amount of net derivative loss recognized in OCI
 
$
(2.9
)
 
$
—

 
$
—

Amount of net derivative gain reclassified from accumulated OCI to interest expense
 
1.6

 
2.2

 
2.2



We estimate that during the next twelve months, $1.8 million will be reclassified from accumulated OCI as a reduction to interest expense.

Effective January 1, 2019, we adopted ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities. The amendments in this update expand the strategies that qualify for hedge accounting, amend the presentation and disclosure requirements related to hedging activities, and provide overall targeted improvements to simplify hedge accounting in certain situations. The adoption of this standard is not expected to have a material impact on our financial statements.