RISK MANAGEMENT ACTIVITIES

9 Months Ended

Sep. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

RISK MANAGEMENT ACTIVITIES

Risk Management Activities

All of IES's nonhedge derivatives below relate to its retail energy business that was sold on November 1, 2014. See Note 4, Dispositions, for more information.

The following tables show our assets and liabilities from risk management activities:

		September 30, 2014
(Millions)	Balance Sheet Presentation*	Assets from Risk Management Activities		Liabilities from Risk Management Activities
Utility Segments
Nonhedge derivatives
Natural gas contracts	Current	$	7.2	$	3.6
Natural gas contracts	Long-term	0.7		0.7
Financial transmission rights (FTRs)	Current	3.4		0.4
Petroleum product contracts	Current	—		0.6
Coal contracts	Current	—		2.3
Coal contracts	Long-term	2.4		0.1
IES Segment
Nonhedge derivatives
Natural gas contracts	Current	61.1		46.2
Natural gas contracts	Long-term	29.1		16.2
Electric contracts	Current	170.7		112.6
Electric contracts	Long-term	66.3		53.2
	Current	242.4		165.7
	Long-term	98.5		70.2
Total		$	340.9	$	235.9

* We classify assets and liabilities from risk management activities as current or long-term based on the maturities of the underlying contracts.

		December 31, 2013
(Millions)	Balance Sheet Presentation (1)	Assets from Risk Management Activities		Liabilities from Risk Management Activities
Utility Segments
Nonhedge derivatives
Natural gas contracts	Current	$	8.3	$	1.0
Natural gas contracts	Long-term	1.8		0.1
FTRs (2)	Current	2.1		0.3
Petroleum product contracts	Current	0.1		—
Coal contracts	Current	—		1.9
Coal contracts	Long-term	0.2		0.8
IES Segment
Nonhedge derivatives
Natural gas contracts	Current	57.6		42.9
Natural gas contracts	Long-term	29.5		18.6
Electric contracts	Current	172.0		117.7
Electric contracts	Long-term	43.9		43.3
	Current	240.1		163.8
	Long-term	75.4		62.8
Total		$	315.5	$	226.6

⁽¹⁾  We classify assets and liabilities from risk management activities as current or long-term based on the maturities of the underlying contracts.

⁽²⁾   Includes an insignificant risk management asset that was classified as held for sale at UPPCO. See Note 4, Dispositions, for more information.

The following tables show the potential effect on our financial position of netting arrangements for recognized derivative assets and liabilities:

	September 30, 2014
(Millions)	Gross Amount		Potential Effects of Netting, Including Cash Collateral		Net Amount
Derivative assets subject to master netting or similar arrangements
Utility segments	$	11.3	$	4.0	$	7.3
IES segment	326.8		195.5		131.3
Total	338.1		199.5		138.6
Derivative assets not subject to master netting or similar arrangements	2.8				2.8
Total risk management assets	$	340.9			$	141.4
Derivative liabilities subject to master netting or similar arrangements
Utility segments	$	5.3	$	4.4	$	0.9
IES segment	226.8		200.0		26.8
Total	232.1		204.4		27.7
Derivative liabilities not subject to master netting or similar arrangements	3.8				3.8
Total risk management liabilities	$	235.9			$	31.5

	December 31, 2013
(Millions)	Gross Amount		Potential Effects of Netting, Including Cash Collateral		Net Amount
Derivative assets subject to master netting or similar arrangements
Utility segments	$	12.3	$	2.1	$	10.2
IES segment	301.9		178.1		123.8
Total	314.2		180.2		134.0
Derivative assets not subject to master netting or similar arrangements	1.3				1.3
Total risk management assets	$	315.5			$	135.3
Derivative liabilities subject to master netting or similar arrangements
Utility segments	$	1.4	$	1.4	$	—
IES segment	222.1		178.1		44.0
Total	223.5		179.5		44.0
Derivative liabilities not subject to master netting or similar arrangements	3.1				3.1
Total risk management liabilities	$	226.6			$	47.1

Our master netting and similar arrangements have conditional rights of setoff that can be enforced under a variety of situations, including counterparty default or credit rating downgrade below investment grade. We have trade receivables and trade payables, subject to master netting or similar arrangements, that are not included in the above tables. These amounts may offset (or conditionally offset) the net amounts presented in the above tables.

Financial collateral received or provided is restricted to the extent that it is required per the terms of the related agreements. The following table shows our cash collateral positions:

(Millions)	September 30, 2014		December 31, 2013
Cash collateral provided to others: (1)
Related to contracts under master netting or similar arrangements (3)	$	54.3	$	37.6	(2)
Other	1.1		1.1
Cash collateral received from others related to contracts under master netting or similar arrangements (1)	—		0.7

⁽¹⁾   Cash collateral provided to others is reflected in other current assets and cash collateral received from others is reflected in other current liabilities on the balance sheets.

⁽²⁾  Includes an insignificant amount that was classified as held for sale at UPPCO. See Note 4, Dispositions, for more information.

⁽³⁾   Includes $48.6 million and $32.7 million at September 30, 2014, and December 31, 2013, respectively, related to IES's retail energy business, which was sold on November 1, 2014.

Certain of our derivative and nonderivative 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. The following table shows the aggregate fair value of all derivative instruments with specific credit risk-related contingent features that were in a liability position:

(Millions)	September 30, 2014		December 31, 2013
Utility segments	$	3.4	$	0.6
IES segment	58.6		76.7

If all of the credit risk-related contingent features contained in commodity instruments (including derivatives, nonderivatives, normal purchase and normal sales contracts, and applicable payables and receivables) had been triggered, our collateral requirement would have been as follows:

(Millions)	September 30, 2014		December 31, 2013
Collateral that would have been required:
Utility segments	$	0.6	$	—
IES segment	182.9		197.6
Collateral already satisfied:
IES segment — Letters of credit	5.0		4.5
Collateral remaining:
Utility segments	0.6		—
IES segment	177.9		193.1

Utility Segments

Non-Hedge Derivatives

Utility derivatives include natural gas purchase contracts, coal purchase contracts, financial derivative contracts, and FTRs. The electric utility segment uses FTRs to manage electric transmission congestion costs. The natural gas and electric utility segments use financial derivative contracts to manage the risks associated with the market price volatility of natural gas supply costs. In addition, IBS enters into financial derivative contracts on behalf of the utilities to manage the cost of gasoline and diesel fuel used by utility vehicles.

The notional volumes of outstanding derivative contracts at the utilities and IBS were as follows:

	September 30, 2014			December 31, 2013
(Millions)	Purchases	Sales	Other Transactions	Purchases	Sales	Other Transactions
Natural gas (therms)	2,367.1	1.9	N/A	3,124.8	29.3	N/A
FTRs (kilowatt-hours)	N/A	N/A	5,644.0	N/A	N/A	3,633.1
Petroleum products (barrels)	0.1	—	N/A	0.1	—	N/A
Coal (tons)	3.4	—	N/A	4.8	—	N/A

The table below shows the unrealized gains (losses) recorded related to derivative contracts at the utilities and IBS:

		Three Months Ended September 30						Nine Months Ended September 30
(Millions)	Financial Statement Presentation	2014			2013			2014			2013
Natural gas	Balance Sheet — Regulatory assets (current)	$	(3.5	)	$	(0.5	)	$	(3.6	)	$	6.9
Natural gas	Balance Sheet — Regulatory assets (long-term)	(0.4		)	1.8			(0.6		)	1.6
Natural gas	Balance Sheet — Regulatory liabilities (current)	(1.7		)	(0.4		)	(1.7		)	(0.2		)
Natural gas	Balance Sheet — Regulatory liabilities (long-term)	(0.2		)	—			(0.5		)	(0.3		)
Natural gas	Income Statement — Operating and maintenance expense	(0.2		)	(0.1		)	(0.1		)	(0.2		)
FTRs	Balance Sheet — Regulatory assets (current)	0.6			0.8			(0.3		)	—
FTRs	Balance Sheet — Regulatory liabilities (current) *	(0.2		)	(0.2		)	0.9			(0.3		)
Petroleum	Balance Sheet — Regulatory assets (current)	(0.4		)	0.1			(0.4		)	—
Petroleum	Balance Sheet — Regulatory liabilities (current)	(0.1		)	—			(0.1		)	—
Petroleum	Income Statement — Operating and maintenance expense	(0.4		)	(0.2		)	(0.3		)	(0.2		)
Coal	Balance Sheet — Regulatory assets (current)	(0.9		)	(0.6		)	(1.0		)	2.1
Coal	Balance Sheet — Regulatory assets (long-term)	0.1			0.2			0.7			4.2
Coal	Balance Sheet — Regulatory liabilities (current)	—			—			—			(0.3		)
Coal	Balance Sheet — Regulatory liabilities (long-term)	(0.2		)	1.5			2.3			(0.7		)

* Includes insignificant unrealized gains recorded at UPPCO, which was sold in August 2014. See Note 4, Dispositions, for more information.

IES Segment

Nonhedge Derivatives

IES entered into physical and financial derivative contracts to manage commodity price risk primarily associated with retail electric and natural gas customer contracts.

IES had the following notional volumes of outstanding derivative contracts:

	September 30, 2014		December 31, 2013
(Millions)	Purchases	Sales	Purchases	Sales
Commodity contracts
Natural gas (therms)	1,432.3	1,182.5	1,199.9	1,065.4
Electric (kilowatt-hours)	40,987.7	23,657.9	49,186.3	30,813.8

Gains (losses) related to derivative contracts were recognized currently in earnings, as shown in the table below:

		Three Months Ended September 30						Nine Months Ended September 30
(Millions)	Income Statement Presentation	2014			2013			2014			2013
Natural gas	Nonregulated revenue	$	25.9		$	(21.1	)	$	(1.0	)	$	16.1
Natural gas	Nonregulated cost of sales	(20.5		)	25.0			7.5			(9.5		)
Natural gas	Nonregulated revenue (reclassified from accumulated OCI) *	—			—			—			(0.2		)
Electric	Nonregulated revenue	4.1			36.0			180.2			22.4
Electric	Nonregulated cost of sales	—			(6.6		)	2.0			2.1
Electric	Nonregulated revenue (reclassified from accumulated OCI) *	—			(0.2		)	—			(3.2		)
Total		$	9.5		$	33.1		$	188.7		$	27.7

* Represents amounts reclassified from accumulated other comprehensive loss (OCI) related to cash flow hedges that were dedesignated in prior periods.