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Fair Value Measurements, Including Derivatives (Tables)
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Schedule of Quantitative Information About Level 3 Fair Value Measurements

The following table presents DESC’s quantitative information about Level 3 fair value measurements at June 30, 2025. The range and weighted-average are presented in dollars for market price inputs and percentages for price volatility.

 

 

Fair Value
(millions)

 

 

Valuation Techniques

 

Unobservable Input

 

 

Range

 

Weighted-average(1)

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Physical forwards:

 

 

 

 

 

 

 

 

 

 

 

 

Electricity

 

$

202

 

 

Discounted cash flow

 

Market price (per MWh)

(3)

 

28-86

 

49

Physical options:

 

 

 

 

 

 

 

 

 

 

 

 

Natural gas(2)

 

 

68

 

 

Option model

 

Market price (per Dth)

(3)

 

1-9

 

4

 

 

 

 

 

 

 

Price volatility

(4)

 

11%-72%

 

43%

Total assets

 

$

270

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Physical forwards:

 

 

 

 

 

 

 

 

 

 

 

 

Electricity

 

$

5

 

 

Discounted cash flow

 

Market price (per MWh)

(3)

 

28-80

 

51

Total liabilities

 

$

5

 

 

 

 

 

 

 

 

 

 

 

(1)
Averages weighted by volume.
(2)
Includes basis.
(3)
Represents market prices beyond defined terms for Levels 1 and 2.
(4)
Represents volatilities unrepresented in published markets.
Schedule of Sensitivity of The Fair Value Measurements To Changes in The Significant Unobservable Inputs

Sensitivity of the fair value measurements to changes in the significant unobservable inputs is as follows:

 

Significant Unobservable Inputs

 

Position

 

Change to Input

 

Impact on Fair Value Measurement

Market price

 

Buy

 

Increase (decrease)

 

Gain (loss)

Market price

 

Sell

 

Increase (decrease)

 

Loss (gain)

Price volatility

 

Buy

 

Increase (decrease)

 

Gain (loss)

Price volatility

 

Sell

 

Increase (decrease)

 

Loss (gain)

 
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table presents DESC’s assets and liabilities that are measured at fair value on a recurring basis for each hierarchy level, including both current and noncurrent portions:

 

(millions)

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

At June 30, 2025

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

$

—

 

 

$

1

 

 

$

270

 

 

$

271

 

Interest rate

 

 

—

 

 

 

2

 

 

 

—

 

 

 

2

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents and other

 

 

33

 

 

 

—

 

 

 

—

 

 

 

33

 

Total assets

 

$

33

 

 

$

3

 

 

$

270

 

 

$

306

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

$

—

 

 

$

2

 

 

$

5

 

 

$

7

 

Interest rate

 

 

—

 

 

 

1

 

 

 

—

 

 

 

1

 

Total liabilities

 

$

—

 

 

$

3

 

 

$

5

 

 

$

8

 

At December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

$

—

 

 

$

—

 

 

$

370

 

 

$

370

 

Interest rate

 

 

—

 

 

 

2

 

 

 

—

 

 

 

2

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents and other

 

 

29

 

 

 

—

 

 

 

—

 

 

 

29

 

Total assets

 

$

29

 

 

$

2

 

 

$

370

 

 

$

401

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate

 

$

—

 

 

$

1

 

 

$

—

 

 

$

1

 

Total liabilities

 

$

—

 

 

$

1

 

 

$

—

 

 

$

1

 
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis and included in Level 3

The following table presents the net change in DESC’s assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value category.

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

270

 

 

$

253

 

 

$

370

 

 

$

176

 

Total realized and unrealized gains (losses):

 

 

 

 

 

 

 

 

 

 

 

 

Included in earnings:

 

 

 

 

 

 

 

 

 

 

 

 

Purchased power

 

 

2

 

 

 

(1

)

 

 

5

 

 

 

(3

)

Fuel used in electric generation

 

 

(1

)

 

 

—

 

 

 

(1

)

 

 

—

 

Included in regulatory assets/liabilities

 

 

5

 

 

 

32

 

 

 

(84

)

 

 

102

 

Settlements

 

 

(11

)

 

 

(1

)

 

 

(25

)

 

 

1

 

Purchases

 

 

—

 

 

 

—

 

 

 

—

 

 

 

7

 

Ending balance

 

$

265

 

 

$

283

 

 

$

265

 

 

$

283

 
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments For financial instruments that are not recorded at fair value, the carrying amounts and estimated fair values are as follows:

 

 

 

June 30, 2025

 

 

December 31, 2024

 

(millions)

 

Carrying Amount

 

 

Estimated Fair Value(1)

 

 

Carrying Amount

 

 

Estimated Fair Value(1)

 

Long-term debt(2)

 

$

4,666

 

 

$

4,663

 

 

$

4,220

 

 

$

4,142

 

Affiliated long-term debt

 

 

230

 

 

 

230

 

 

 

230

 

 

 

230

 

 

(1)
Fair value is estimated using market prices, where available, and interest rates currently available for issuance of debt with similar terms and remaining maturities. All fair value measurements are classified as Level 2. The carrying amount of debt issuances with short-term maturities and variable rates refinanced at current market rates is a reasonable estimate of their fair value.
(2)
Carrying amount includes current portions, if any, included in securities due within one year and amounts which represent the unamortized debt issuance costs and discount or premium.