1.0.0.3 false Derivative Instruments and Risk Management false 1 $ false false USD Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 2 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 0 eme_NotesToFinancialStatementsAbstract eme false na duration string Notes to Financial Statements [Abstract] false false false false false true false false false 1 false false 0 0 false false Notes to Financial Statements [Abstract] false 3 Derivative Instruments and Risk Management 1 us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock us-gaap true na duration string No definition available. false false false false false false false false false 1 false false 0 0 <table style="font-size:10pt; font-family:'Times New Roman',times,serif;"> <tr> <td> Note 3. Derivative Instruments and Risk Management        EME uses derivative instruments to reduce EME's exposure to market risks that arise from fluctuations in prices of electricity, capacity, fuel, emission allowances, and transmission rights. Additionally, EME's financial results can be affected by fluctuations in interest rates. To the extent that EME does not use derivative instruments to hedge these market risks, the unhedged portions will be subject to the risks and benefits of spot market price movements. Hedge transactions are primarily entered into using derivative instruments including: <dl compact="compact"> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"></dt> <dd style="FONT-FAMILY: times">futures contracts cleared on the Intercontinental Trading Exchange and the New York Mercantile Exchange or executed bilaterally with counterparties, </dd> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"></dt> <dd style="FONT-FAMILY: times">forward sales transactions entered into on a bilateral basis with third parties, including electric utilities, power marketing companies and financial institutions, </dd> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"></dt> <dd style="FONT-FAMILY: times">full requirements services contracts or load requirements services contracts for the procurement of power for electric utilities' customers, with such services providing for the delivery of a bundled product including, but not limited to, energy, transmission, capacity, and ancillary services, generally for a fixed unit price, </dd> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"></dt> <dd style="FONT-FAMILY: times">capacity transactions, and </dd> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"></dt> <dd style="FONT-FAMILY: times">interest rate swaps entered into on a bilateral basis with counterparties. </dd></dl>        The extent to which EME hedges its market price risk depends on several factors. First, EME evaluates over-the-counter market prices to determine if forward market prices are sufficiently attractive compared to the risks associated with the fluctuating spot market. Second, EME evaluates the sufficiency of its credit capacity at EME and Midwest Generation and whether the forward sales markets have sufficient liquidity to enable EME to identify appropriate counterparties for hedge transactions.        Many of the derivative instruments entered into for risk management purposes (also referred to as non-trading purposes) meet the requirements for hedge accounting. However, not all derivative instruments entered into for risk management purposes will qualify for hedge accounting treatment. Furthermore, EME utilizes derivative contracts to adjust financial and/or physical positions that reduce costs or increase gross margin. Accordingly, risk management positions may not be designated as cash flow hedges and are thus marked to market through current period earnings (derivatives that are entered into for risk management, but which are not designated as cash flow hedges, are referred to as economic hedges).        Authoritative guidance on derivatives and hedging affects the timing of income recognition, but has no effect on cash flow. To the extent that income varies from accrual accounting (i.e., revenue recognition based on the settlement of transactions), EME records unrealized gains or losses. EME classifies unrealized gains and losses from commodity contracts in operating revenues or fuel expenses based on the item being hedged. In addition, the results of derivative activities are recorded in cash flows from operating activities in the consolidated statements of cash flows.        Derivative instruments that are utilized for trading purposes are measured at fair value and included in the balance sheet as derivative assets or liabilities. In the absence of quoted market prices, derivative instruments are valued at fair value as determined through the methodology outlined in Note 2Fair Value Measurements. Resulting gains and losses are recognized in operating revenues in the accompanying consolidated statements of income in the period of change.        Where EME's derivative instruments are subject to a master netting agreement and the criteria of authoritative guidance are met, EME presents its derivative assets and liabilities on a net basis on its consolidated balance sheet. Notional Volumes of Derivative Instruments        The following table summarizes the notional volumes of derivatives used for hedging and trading activities at December 31, 2009: <div style="PADDING-RIGHT: 0pt; PADDING-LEFT: 0pt; PADDING-BOTTOM: 0pt; MARGIN-LEFT: 10%; WIDTH: 54%; PADDING-TOP: 0pt; POSITION: relative">   <div align="center"> <table cellspacing="0" cellpadding="0" width="150%" border="0"> <tr style="HEIGHT: 0px"> <td style="FONT-FAMILY: times" align="left" width="67"></td> <td style="FONT-FAMILY: times" width="3%"></td> <td style="FONT-FAMILY: times" align="left" width="100"></td> <td style="FONT-FAMILY: times" width="3%"></td> <td style="FONT-FAMILY: times" align="left" width="69"></td> <td style="FONT-FAMILY: times" width="3%"></td> <td style="FONT-FAMILY: times" align="left" width="83"></td> <td style="FONT-FAMILY: times" width="3%"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="56"></td> <td style="FONT-FAMILY: times" width="3%"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="53"></td> <td style="FONT-FAMILY: times" width="3%"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="49"></td> <td style="FONT-FAMILY: times" width="12"></td></tr> <tr style="HEIGHT: 0px" valign="bottom"> <th style="FONT-FAMILY: times" align="left">  </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" align="left">  </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" align="left">  </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" align="left">  </th> <th style="FONT-FAMILY: times"> </th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align="center" colspan="5">Hedging Activities </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" align="left" colspan="2">  </th> <th style="FONT-FAMILY: times"> </th></tr> <tr style="HEIGHT: 0px" valign="bottom"> <th style="FONT-FAMILY: times" align="left">Commodity </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" align="center">Instrument </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" align="center">Classification </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" align="center">Unit of Measure </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" align="center" colspan="2">Cash Flow Hedges </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" align="center" colspan="2">Economic Hedges </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" align="center" colspan="2">Trading Activities </th> <th style="FONT-FAMILY: times"> </th></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="bottom"> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align="center" colspan="16"> </th> <th style="FONT-FAMILY: times"> </th></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times"> Electricity</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">Forwards/Futures</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">Sales</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">GWh</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">24,355</td> <td style="FONT-FAMILY: times">1</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">26,838</td> <td style="FONT-FAMILY: times">3</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">23,306</td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times"> Electricity</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">Forwards/Futures</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">Purchases</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">GWh</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">106</td> <td style="FONT-FAMILY: times">1</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">25,971</td> <td style="FONT-FAMILY: times">3</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">23,404</td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times"> Electricity</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">Capacity</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">Sales</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">MW-Day (in thousands)</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">254</td> <td style="FONT-FAMILY: times">2</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">1</td> <td style="FONT-FAMILY: times">2</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">597</td> <td style="FONT-FAMILY: times">2</td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times"> Electricity</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">Capacity</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">Purchases</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">MW-Day (in thousands)</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">11</td> <td style="FONT-FAMILY: times">2</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">2</td> <td style="FONT-FAMILY: times">2</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">736</td> <td style="FONT-FAMILY: times">2</td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times"> Electricity</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">Congestion</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">Sales</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">GWh</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right"></td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">136</td> <td style="FONT-FAMILY: times">4</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">10,212</td> <td style="FONT-FAMILY: times">4</td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times"> Electricity</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">Congestion</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">Purchases</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">GWh</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right"></td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">1,576</td> <td style="FONT-FAMILY: times">4</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">181,930</td> <td style="FONT-FAMILY: times">4</td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times"> Natural gas</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">Forwards/Futures</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">Sales</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">billion cubic feet</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right"></td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">3.3</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">30.8</td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times"> Natural gas</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">Forwards/Futures</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">Purchases</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">billion cubic feet</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right"></td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right"></td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">30.6</td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times"> Fuel oil</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">Forwards/Futures</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">Sales</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">Barrels</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right"></td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">250,000</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">120,000</td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times"> Fuel oil</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">Forwards/Futures</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">Purchases</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">Barrels</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right"></td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">625,000</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">120,000</td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="top"> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" colspan="16"> </td> <td style="FONT-FAMILY: times"> </td></tr></table></div> </div> <dl compact="compact"> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times">1</dt> <dd style="FONT-FAMILY: times">EME's hedge products include forward and futures contracts that qualify for hedge accounting. This category excludes power contracts for the Midwest Generation plants which meet the normal sales and purchase exception and are accounted for on the accrual method. </dd> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times">2</dt> <dd style="FONT-FAMILY: times">EME's hedge transactions for capacity result from bilateral trades. Capacity sold in the PJM RPM auction is not accounted for as a derivative. </dd> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times">3</dt> <dd style="FONT-FAMILY: times">EME also entered into transactions that adjust financial and physical positions, or day-ahead and real-time positions to reduce costs or increase gross margin. These positions largely offset each other. The net sales positions of these categories are primarily related to hedge transactions that are not designated as cash flow hedges. </dd> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times">4</dt> <dd style="FONT-FAMILY: times">Congestion contracts include financial transmission rights, transmission congestion contracts or congestion revenue rights. These positions are similar to a swap, where the buyer is entitled to receive a stream of revenues (or charges) based on the hourly day-ahead price differences between two locations. </dd></dl>        Included in trading activities in the preceding table, EME shows net the volume of energy trading activities that are physically settled. Gross purchases and sales totaled 3,791 GWh, 4,080 GWh and 4,130 GWh during 2009, 2008 and 2007, respectively. Interest Rate Swaps        Viento Funding II, Inc., an EME subsidiary, in conjunction with its wind financing, entered into seven-year amortizing interest rate swaps accounted for as cash flow hedges with a total notional amount of approximately $160 million at December 31, 2009. The interest rate swaps entitle Viento Funding II to receive a floating (six-month LIBOR) rate and pay a fixed rate of 3.175%. The interest rate swap agreements expire in June 2016. Fair Value of Derivative Instruments        The following table summarizes the gross fair value of derivative instruments at December 31, 2009: <div style="PADDING-RIGHT: 0pt; PADDING-LEFT: 0pt; PADDING-BOTTOM: 0pt; MARGIN-LEFT: 10%; WIDTH: 54%; PADDING-TOP: 0pt; POSITION: relative">   <div align="center"> <table cellspacing="0" cellpadding="0" width="150%" border="0"> <tr style="HEIGHT: 0px"> <td style="FONT-FAMILY: times" align="left" width="10"></td> <td style="FONT-FAMILY: times" align="left"></td> <td style="FONT-FAMILY: times" width="12"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="58"></td> <td style="FONT-FAMILY: times" width="12"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="56"></td> <td style="FONT-FAMILY: times" width="12"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="45"></td> <td style="FONT-FAMILY: times" width="12"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="58"></td> <td style="FONT-FAMILY: times" width="12"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="56"></td> <td style="FONT-FAMILY: times" width="12"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="45"></td> <td style="FONT-FAMILY: times" width="12"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="58"></td> <td style="FONT-FAMILY: times" width="12"></td></tr> <tr style="HEIGHT: 0px" valign="bottom"> <th style="FONT-FAMILY: times" align="left" colspan="2">  </th> <th style="FONT-FAMILY: times" rowspan="2"> </th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align="center" colspan="8" rowspan="2">Derivative Assets </th> <th style="FONT-FAMILY: times" rowspan="2"> </th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align="center" colspan="8" rowspan="2">Derivative Liabilities </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" align="left" colspan="2">  </th> <th style="FONT-FAMILY: times"> </th></tr> <tr style="HEIGHT: 0px" valign="bottom"> <th style="FONT-FAMILY: times" align="left" colspan="2">  </th> <th style="FONT-FAMILY: times" rowspan="2"> </th> <th style="FONT-FAMILY: times" align="center" colspan="2" rowspan="2">Net Assets </th> <th style="FONT-FAMILY: times"> </th></tr> <tr style="HEIGHT: 0px" valign="bottom"> <th style="FONT-FAMILY: times" align="left" colspan="2">(in millions) </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" align="center" colspan="2">Short-term </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" align="center" colspan="2">Long-term </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" align="center" colspan="2">Subtotal </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" align="center" colspan="2">Short-term </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" align="center" colspan="2">Long-term </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" align="center" colspan="2">Subtotal </th> <th style="FONT-FAMILY: times"> </th></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="bottom"> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align="center" colspan="23"> </th> <th style="FONT-FAMILY: times"> </th></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" colspan="2"> Non-trading activities</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="white"> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> Cash flow hedges</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">240</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">17</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">257</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">69</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">6</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">75</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">182</td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> Economic hedges</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">202</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">8</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">210</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">180</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right"></td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">180</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">30</td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="white"> <td style="FONT-FAMILY: times" colspan="2"> Trading activities</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">234</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">111</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">345</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">182</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">41</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">223</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">122</td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="top"> <td style="FONT-FAMILY: times" valign="bottom" colspan="2"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" valign="bottom" align="right" colspan="20"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" colspan="2">  </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">676</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">136</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">812</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">431</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">47</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">478</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">334</td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="white"> <td style="FONT-FAMILY: times" colspan="2"> Netting and collateral received</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">(479</td> <td style="FONT-FAMILY: times">)</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">(55</td> <td style="FONT-FAMILY: times">)</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">(534</td> <td style="FONT-FAMILY: times">)</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">(426</td> <td style="FONT-FAMILY: times">)</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">(32</td> <td style="FONT-FAMILY: times">)</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">(458</td> <td style="FONT-FAMILY: times">)</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">(76</td> <td style="FONT-FAMILY: times">)</td></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="top"> <td style="FONT-FAMILY: times" valign="bottom" colspan="2"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" valign="bottom" align="right" colspan="20"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" colspan="2"> Total</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">197</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">81</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">278</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">5</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">15</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">20</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">258</td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="top"> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" valign="bottom" colspan="23"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr></table></div> </div> Income Statement Impact of Derivative Instruments        The following table provides the activity of accumulated other comprehensive income for the year ended December 31, 2009, containing the information about the changes in the fair value of cash flow hedges and reclassification from accumulated other comprehensive income into results of operations: <div style="PADDING-RIGHT: 0pt; PADDING-LEFT: 0pt; PADDING-BOTTOM: 0pt; MARGIN-LEFT: 20%; WIDTH: 60%; PADDING-TOP: 0pt; POSITION: relative">   <div align="center"> <table cellspacing="0" cellpadding="0" width="100%" border="0"> <tr style="HEIGHT: 0px"> <td style="FONT-FAMILY: times" align="left"></td> <td style="FONT-FAMILY: times" width="12"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="83"></td> <td style="FONT-FAMILY: times" width="12"></td> <td style="FONT-FAMILY: times" align="left" width="112"></td></tr> <tr style="HEIGHT: 0px" valign="bottom"> <th style="FONT-FAMILY: times" align="left">(in millions) </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" align="center" colspan="2">Cash Flow Hedge Activity1 </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" align="center">Income Statement Location </th></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="bottom"> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align="center" colspan="6"> </th></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times"> Accumulated other comprehensive income derivative gain at December 31, 2008</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">398</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="white"> <td style="FONT-FAMILY: times"> Effective portion of changes in fair value</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">79</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times"> Reclassification from accumulated other comprehensive income to net income</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">(302</td> <td style="FONT-FAMILY: times">)</td> <td style="FONT-FAMILY: times">Operating revenues</td></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="top"> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" valign="bottom" align="right" colspan="2"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="white"> <td style="FONT-FAMILY: times"> Accumulated other comprehensive income derivative gain at December 31, 2009</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right">$</td> <td style="FONT-FAMILY: times" align="right">175</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="top"> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" valign="bottom" colspan="6"> </td></tr></table></div> </div> <div style="PADDING-RIGHT: 0pt; PADDING-LEFT: 0pt; PADDING-BOTTOM: 0pt; MARGIN-LEFT: 20%; PADDING-TOP: 0pt; POSITION: relative; TEXT-ALIGN: left"> <dl compact="compact"> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times">1</dt> <dd style="FONT-FAMILY: times">Unrealized derivative gains are before income taxes. The after-tax amounts recorded in accumulated other comprehensive income at December 31, 2009 and December 31, 2008 were $105 million and $240 million, respectively. </dd></dl></div>        The portion of a cash flow hedge that does not offset the change in the value of the transaction being hedged, which is commonly referred to as the ineffective portion, is immediately recognized in earnings. EME recorded net gains (losses) of $24 million, $7 million and $(41) million in 2009, 2008 and 2007, respectively, representing the amount of cash flow hedge ineffectiveness and are reflected in operating revenues on the consolidated statements of income.        The effect of realized and unrealized gains (losses) from derivative instruments used for economic hedging and trading purposes on the consolidated statements of income for the year ended December 31, 2009 is presented below: <div style="PADDING-RIGHT: 0pt; PADDING-LEFT: 0pt; PADDING-BOTTOM: 0pt; MARGIN-LEFT: 20%; WIDTH: 60%; PADDING-TOP: 0pt; POSITION: relative">   <div align="center"> <table cellspacing="0" cellpadding="0" width="100%" border="0"> <tr style="HEIGHT: 0px"> <td style="FONT-FAMILY: times" align="left"></td> <td style="FONT-FAMILY: times" width="12"></td> <td style="FONT-FAMILY: times" align="left" width="143"></td> <td style="FONT-FAMILY: times" width="60"></td> <td style="FONT-FAMILY: times" align="right" width="7"></td> <td style="FONT-FAMILY: times" width="73"></td> <td style="FONT-FAMILY: times" width="12"></td></tr> <tr style="HEIGHT: 0px" valign="bottom"> <th style="FONT-FAMILY: times" align="left">(in millions) </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" align="left">Income Statement Location </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" align="center" colspan="2">December 31, 2009 </th> <th style="FONT-FAMILY: times"> </th></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="bottom"> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align="center" colspan="6"> </th> <th style="FONT-FAMILY: times"> </th></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" valign="bottom"> Economic hedges</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom">Operating revenue</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">$</td> <td style="FONT-FAMILY: times" valign="bottom" align="right">34</td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times" valign="bottom">  </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom">Fuel expense</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right">18</td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times" valign="bottom"> Trading activities</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> Operating revenue</td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td> <td style="FONT-FAMILY: times" valign="bottom" align="right"> 47</td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="top"> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" valign="bottom" colspan="6"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr></table></div> </div> Contingent Features/Credit Related Exposure        Certain derivative instruments contain margin and collateral deposit requirements. Since EME's credit ratings are below investment grade, EME has historically provided collateral in the form of cash and letters of credit for the benefit of counterparties related to the net of accounts payable, accounts receivable, unrealized losses and unrealized gains in connection with derivative activities. Certain derivative contracts do not require margin, but contain provisions that require EME or Midwest Generation to comply with the terms and conditions of their respective credit facilities. The credit facilities each contain financial covenants. Some hedge contracts include provisions related to a change in control or material adverse effect resulting from amendments or modifications to the related credit facility. Failure by EME or Midwest Generation to comply with these provisions may result in a termination event under the hedge contracts, enabling the counterparties to terminate and liquidate all outstanding transactions and demand immediate payment of amounts owed to them. EMMT also has hedge contracts that do not require margin, but provide that each party can request additional credit support in the form of adequate assurance of performance in the case of an adverse development affecting the other party. The aggregate fair value of all derivative instruments with credit-risk-related contingent features is in an asset position on December 31, 2009 and, accordingly, the contingent features described above do not currently have a liquidity exposure. Future increases in power prices could expose EME or Midwest Generation to termination payments or additional collateral postings under the contingent features described above. Margin and Collateral Deposits        Margin and collateral deposits include cash deposited with counterparties and brokers as credit support under energy contracts. The amount of margin and collateral deposits generally varies based on changes in fair value of the related positions. EME presents a portion of its margin and cash collateral deposits net with its derivative positions on EME's consolidated balance sheets. Cash collateral provided to others offset against derivative liabilities totaled $49 million and $51 million at December 31, 2009 and 2008, respectively. Cash collateral received from others offset against derivative assets totaled $124 million and $225 million at December 31, 2009 and 2008, respectively. Commodity Price Risk Management        EME's merchant operations create exposure to commodity price risk, which reflects the potential impact of a change in the market value of a particular commodity. Commodity price risks are actively monitored, with oversight provided by a risk management committee, to ensure compliance with EME's risk management policies. Policies are in place which define risk management processes, and procedures exist which allow for monitoring of all commitments and positions with regular reviews by EME's risk management committee. EME uses estimates of the variability in gross margin to help identify, measure, monitor and control its overall market risk exposure and earnings volatility with respect to hedge positions at the fossil-fueled facilities and the merchant wind projects, and uses "value at risk" metrics to help identify, measure, monitor and control its overall risk exposure in respect to its trading positions. These measures allow management to aggregate overall commodity risk, compare risk on a consistent basis and identify changes in risk factors. Value at risk measures the possible loss, and variability in gross margin measures the potential change in value, of an asset or position, in each case over a given time interval, under normal market conditions, at a given confidence level. Given the inherent limitations of these measures and reliance on a single type of risk measurement tool, EME supplements these approaches with the use of stress testing and worst-case scenario analysis for key risk factors, as well as stop-loss triggers volumetric exposure limits. In order to provide more predictable earnings and cash flow, EME may hedge a portion of the electric output of its merchant plants. When appropriate, EME manages the spread between the electric prices and fuel prices, and uses forward contracts, swaps, futures, or options contracts to achieve those objectives. Interest Rate Risk Management        Interest rate changes affect the cost of capital needed to operate EME's projects. EME mitigates the risk of interest rate fluctuations by arranging for fixed rate financing or variable rate financing with interest rate swaps, interest rate options or other hedging mechanisms for a number of EME's project financings. Credit Risk        In conducting EME's hedging and trading activities, EME enters into transactions with utilities, energy companies, financial institutions, and other companies, collectively referred to as counterparties. In the event a counterparty were to default on its trade obligation, EME would be exposed to the risk of possible loss associated with market price changes occurring since the original contract was executed if the nonperforming counterparty were unable to pay the resulting damages owed to EME. Further, EME would be exposed to the risk of non-payment of accounts receivable accrued for products delivered prior to the time a counterparty defaulted.        To manage credit risk, EME evaluates the risk of potential defaults by counterparties. Credit risk is measured as the loss that EME would expect to incur if a counterparty failed to perform pursuant to the terms of its contractual obligations. EME measures, monitors and mitigates credit risk to the extent possible. To mitigate credit risk from counterparties, master netting agreements are used whenever possible and counterparties may be required to pledge collateral when deemed necessary. EME also takes other appropriate steps to limit or lower credit exposure.        EME has established processes to determine and monitor the creditworthiness of counterparties. EME manages the credit risk of its counterparties based on credit ratings using published ratings of counterparties and other publicly disclosed information, such as financial statements, regulatory filings, and press releases, to guide it in the process of setting credit levels, risk limits and contractual arrangements, including master netting agreements. A risk management committee regularly reviews the credit quality of EME's counterparties.        The majority of EME's consolidated wind projects and unconsolidated affiliates that own power plants sell power under power purchase agreements. Generally, each project or plant sells its output to one counterparty. A default by the counterparty, including a default as a result of a bankruptcy, would likely have a material adverse effect on the operations of the project or plant.        Coal for the fossil-fueled facilities is purchased from suppliers under contracts which may be for multiple years. A number of the coal suppliers to the fossil-fueled facilities do not currently have an investment grade credit rating and, accordingly, EME may have limited recourse to collect damages in the event of default by a supplier. EME seeks to mitigate this risk through diversification of its coal suppliers and through guarantees and other collateral arrangements when available.        The fossil-fueled facilities sell electric power generally into the PJM market by participating in PJM's capacity and energy markets or transact in capacity and energy on a bilateral basis. Sales into PJM accounted for approximately 48%, 50% and 51% of EME's consolidated operating revenues for the years ended December 31, 2009, 2008 and 2007, respectively. Moody's rates PJM's debt Aa3. PJM, an ISO with over 300 member companies, maintains its own credit risk policies and does not extend unsecured credit to non-investment grade companies. Losses resulting from a PJM member default are shared by all other members using a predetermined formula. At December 31, 2009 and 2008, EME's account receivable due from PJM was $50 million and $61 million, respectively.        For the years ended December 31, 2009 and 2008, a second customer, Constellation Energy Commodities Group, Inc. accounted for 16% and 10%, respectively, of EME's consolidated operating revenues. Sales to Constellation are primarily generated from the fossil-fueled facilities and consist of energy sales under forward contracts. The contract with Constellation is guaranteed by Constellation Energy Group, Inc., which has a senior unsecured debt rating of BBB- by S&P and Baa3 by Moody's. At December 31, 2009 and 2008, EME's account receivable due from Constellation was $36 million and $22 million, respectively.        For the years ended December 31, 2008 and 2007, EME also derived a significant source of its revenues from the sale of energy, capacity and ancillary services generated at the Midwest Generation plants to Commonwealth Edison under load requirements services contracts. By May 2009, all these contracts had expired. Sales under these contracts accounted for 12% and 19% of EME's consolidated operating revenues for the years ended December 31, 2008 and 2007, respectively.        The terms of EME's wind turbine supply agreements contain significant obligations of the suppliers in the form of manufacturing and delivery of turbines and payments, for delays in delivery and for failure to meet performance obligations and warranty agreements. EME's reliance on these contractual provisions is subject to credit risks. Generally, these are unsecured obligations of the turbine manufacturer. A material adverse development with respect to EME's turbine suppliers may have a material impact on EME's wind projects and development efforts. </td></tr></table> Note 3. Derivative Instruments and Risk Management        EME uses derivative instruments to reduce EME's exposure to false false No definition available. No authoritative reference available. false false 1 2 false UnKnown UnKnown UnKnown false true