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Table of Contents
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table presents the fair value at December 31, 2014 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, 2014
Assets
Risk management activities — derivative
instruments:
Commodity contracts $ —
$ 20,769
$ 32,598
$ (21,962)
(b)
$ 31,405
Nuclear decommissioning trust:
U.S. commingled equity funds —
309,620
—
—
309,620
Fixed income securities:
U.S. Treasury 118,843
—
—
—
118,843
Cash and cash equivalent funds —
11,453
—
(7,245)
(c)
4,208
Corporate debt —
109,379
—
—
109,379
Mortgage-backed securities —
88,465
—
—
88,465
Municipal bonds —
69,139
—
—
69,139
Other —
14,212
—
—
14,212
Subtotal nuclear decommissioning trust 118,843
602,268
—
(7,245)
713,866
Total $ 118,843
$ 623,037
$ 32,598
$ (29,207)
$ 745,271
Liabilities
Risk management activities — derivative
instruments:
Commodity contracts $ —
$ (95,061)
$ (73,984)
$ 58,767
(b)
$ (110,278)
(a) Primarily consists of heat rate options and other long-dated electricity contracts.
(b) Represents counterparty netting, margin and collateral. See Note 16.
(c) Represents nuclear decommissioning trust net pending securities sales and purchases.
Fair Value Measurements Classified as Level 3
The significant unobservable inputs used in the fair value measurement of our energy derivative contracts include broker quotes
that cannot be validated as an observable input primarily due to the long-term nature of the quote and option model inputs. Significant
changes in these inputs in isolation would result in significantly higher or lower fair value measurements. Changes in our derivative
contract fair values, including changes relating to unobservable inputs, typically will not impact net income due to regulatory
accounting treatment (see Note 3).
Because our forward commodity contracts classified as Level 3 are currently in a net purchase position, we would expect price
increases of the underlying commodity to result in increases in the net fair value of the related contracts. Conversely, if the price of the
underlying commodity decreases, the net fair value of the related contracts would likely decrease.
141