Allegheny Power 2013 Annual Report Download - page 127

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112
FirstEnergy records the fair value of derivative instruments on a gross basis. The following table summarizes the fair value and
classification of derivative instruments on FirstEnergy’s Consolidated Balance Sheets:
Derivative Assets Derivative Liabilities
Fair Value Fair Value
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
(In millions) (In millions)
Current Assets -
Derivatives
Current Liabilities -
Derivatives
Commodity Contracts $ 162 $ 153 Commodity Contracts $ (102) $ (119)
FTRs 4 7 FTRs (9) (7)
166 160 (111) (126)
Noncurrent Liabilities -
Adverse Power Contract
Liability
NUGs (222) (290)
Deferred Charges and
Other Assets - Other LCAAP — (144)
Commodity Contracts 53 99
Noncurrent Liabilities -
Other
FTRs — 1 Commodity Contracts (11) (36)
NUGs 20 36 FTRs (3) (2)
73 136 (236) (472)
Derivative Assets $ 239 $ 296 Derivative Liabilities $ (347) $ (598)
FirstEnergy enters into contracts with counterparties that allow for net settlement of derivative assets and derivative liabilities.
Certain of these contracts contain margining provisions that require the use of collateral to mitigate credit exposure between
FirstEnergy and these counterparties. In situations where collateral is pledged to mitigate exposures related to derivative and non-
derivative instruments with the same counterparty, FirstEnergy allocates the collateral based on the percentage of the net fair value
of derivative instruments to the total fair value of the combined derivative and non-derivative instruments. The following tables
summarize the fair value of derivative instruments on FirstEnergy’s Consolidated Balance Sheets and the effect of netting
arrangements and collateral on its financial position:
Amounts Not Offset in Consolidated
Balance Sheet
December 31, 2013 Fair Value
Derivative
Instruments
Cash Collateral
(Received)/Pledged
Net Fair
Value
(In millions)
Derivative Assets
Commodity contracts $ 215 $ (106) $ (9) $ 100
FTRs 4 (4) — —
NUG contracts 20 — — 20
$ 239 $ (110) $ (9) $ 120
Derivative Liabilities
Commodity contracts $ (113) $ 106 $ 7 $ —
FTRs (12) 4 5 (3)
NUG contracts (222) — — (222)
$ (347) $ 110 $ 12 $ (225)