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93
PART II
ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
At December 31, 2014, the Utility’s outstanding derivative balances were as follows:
CommodityRisk
(inmillions)
GrossDerivative
Balance Netting CashCollateral
TotalDerivative
Balance
Currentassets–other   ()  
Othernoncurrentassets–other  () - 
Currentliabilities–other ()  ()
Noncurrentliabilities–other ()  ()
Totalcommodityrisk  -   
Gains and losses associated with price risk management activities were recorded as follows:
CommodityRisk
FortheyearendedDecember
(inmillions)
  
Unrealizedgain(loss)-regulatoryassetsandliabilities() ()   
Realizedloss-costofelectricity() () () ()
Realizedloss-costofnaturalgas() () () ()
Totalcommodityrisk
()   
() Unrealizedgainsandlossesoncommodityrisk-relatedderivativeinstrumentsarerecordedtoregulatoryliabilitiesorassets
respectivelyratherthanbeingrecordedtotheConsolidatedStatementsofIncomeTheseamountsexcludetheimpactof
cashcollateralpostings
() TheseamountsarefullypassedthroughtocustomersinratesAccordinglynetincomewasnotimpactedbyrealized
amountsontheseinstruments
Cash inflows and outflows associated with derivatives
are included in operating cash flows on the Utility’s
Consolidated Statements of Cash Flows.
The majority of the Utility’s derivatives contain collateral
posting provisions tied to the Utility’s credit rating from
each of the major credit rating agencies. At December
31, 2015, the Utility’s credit rating was investment grade.
If the Utility’s credit rating were to fall below investment
grade, the Utility would be required to post additional
cash immediately to fully collateralize some of its net
liability derivative positions.
The additional cash collateral that the Utility would be
required to post if the credit risk-related contingency
features were triggered was as follows:
BalanceatDecember
(inmillions)
 
Derivativesinaliabilitypositionwithcreditrisk-relatedcontingenciesthatarenotfully
collateralized  () ()
Relatedderivativesinanassetposition - -
Collateralpostinginthenormalcourseofbusinessrelatedtothesederivatives - 
Netpositionofderivativecontractsadditionalcollateralpostingrequirements
()
 () ()
() Thiscalculationexcludestheimpactofclosedbutunpaidpositionsastheirsettlementisnotimpactedbyanyofthe
Utility’screditrisk-relatedcontingencies
NOTE 10: Fair Value Measurements
PG&E Corporation and the Utility measure their cash equivalents, trust assets, price risk management instruments, and
other investments at fair value. A three-tier fair value hierarchy is established that prioritizes the inputs to valuation
methodologies used to measure fair value:
đ
Level 1 – Observable inputs that reflect quoted prices
(unadjusted) for identical assets or liabilities in active
markets.
đ
Level 2 – Other inputs that are directly or indirectly
observable in the marketplace.
đ
Level 3 – Unobservable inputs which are supported by
little or no market activities.