Xcel Energy 2011 Annual Report Download - page 127

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117
The following table presents for each of the hierarchy levels, Xcel Energy’s derivative assets and liabilities that are measured at
fair value on a recurring basis at Dec. 31, 2010:
Dec. 31, 2010
Fair Value Fair Value
Counterparty
(Thousands of Dollars) Level 1 Level 2 Level 3 Total Netting (b) Total
Current derivative assets
Derivatives designated as cash flow hedges:
Vehicle fuel and other commodity
...........
$ - $
126 $
-
$
126 $
- $
126
Other derivative instruments:
Trading commodity
.........................
487 37,019
-
37,506 (21,352) 16,154
Electric commodity
.........................
- -
3,619
3,619 (1,226) 2,393
Natural gas commodity
.....................
- 1,595
-
1,595 (1,219) 376
Total current derivative assets
.............
$ 487 $
38,740 $
3,619
$
42,846 $
(23,797) 19,049
Purchased power agreements (a)
................
35,030
Current derivative instruments
...............
$
54,079
Noncurrent derivative assets
Derivatives designated as cash flow hedges:
Vehicle fuel and other commodity
...........
$ - $
150 $
-
$
150 $
- $
150
Other derivative instruments:
Trading commodity
.........................
- 32,621
-
32,621 (4,595) 28,026
Natural gas commodity
.....................
- 1,246
-
1,246 (269) 977
Total noncurrent derivative assets
..........
$ - $
34,017 $
-
$
34,017 $
(4,864) 29,153
Purchased power agreements (a)
................
154,873
Noncurrent derivative instruments
...........
$
184,026
Dec. 31, 2010
Fair Value Fair Value
Counterparty
(Thousands of Dollars) Level 1 Level 2 Level 3 Total Netting (b) Total
Current derivative liabilities
Other derivative instruments:
Trading commodity
.........................
$
392 $
30,608 $
- $
31,000
$
(24,007) $
6,993
Electric commodity
.........................
- - 1,227
1,227
(1,227) -
Natural gas commodity
.....................
20 52,709 -
52,729
(21,169) 31,560
Total current derivative liabilities
..........
$
412 $
83,317 $
1,227 $
84,956
$
(46,403) 38,553
Purchased power agreements (a)
................
23,192
Current derivative instruments
...............
$
61,745
Noncurrent derivative liabilities
Other derivative instruments:
Trading commodity
.........................
$
- $
18,878 $
- $
18,878
$
(4,596) $
14,282
Natural gas commodity
.....................
- 438 -
438
(269) 169
Total noncurrent derivative liabilities
.......
$
- $
19,316 $
- $
19,316
$
(4,865) 14,451
Purchased power agreements (a)
................
271,535
Noncurrent derivative instruments
...........
$
285,986
(a) In 2003, as a result of implementing new guidance on the normal purchase exception for derivative accounting, Xcel Energy began recording several long-
term purchased power agreements at fair value due to accounting requirements related to underlying price adjustments. As these purchases are recovered
through normal regulatory recovery mechanisms in the respective jurisdictions, the changes in fair value for these contracts were offset by regulatory assets
and liabilities. During 2006, Xcel Energy qualified these contracts under the normal purchase exception. Based on this qualification, the contracts are no
longer adjusted to fair value and the previous carrying value of these contracts will be amortized over the remaining contract lives along with the offsetting
regulatory assets and liabilities.
(b) The accounting guidance for derivatives and hedging permits the netting of receivables and payables for derivatives and related collateral amounts when a
legally enforceable master netting agreement exists between Xcel Energy and a counterparty. A master netting agreement is an agreement between two
parties who have multiple contracts with each other that provides for the net settlement of all contracts in the event of default on or termination of any one
contract.