Xcel Energy 2012 Annual Report Download - page 128

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118
Year Ended Dec. 31, 2010
Pre-Tax Fair Value Gains
(Losses) Recognized During the
Period in:
Pre-Tax (Gains) Losses
Reclassified into Income During
the Period from:
(Thousands of Dollars)
Accumulated
Other
Comprehensive
Loss
Regulatory
(Assets) and
Liabilities
Accumulated
Other
Comprehensive
Loss
Regulatory
Assets and
(Liabilities)
Pre-
Tax Gains
Recognized
During the
Period in
Income
Derivatives designated as cash flow hedges
Interest rate................................
....
$
(7,210)
$
-
$
1,107(a)
$ -
$ -
Vehicle fuel and other commodity
...............
(238)
-
3,474(e)
-
-
Total ................................
........
$
(7,448)
$
-
$
4,581
$ -
$ -
Other derivative instruments
Commodity trading
............................
$
-
$
-
$
-
$ -
$ 11,004(b)
Electric commodity
............................
-
3,969
-
(21,840)(c)
-
Natural gas commodity
.........................
-
(105,396
)
-
51,034 (d)
-
Other ................................
.........
-
-
-
-
135(b)
Total ................................
........
$
-
$
(101,427
)
$
-
$ 29,194
$ 11,139
(a) Amounts are recorded to interest charges.
(b) Amounts are recorded to electric operating revenues. Portions of these gains and losses are subject to sharing with electric customers through margin-sharing
mechanisms and deducted from gross revenue, as appropriate.
(c) Amounts are recorded to electric fuel and purchased power. These derivative settlement gains and losses are shared with electric customers through fuel and
purchased energy cost-recovery mechanisms, and reclassified out of income as regulatory assets or liabilities, as appropriate.
(d) Amounts for the years ended Dec. 31, 2012, 2011 and 2010 include $5.0 million, $12.7 million and $9.8 million of settlement losses, respectively, on
derivatives entered to mitigate natural gas price risk for electric generation, recorded to electric fuel and purchased power, subject to cost-recovery
mechanisms and reclassified to a regulatory asset, as appropriate. The remaining settlement losses for the years ended Dec. 31, 2012, 2011 and 2010 relate to
natural gas operations and are recorded to cost of natural gas sold and transported. These losses are subject to cost-recovery mechanisms and reclassified to a
regulatory asset, as appropriate.
(e) Amounts are recorded to O&M expenses.
Xcel Energy had no derivative instruments designated as fair value hedges during the years ended Dec 31, 2012, 2011 and 2010.
Therefore, no gains or losses from fair value hedges or related hedged transactions were recognized for these periods.
Credit Related Contingent Features — Contract provisions for derivative instruments that the utility subsidiaries enter, including
those recorded to the consolidated balance sheet at fair value, as well as those accounted for as normal purchase-normal sale
(NPNS) contracts and therefore not reflected on the balance sheet, may require the posting of collateral or settlement of the
contracts for various reasons, including if the applicable utility subsidiary is unable to maintain its credit ratings. If the credit
ratings of Xcel Energy Inc.’s utility subsidiaries were downgraded below investment grade, derivative instruments reflected in a
$4.6 million and $8.3 million gross liability position on the consolidated balance sheets at Dec. 31, 2012 and 2011, respectively,
would have required Xcel Energy Inc.’s utility subsidiaries to post collateral or settle outstanding contracts, including NPNS
contracts, which would have resulted in payments of $4.6 million and $9.3 million at Dec. 31, 2012 and 2011, respectively,
inclusive of the impacts of the offsetting asset positions with the applicable counterparties. At Dec. 31, 2012 and 2011, there was
no collateral posted on these specific contracts.
Certain derivative instruments are also subject to contract provisions that contain adequate assurance clauses. These provisions
allow counterparties to seek performance assurance, including cash collateral, in the event that a given utility subsidiary’s ability
to fulfill its contractual obligations is reasonably expected to be impaired. Xcel Energy had no collateral posted related to
adequate assurance clauses in derivative contracts as of Dec. 31, 2012 and 2011.