Xcel Energy 2014 Annual Report Download - page 136

118
Year Ended Dec. 31, 2012
Pre-Tax Fair Value
Gains (Losses) Recognized
During the Period in:
Pre-Tax (Gains) Losses
Reclassified into Income
During the Period from: Pre-Tax Gains
(Losses)
Recognized
During the Period
in Income(Thousands of Dollars)
Accumulated
Other
Comprehensive
Loss
Regulatory
(Assets) and
Liabilities
Accumulated
Other
Comprehensive
Loss
Regulatory
Assets and
(Liabilities)
Derivatives designated as cash
flow hedges
Interest rate . . . . . . . . . . . . . . . . . $ (31,913) $ — $ 6,582 (a) $ — $ —
Vehicle fuel and other
commodity. . . . . . . . . . . . . . . . 120 — (198)(b) — —
Total . . . . . . . . . . . . . . . . . . . . $ (31,793) $ — $ 6,384 $ — $ —
Other derivative instruments
Commodity trading . . . . . . . . . . . $ — $ — $ — $ — $ 12,226 (c)
Electric commodity. . . . . . . . . . . — 44,162 — (39,999)(d) —
Natural gas commodity. . . . . . . . — (10,809) — 80,902 (e) (137) (d)
Total . . . . . . . . . . . . . . . . . . . . $ — $ 33,353 $ — $ 40,903 $ 12,089
(a) Amounts are recorded to interest charges.
(b) Amounts are recorded to O&M expenses.
(c) 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.
(d) 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.
(e) Amounts for the year ended Dec. 31, 2012 included $5.0 million of settlement losses 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. Such losses
for the years ended Dec. 31, 2014 and 2013 were immaterial. The remaining settlement losses for the years ended Dec. 31, 2014, 2013 and 2012 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 out of income to
a regulatory asset, as appropriate.
Xcel Energy had no derivative instruments designated as fair value hedges during the years ended Dec. 31, 2014, 2013 and 2012.
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 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. At Dec. 31, 2014, there were no derivative
instruments with contract provisions that required the posting of collateral or settlement of the contracts. If the credit ratings of Xcel
Energy Inc.’s utility subsidiaries were downgraded below investment grade, derivative instruments reflected in a $1.4 million gross
liability position on the consolidated balance sheets at Dec. 31, 2013, would have required Xcel Energy Inc.’s utility subsidiaries to
post collateral or settle outstanding contracts, including other contracts subject to master netting agreements, which would have
resulted in payments of $1.4 million at Dec. 31, 2013. At Dec. 31, 2013, 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, 2014 and 2013.