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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, 2015 and 2014.
Recurring Fair Value Measurements — The following table presents for each of the fair value hierarchy levels, Xcel Energy’s
derivative assets and liabilities measured at fair value on a recurring basis at Dec. 31, 2015:
Dec. 31, 2015
Fair Value Fair Value
Total Counterparty
Netting (b)
(Thousands of Dollars) Level 1 Level 2 Level 3 Total
Current derivative assets
Other derivative instruments:
Commodity trading. . . . . . . . . . . . . . . . . . . . . . . . . . $ 225 $ 10,620 $ 1,250 $ 12,095 $ (5,865) $ 6,230
Electric commodity. . . . . . . . . . . . . . . . . . . . . . . . . . — — 21,421 21,421 (4,088) 17,333
Natural gas commodity. . . . . . . . . . . . . . . . . . . . . . . — 496 — 496 (303) 193
Total current derivative assets. . . . . . . . . . . . . . . $ 225 $ 11,116 $ 22,671 $ 34,012 $ (10,256) 23,756
PPAs (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,086
Current derivative instruments . . . . . . . . . . . . . . $ 33,842
Noncurrent derivative assets
Other derivative instruments:
Commodity trading. . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ 27,416 $ — $ 27,416 $ (6,555) $ 20,861
Total noncurrent derivative assets. . . . . . . . . . . . $ — $ 27,416 $ — $ 27,416 $ (6,555) 20,861
PPAs (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,222
Noncurrent derivative instruments . . . . . . . . . . . $ 51,083
Dec. 31, 2015
Fair Value Fair Value
Total Counterparty
Netting (b)
(Thousands of Dollars) Level 1 Level 2 Level 3 Total
Current derivative liabilities
Derivatives designated as cash flow hedges:
Vehicle fuel and other commodity . . . . . . . . . . . . . . $ — $ 205 $ — $ 205 $ — $ 205
Other derivative instruments:
Commodity trading. . . . . . . . . . . . . . . . . . . . . . . . . . 152 7,866 555 8,573 (6,904) 1,669
Electric commodity. . . . . . . . . . . . . . . . . . . . . . . . . . — — 4,088 4,088 (4,088) —
Natural gas commodity. . . . . . . . . . . . . . . . . . . . . . . — 5,407 — 5,407 (303) 5,104
Total current derivative liabilities . . . . . . . . . . . . $ 152 $ 13,478 $ 4,643 $ 18,273 $ (11,295) 6,978
PPAs (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,861
Current derivative instruments . . . . . . . . . . . . . . $ 29,839
Noncurrent derivative liabilities
Derivatives designated as cash flow hedges:
Commodity trading. . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ 19,898 $ — $ 19,898 $ (9,780) $ 10,118
Total noncurrent derivative liabilities . . . . . . . . . $ — $ 19,898 $ — $ 19,898 $ (9,780) 10,118
PPAs (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158,193
Noncurrent derivative instruments . . . . . . . . . . . $ 168,311
(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
PPAs 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) Xcel Energy nets derivative instruments and related collateral in its consolidated balance sheet when supported by a legally enforceable master netting agreement,
and all derivative instruments and related collateral amounts were subject to master netting agreements at Dec. 31, 2015. At Dec. 31, 2015, derivative assets and
liabilities include no obligations to return cash collateral and rights to reclaim cash collateral of $4.3 million. The counterparty netting amounts presented exclude
settlement receivables and payables and non-derivative amounts that may be subject to the same master netting agreements.