Xcel Energy 2012 Annual Report Download - page 129

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119
Recurring Fair Value Measurements — The following tables present 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, 2012:
Dec. 31, 2012
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.. $
-
$ 95
$
-
$
95
$
-
$
95
Other derivative instruments:
Commodity trading ...............
-
26,303
692
26,995
(6,675
)
20,320
Electric commodity ...............
-
-
16,724
16,724
(843
)
15,881
Natural gas commodity ............
-
7
-
7
(7
)
-
Total current derivative assets .... $
-
$ 26,405
$
17,416
$
43,821
$
(7,525
)
36,296
PPAs (a) ............................
32,717
Current derivative instruments .....
$
69,013
Noncurrent derivative assets
Derivatives designated as cash flow
hedges:
Vehicle fuel and other commodity.. $
-
$ 86
$
-
$
86
$
(47
)
$
39
Other derivative instruments:
Commodity trading ...............
-
41,282
77
41,359
(4,162
)
37,197
Total noncurrent derivative assets.$
-
$ 41,368
$
77
$
41,445
$
(4,209
)
37,236
PPAs (a) ............................
89,061
Noncurrent derivative instruments ..
$
126,297
Dec. 31, 2012
Fair Value
Fair Value
Counterparty
(Thousands of Dollars)
Level 1
Level 2
Level 3
Total
Netting (b)
Total
Current derivative liabilities
Other derivative instruments:
Commodity trading ..............
$
-
$ 18,622
$ 1
$ 18,623
$ (9,112)
$ 9,511
Electric commodity ..............
-
-
843
843
(843)
-
Natural gas commodity ...........
-
98
-
98
(7)
91
Total current derivative liabilities
$
-
$ 18,720
$ 844
$ 19,564
$ (9,962)
9,602
PPAs (a) ...........................
22,880
Current derivative instruments ....
$ 32,482
Noncurrent derivative liabilities
Other derivative instruments:
Commodity trading ..............
$
-
$ 21,417
$ -
$ 21,417
$ (4,210)
$ 17,207
Total noncurrent derivative
liabilities.....................
$
-
$ 21,417
$ -
$ 21,417
$ (4,210)
17,207
PPAs (a) ...........................
225,659
Noncurrent derivative instruments .
$ 242,866
(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) 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.