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DERIVATIVE INSTRUMENTS | 9 Months Ended
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Sep. 30, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS We use derivatives as part of our risk management program to manage the risks associated with the price volatility of purchased power, generation, and natural gas costs for the benefit of our customers and shareholders. Our approach is non-speculative and designed to mitigate risk. Regulated hedging programs are approved by our state regulators. We record derivative instruments on our balance sheets as an asset or liability measured at fair value unless they qualify for the normal purchases and sales exception, and are so designated. We continually assess our contracts designated as normal and will discontinue the treatment of these contracts as normal if the required criteria are no longer met. Changes in the derivative's fair value are recognized currently in earnings unless specific hedge accounting criteria are met or we receive regulatory treatment for the derivative. For most energy-related physical and financial contracts in our regulated operations that qualify as derivatives, our regulators allow the effects of fair value accounting to be offset to regulatory assets and liabilities. The following table shows our derivative assets and derivative liabilities:
|  | September 30, 2017 |  | December 31, 2016
(in millions) |  | Derivative Assets |  | Derivative Liabilities |  | Derivative Assets |  | Derivative Liabilities
Other current |  |  |  |  |  |  |  |
Natural gas contracts |  | $ | 5.4 |  |  | $ | 4.0 |  |  | $ | 31.4 |  |  | $ | 0.4 |
Petroleum products contracts |  | 1.0 |  |  | — |  |  | 0.2 |  |  | 0.1 |
FTRs |  | 7.3 |  |  | — |  |  | 5.1 |  |  | — |
Coal contracts |  | 0.6 |  |  | 1.4 |  |  | 1.5 |  |  | 1.4 |
Total other current * |  | $ | 14.3 |  |  | $ | 5.4 |  |  | $ | 38.2 |  |  | $ | 1.9 |
Other long-term |  |  |  |  |  |  |  |
Natural gas contracts |  | $ | 1.1 |  |  | $ | — |  |  | $ | 2.9 |  |  | $ | — |
Coal contracts |  | 0.3 |  |  | 0.7 |  |  | 0.5 |  |  | 0.5 |
Total other long-term * |  | $ | 1.4 |  |  | $ | 0.7 |  |  | $ | 3.4 |  |  | $ | 0.5 |
Total |  | $ | 15.7 |  |  | $ | 6.1 |  |  | $ | 41.6 |  |  | $ | 2.4 |
* | On our balance sheets, we classify derivative assets and liabilities as other current or other long-term based on the maturities of the underlying contracts.
Realized gains (losses) on derivative instruments are primarily recorded in cost of sales on the income statements. Our estimated notional sales volumes and realized gains (losses) were as follows:
|  | Three Months Ended September 30, 2017 |  | Three Months Ended September 30, 2016
(in millions) |  | Volumes |  | Gains (Losses) |  | Volumes |  | Gains (Losses)
Natural gas contracts |  | 24.9 Dth |  | $ | (2.1 | ) |  | 30.5 Dth |  | $ | (3.4 | )
Petroleum products contracts |  | 4.4 gallons |  | (0.5 | ) |  | 4.3 gallons |  | (0.4 | )
FTRs |  | 9.4 MWh |  | 4.2 |  |  | 9.9 MWh |  | 7.1 |
Total |  |  |  | $ | 1.6 |  |  |  |  | $ | 3.3 |
|  | Nine Months Ended September 30, 2017 |  | Nine Months Ended September 30, 2016
(in millions) |  | Volumes |  | Gains (Losses) |  | Volumes |  | Gains (Losses)
Natural gas contracts |  | 84.2 Dth |  | $ | (1.1 | ) |  | 113.3 Dth |  | $ | (56.9 | )
Petroleum products contracts |  | 14.2 gallons |  | (1.4 | ) |  | 10.9 gallons |  | (2.5 | )
FTRs |  | 28.0 MWh |  | 9.4 |  |  | 24.9 MWh |  | 11.7 |
Total |  |  |  | $ | 6.9 |  |  |  |  | $ | (47.7 | )
On our balance sheets, the amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral are not offset against the fair value amounts recognized for derivative instruments executed with the same counterparty under the same master netting arrangement. At September 30, 2017 and December 31, 2016, we had posted cash collateral of $24.7 million and $16.4 million, respectively, in our margin accounts. These amounts were recorded on our balance sheets in other current assets. At December 31, 2016, we had also received cash collateral of $4.4 million in our margin accounts. This amount was recorded on our balance sheet in other current liabilities. The following table shows derivative assets and derivative liabilities if derivative instruments by counterparty were presented net on our balance sheets:
|  | September 30, 2017 |  | December 31, 2016
(in millions) |  | Derivative Assets |  | Derivative Liabilities |  | Derivative Assets |  | Derivative Liabilities
Gross amount recognized on the balance sheet |  | $ | 15.7 |  |  | $ | 6.1 |  |  | $ | 41.6 |  |  | $ | 2.4 |
Gross amount not offset on the balance sheet |  | (3.0 | ) |  | (3.1 | ) | (1) | (4.9 | ) | (2) | (0.5 | )
Net amount |  | $ | 12.7 |  |  | $ | 3.0 |  |  | $ | 36.7 |  |  | $ | 1.9 |
(1) | Includes cash collateral posted of $0.1 million.
(2) | Includes cash collateral received of $4.4 million.
Certain of our derivative and nonderivative commodity instruments contain provisions that could require "adequate assurance" in the event of a material change in our creditworthiness, or the posting of additional collateral for instruments in net liability positions, if triggered by a decrease in credit ratings. The aggregate fair value of all derivative instruments with specific credit risk-related contingent features that were in a net liability position was $2.3 million and $0.2 million at September 30, 2017 and December 31, 2016, respectively. At September 30, 2017 and December 31, 2016, we had not posted any collateral related to the credit risk-related contingent features of these commodity instruments. If all of the credit risk-related contingent features contained in derivative instruments in a net liability position had been triggered at September 30, 2017, we would have been required to post collateral of $0.8 million. At December 31, 2016, we would not have been required to post any collateral.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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