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DERIVATIVE FINANCIAL INSTRUMENTS: | 12 Months Ended
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Dec. 31, 2023
General Discussion of Derivative Instruments and Hedging Activities [Abstract] |
Derivative Financial Instruments | DERIVATIVE FINANCIAL INSTRUMENTS Commodity Price Risk Idaho Power is exposed to market risk relating to electricity, natural gas, and other fuel commodity prices, all of which are heavily influenced by supply and demand. Market risk may be influenced by market participants’ nonperformance of their contractual obligations and commitments, which affects the supply of or demand for the commodity. Idaho Power uses derivative instruments, such as physical and financial forward contracts, for both electricity and fuel to manage the risks relating to these commodity price exposures. The primary objectives of Idaho Power’s energy purchase and sale activity are to meet the demand of retail electric customers, maintain appropriate physical reserves to ensure reliability, and make economic use of temporary surpluses that may develop. All of Idaho Power's derivative instruments have been entered into for the purpose of securing energy resources for future periods or economically hedging forecasted purchases and sales, though none of these instruments have been designated as cash flow hedges. Idaho Power offsets fair value amounts recognized on its balance sheet and applies collateral related to derivative instruments executed with the same counterparty under the same master netting agreement. Idaho Power does not offset a counterparty's current derivative contracts with the counterparty's long-term derivative contracts, although Idaho Power's master netting arrangements would allow current and long-term positions to be offset in the event of default. Also, in the event of default, Idaho Power's master netting arrangements would allow for the offsetting of all transactions executed under the master netting arrangement. These types of transactions may include non-derivative instruments, derivatives qualifying for scope exceptions, receivables and payables arising from settled positions, and other forms of non-cash collateral (such as letters of credit). These types of transactions are excluded from the offsetting presented in the derivative fair value and offsetting table that follows. The table below presents the gains and losses on derivatives not designated as hedging instruments for the years ended December 31, 2023, 2022, and 2021 (in thousands of dollars):
|  | Location of Realized Gain/(Loss) on Derivatives Recognized in Income |  | Gain/(Loss) on Derivatives Recognized in Income(1)
|  |  | 2023 |  | 2022 |  | 2021
Financial swaps |  | Operating revenues |  | $ | 4,216 |  |  | $ | (6,249) |  |  | $ | 1,046 |
Financial swaps |  | Purchased power |  | (8,542) |  |  | 2,373 |  |  | 1,959 |
Financial swaps |  | Fuel expense |  | (16,209) |  |  | 68,489 |  |  | 12,180 |
Forward contracts |  | Operating revenues |  | 2,280 |  |  | 1,090 |  |  | 1,966 |
Forward contracts |  | Purchased power |  | (4,035) |  |  | (2,994) |  |  | (1,099) |
Forward contracts |  | Fuel expense |  | (866) |  |  | (136) |  |  | (194) |
(1) Excludes unrealized gains or losses on derivatives, which are recorded on the balance sheet as regulatory assets or regulatory liabilities. Settlement gains and losses on electricity swap contracts are recorded on the income statement in operating revenues or purchased power depending on the forecasted position being economically hedged by the derivative contract. Settlement gains and losses on contracts for natural gas are reflected in fuel expense. Settlement gains and losses on diesel derivatives are recorded in other O&M expense. See Note 16 - "Fair Value Measurements" for additional information concerning the determination of fair value for Idaho Power’s assets and liabilities from price risk management activities. Credit Risk At December 31, 2023, Idaho Power did not have material credit risk exposure from financial instruments, including derivatives. Idaho Power monitors credit risk exposure through reviews of counterparty credit quality, corporate-wide counterparty credit exposure, and corporate-wide counterparty concentration levels. Idaho Power manages these risks by establishing credit and concentration limits on transactions with counterparties and requiring contractual guarantees, cash deposits, or letters of credit from counterparties or their affiliates, as deemed necessary. Idaho Power’s physical power contracts are commonly under WSPP, Inc. agreements, physical gas contracts are usually under North American Energy Standards Board contracts, and financial transactions are usually under International Swaps and Derivatives Association, Inc. contracts. These contracts typically contain adequate assurance clauses requiring collateralization if a counterparty has debt that is downgraded below investment grade by at least one rating agency. Credit-Contingent Features Certain of Idaho Power's derivative instruments contain provisions that require Idaho Power's unsecured debt to maintain an investment grade credit rating from Moody's and Standard & Poor's Ratings Services. If Idaho Power's unsecured debt were to fall below investment grade, it would be in violation of these provisions, and the counterparties to the derivative instruments could request immediate payment or demand immediate and ongoing full overnight collateralization on derivative instruments in net liability positions. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a liability position at December 31, 2023, was $63.9 million. Idaho Power posted $53.3 million cash collateral related to this amount. If the credit-risk-related contingent features underlying these agreements were triggered on December 31, 2023, Idaho Power would have been required to pay or post collateral to its counterparties up to an additional $14.2 million to cover open liability positions as well as completed transactions that have not yet been paid. Derivative Instrument Summary The table below presents the fair values and locations of derivative instruments not designated as hedging instruments recorded on the balance sheets and reconciles the gross amounts of derivatives recognized as assets and as liabilities to the net amounts presented in the balance sheets at December 31, 2023 and 2022 (in thousands of dollars):
|  |  |  | Asset Derivatives |  | Liability Derivatives
|  | Balance Sheet Location |  | Gross Fair Value |  | Amounts Offset |  | Net Assets |  | Gross Fair Value |  | Amounts Offset |  | Net Liabilities
December 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial swaps |  | Other current assets |  | $ | 241 |  |  | $ | (169) |  |  | $ | 72 |  |  | $ | 169 |  |  | $ | (169) |  |  | $ | — |
Financial swaps |  | Other current liabilities |  | 1,476 |  |  | (1,476) |  |  | — |  |  | 41,977 |  |  | (38,045) |  | (1) | 3,932 |
Forward contracts |  | Other current liabilities |  | — |  |  | — |  |  | — |  |  | 2,000 |  |  | — |  |  | 2,000 |
Long-term: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial swaps |  | Other assets |  | 106 |  |  | (89) |  |  | 17 |  |  | 89 |  |  | (89) |  |  | — |
Financial swaps |  | Other liabilities |  | 376 |  |  | (376) |  |  | — |  |  | 2,123 |  |  | (2,123) |  | (2) | — |
Total |  |  |  | $ | 2,199 |  |  | $ | (2,110) |  |  | $ | 89 |  |  | $ | 46,358 |  |  | $ | (40,426) |  |  | $ | 5,932 |
December 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial swaps |  | Other current assets |  | $ | 72,548 |  |  | $ | (32,609) |  | (3) | $ | 39,939 |  |  | $ | 13,982 |  |  | $ | (13,982) |  |  | $ | — |
Financial swaps |  | Other current liabilities |  | 132 |  |  | (132) |  |  | — |  |  | 1,577 |  |  | (132) |  |  | 1,445 |
Forward contracts |  | Other current assets |  | 400 |  |  | — |  |  | 400 |  |  | — |  |  | — |  |  | — |
Forward contracts |  | Other current liabilities |  | — |  |  | — |  |  | — |  |  | 2,071 |  |  | — |  |  | 2,071 |
Long-term: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial swaps |  | Other assets |  | 622 |  |  | (43) |  |  | 579 |  |  | 43 |  |  | (43) |  |  | — |
Financial swaps |  | Other liabilities |  | 644 |  |  | (644) |  |  | — |  |  | 2,136 |  |  | (644) |  |  | 1,492 |
Forward contracts |  | Other liabilities |  | — |  |  | — |  |  | — |  |  | 1,780 |  |  | — |  |  | 1,780 |
Total |  |  |  | $ | 74,346 |  |  | $ | (33,428) |  |  | $ | 40,918 |  |  | $ | 21,589 |  |  | $ | (14,801) |  |  | $ | 6,788 |
(1) Current liability derivative amounts offset include $36.6 million of collateral receivable at December 31, 2023. (2) Long-term liability derivative amounts offset include $1.7 million of collateral receivable at December 31, 2023. (3) Current asset derivative amounts offset include $18.6 million of collateral payable at December 31, 2022. The table below presents the volumes of derivative commodity forward contracts and swaps outstanding at December 31, 2023 and 2022 (in thousands of units):
|  |  |  | December 31,
Commodity |  | Units |  | 2023 |  | 2022
Electricity purchases |  | MWh |  | 440 |  |  | 898 |
Electricity sales |  | MWh |  | 57 |  |  | 32 |
Natural gas purchases |  | MMBtu |  | 24,593 |  |  | 26,773 |
Natural gas sales |  | MMBtu |  | — |  |  | 310 |

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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/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//815/tableOfContent + Details
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