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Risk Management Activities (Tables) | 12 Months Ended
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Dec. 31, 2019
Financial Instruments [Abstract] |
Derivative Financial Instruments | Net Risk Management Assets and Liabilities Aggregate net risk management assets and (liabilities) are as follows:
As at Dec. 31, 2019 |  |  |  |
| Cash flow hedges |  | Not designated as a hedge | Total
Commodity risk management |  |  |  |
Current | 70 |  |  | 15 |  | 85 |
Long-term | 606 |  |  | 1 |  | 607 |
Net commodity risk management assets | 676 |  |  | 16 |  | 692 |
Other |  |  |  |
Current | — |  |  | — |  | — |
Long-term | — |  |  | 4 |  | 4 |
Net other risk management assets | — |  |  | 4 |  | 4 |
Total net risk management assets | 676 |  |  | 20 |  | 696 |
As at Dec. 31, 2018 |  |  |  |
| Cash flow hedges |  | Not designated as a hedge | Total
Commodity risk management |  |  |  |
Current | 59 |  |  | — |  | 59 |
Long-term | 628 |  |  | (8) |  | 620 |
Net commodity risk management assets (liabilities) | 687 |  |  | (8) |  | 679 |
Other |  |  |  |
Current | — |  |  | (3) |  | (3) |
Long-term | — |  |  | 1 |  | 1 |
Net other risk management liabilities | — |  |  | (2) |  | (2) |
Total net risk management assets (liabilities) | 687 |  |  | (10) |  | 677 |
The Corporation’s outstanding commodity derivative instruments designated as hedging instruments are as follows:
As at Dec. 31 | 2019 |  | 2018 |
Type (thousands) | Notional amount sold | Notional amount purchased | Notional amount sold | Notional amount purchased
Electricity (MWh) | 222 |  | — |  | 2,128 |  | — |
The Corporation’s outstanding commodity derivative instruments not designated as hedging instruments are as follows:
As at Dec. 31 | 2019 |  | 2018 |
Type (thousands) | Notional amount sold | Notional amount purchased | Notional amount sold | Notional amount purchased
Electricity (MWh) | 16,097 |  | 7,204 |  | 58,885 |  | 37,023 |
Natural gas (GJ) | 38,062 |  | 55,023 |  | 80,413 |  | 110,488 |
Transmission (MWh) | — |  | 1,818 |  | 29 |  | 11,163 |
Emissions (MWh) | 184 | 138 | — |  | — |
Emissions (tonnes) | 2,436 |  | 2,446 |  | 3,134 |  | 2,948 |
As at Dec. 31 |  | 2019 |  | 2018 |  |  |
Notional amount sold | Notional amount purchased | Fair value asset (liability) | Maturity | Notional amount sold | Notional amount purchased | Fair value asset (liability) | Maturity
Foreign exchange forward contracts – foreign-denominated receipts/expenditures |  |  |  |  |  |  |
AUD286 | CAD266 | — |  | 2020 - 2023 | AUD218 | CAD205 | (5) |  | 2019-2022
USD108 | CAD139 | (4) |  | 2020 - 2023 | USD164 | CAD214 | (7) |  | 2019-2022
Foreign exchange forward contracts – foreign-denominated debt |  |  |  |  |  |  |
CAD191 |  | USD150 |  | 6 |  | 2022 | CAD124 |  | USD100 |  | 10 |  | 2022
Net Arrangements | Information about the Corporation’s financial assets and liabilities that are subject to enforceable master netting arrangements or similar agreements is as follows:
As at Dec. 31 | 2019 |  |  |  | 2018 |  |  |
| Current financial assets | Long-term financial assets | Current financial liabilities | Long-term financial liabilities | Current financial assets | Long-term financial assets | Current financial liabilities | Long-term financial liabilities
Gross amounts recognized | 316 |  | 631 |  | (191) |  | (100) |  | 224 |  | 657 |  | (116) |  | (42) |
Gross amounts set-off | (140) |  | (42) |  | 140 |  | 42 |  | (53) |  | (6) |  | 53 |  | 6 |
Net amounts as included in the Consolidated Statements of Financial Position | 176 |  | 589 |  | (51) |  | (58) |  | 171 |  | 651 |  | (63) |  | (36) |
Effect of Hedges | The impact of hedged items designated in hedging relationships on OCI and net earnings is:
Year ended Dec. 31, 2019 |  |  |  |  |  |  |  |  |  |
|  |  |  | Effective portion |  |  |  | Ineffective portion |  |
Derivatives in cash flow hedging relationships |  | Pre-tax gain (loss) recognized in OCI |  | Location of (gain) loss reclassified from OCI |  | Pre-tax (gain) loss reclassified from OCI |  | Location of (gain) loss reclassified from OCI |  | Pre-tax (gain) loss recognized in earnings
Commodity contracts |  | 77 |  |  | Revenue |  | (59) |  |  | Revenue |  | — |
Forward starting interest rate swaps |  | — |  |  | Interest expense |  | 6 |  |  | Interest expense |  | — |
OCI impact |  | 77 |  |  | OCI impact |  | (53) |  |  | Net earnings impact |  | — |
Year ended Dec. 31, 2018 |  |  |  |  |  |  |  |  |  |
|  |  |  | Effective portion |  |  |  | Ineffective portion |  |
Derivatives in cash flow hedging relationships |  | Pre-tax gain (loss) recognized in OCI |  | Location of (gain) loss reclassified from OCI |  | Pre-tax (gain) loss reclassified from OCI |  | Location of (gain) loss reclassified from OCI |  | Pre-tax (gain) loss recognized in earnings
Commodity contracts |  | (9) |  |  | Revenue |  | (67) |  |  | Revenue |  | — |
Foreign exchange forwards on US debt |  | — |  |  | Foreign exchange (gain) loss |  | 3 |  |  | Foreign exchange (gain) loss |  | — |
Forward starting interest rate swaps |  | — |  |  | Interest expense |  | 7 |  |  | Interest expense |  | — |
OCI impact |  | (9) |  |  | OCI impact |  | (57) |  |  | Net earnings impact |  | — |
Currency Rate Risk | The possible effect on net earnings and OCI, due to changes in foreign exchange rates associated with financial instruments denominated in currencies other than the Corporation’s functional currency, is outlined below. The sensitivity analysis has been prepared using management’s assessment that an average three cent (2018 and 2017 - four cent) increase or decrease in these currencies relative to the Canadian dollar is a reasonable potential change over the next quarter.
Year ended Dec. 31 | 2019 |  | 2018 |  | 2017 |
Currency | Net earnings increase (decrease)(1) | OCI gain(1),(2) | Net earnings increase(1) | OCI gain(1),(2) | Net earnings decrease(1) | OCI gain(1),(2)
USD | (18) |  | 2 |  | (13) |  | — |  | (5) |  | — |
AUD | (6) |  | — |  | (7) |  | — |  | (7) |  | — |
Total | (24) |  | 2 |  | (20) |  | — |  | (12) |  | — |
(1) These calculations assume an increase in the value of these currencies relative to the Canadian dollar. A decrease would have the opposite effect. (2) The foreign exchange impact related to financial instruments designated as hedging instruments in net investment hedges has been excluded.
Credit Risk | The following table outlines the Corporation’s maximum exposure to credit risk without taking into account collateral held, including the distribution of credit ratings, as at Dec. 31, 2019:
| Investment grade (Per cent) | Non-investment grade (Per cent) | Total (Per cent) | Total amount
Trade and other receivables(1) | 85 |  | 15 |  | 100 |  | 462 |
Long-term finance lease receivable | 100 |  | — |  | 100 |  | 176 |
Risk management assets(1) | 99 |  | 1 |  | 100 |  | 806 |
Loan receivable(2) | — |  | 100 |  | 100 |  | 47 |
Total |  |  |  |  |  |  | 1,491 |
(1) Letters of credit and cash and cash equivalents are the primary types of collateral held as security related to these amounts. (2) The counterparty has no external credit rating. Refer to Note 21 for further details.
Maturity Analysis of Financial Liabilities | A maturity analysis of the Corporation’s financial liabilities is as follows:
| 2020 | 2021 | 2022 | 2023 | 2024 | 2025 and thereafter | Total
Accounts payable and accrued liabilities | 413 |  | — |  | — |  | — |  | — |  | — |  | 413 |
Long-term debt(1) | 494 |  | 98 |  | 625 |  | 372 |  | 105 |  | 1,410 |  | 3,104 |
Exchangeable securities(2) | — |  | — |  | — |  | — |  | — |  | 350 |  | 350 |
Commodity risk management assets | (89) |  | (89) |  | (143) |  | (139) |  | (135) |  | (97) |  | (692) |
Other risk management (assets) liabilities | 1 |  | — |  | (6) |  | 2 |  | — |  | (1) |  | (4) |
Lease obligations | 19 |  | 14 |  | 9 |  | 6 |  | 4 |  | 90 |  | 142 |
Interest on long-term debt and lease obligations(3) | 161 |  | 138 |  | 128 |  | 98 |  | 87 |  | 671 |  | 1,283 |
Interest on exchangeable securities(2, 3) | 25 |  | 25 |  | 25 |  | 24 |  | 24 |  | — |  | 123 |
Dividends payable | 37 |  | — |  | — |  | — |  | — |  | — |  | 37 |
Total | 1,061 |  | 186 |  | 638 |  | 363 |  | 85 |  | 2,423 |  | 4,756 |
(1) Excludes impact of hedge accounting. (2) Assumes the debentures will be exchanged on Jan. 1, 2025. Refer to Note 24 for further details. (3) Not recognized as a financial liability on the Consolidated Statements of Financial Position
Hedging Instruments | The impact of the hedging instruments on the statement of financial position is as follows:
As at Dec. 31, 2019 |  |  |  |
| Notional amount | Carrying amount | Line item in the statement of financial position | Change in fair value used for measuring ineffectiveness
Commodity price risk |  |  |  |
Cash flow hedges |  |  |  |
Physical power sales | 19 | MMWh | 678 |  | Risk management assets |  | 47 |
Foreign currency risk |  |  |  |
Net investment hedges |  |  |  |
Foreign-denominated debt | USD370 |  | CAD483 |  | Credit facilities, long-term debt and finance lease obligations |  | 21 |
As at Dec. 31, 2018 |  |  |  |
| Notional amount | Carrying amount | Line item in the statement of financial position | Change in fair value used for measuring ineffectiveness
Commodity price risk |  |  |  |
Cash flow hedges |  |  |  |
Physical power sales | 23 MMWh |  | 687 |  | Risk management assets |  | 60 |
Foreign currency risk |  |  |  |
Net investment hedges |  |  |  |
Foreign-denominated debt | USD400 | CAD546 | Credit facilities, long-term debt and finance lease obligations | (41) |
The impact of the hedged items on the statement of financial position is as follows:
As at Dec. 31, 2019 | 2019 |  | 2018 |
| Change in fair value used for measuring ineffectiveness |  | Cash flow hedge reserve(1) | Change in fair value used for measuring ineffectiveness |  | Cash flow hedge reserve(1)
Commodity price risk |  |  |  |
Cash flow hedges |  |  |  |
Power forecast sales – Centralia | 47 |  | 527 |  | 60 |  | 508 |
| Change in fair value used for measuring ineffectiveness |  | Foreign currency translation reserve(1) | Change in fair value used for measuring ineffectiveness |  | Foreign currency translation reserve(1)
Net investment hedges |  |  |  |
Net investment in foreign subsidiaries | 21 |  | (21) |  | (41) |  | 17 |

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