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Risk Management Activities (Tables)

12 Months Ended

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

X

- Definition

The disclosure of credit risk. [Refer: Credit risk [member]]

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