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Risk Management Activities (Tables)

12 Months Ended

Dec. 31, 2020

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, 2020
			Cash flow hedges						Not designated as a hedge			Total
Commodity risk management
Current			101						(11)			90
Long-term			471						(19)			452
Net commodity risk management assets (liabilities)			572						(30)			542
Other
Current			(9)						(4)			(13)
Long-term			—						1			1
Net other risk management liabilities			(9)						(3)			(12)
Total net risk management assets (liabilities)			563						(33)			530

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

The Corporation’s outstanding commodity derivative instruments designated as hedging instruments are as follows:

As at Dec. 31			2020						2019
Type (thousands)			Notional amount sold			Notional amount purchased			Notional amount sold			Notional amount purchased
Electricity (MWh)(1)			95			—			222			—

(1) Excludes the long-term power sale - US contract. For further details on this contract, refer to Note 15(B)(I)(c)(i).

The Corporation’s outstanding commodity derivative instruments not designated as hedging instruments are as follows:

As at Dec. 31			2020						2019
Type (thousands)			Notional amount sold			Notional amount purchased			Notional amount sold			Notional amount purchased
Electricity (MWh)			12,944			8,258			16,097			7,204
Natural gas (GJ)			23,035			177,448			38,062			55,023
Transmission (MWh)			—			1,578			—			1,818
Emissions (MWh)			1,831			2,112			184			138
Emissions (tonnes)			2,160			2,365			2,436			2,446

As at Dec. 31

2020

2019

Notional amount sold

Notional amount purchased

Fair value liability

Maturity

Notional amount sold

Notional amount purchased

Fair value asset

Maturity

Foreign Exchange Forward Contracts - foreign-denominated receipts/expenditures

CAD71

USD54

(2)

2021

CAD124

USD95

—

2020-2021

As at Dec. 31						2020						2019
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
AUD197			CAD181			(14)			2021-2024			AUD286			CAD266			—			2020 - 2023
USD47			CAD72			9			2021-2024			USD108			CAD139			(4)			2020 - 2023
AUD4			USD3			—			2021
CAD1			EUR1			—			2021
Foreign exchange forward contracts – foreign-denominated debt
CAD191			USD150			2			2022			CAD191			USD150			6			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			2020												2019
			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			120			69			(132)			(104)			316			631			(191)			(100)
Gross amounts set-off			(69)			(10)			69			10			(140)			(42)			140			42
Net amounts as included in the Consolidated Statements of Financial Position			51			59			(63)			(94)			176			589			(51)			(58)

Effect of Hedges

The impact of hedged items designated in hedging relationships on OCI and net earnings is:

Year ended Dec. 31, 2020

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

41

Revenue

(137)

Revenue

—

Foreign exchange forwards on project hedges

(1)

Property, plant and equipment

—

Foreign exchange (gain) loss

—

Forward starting interest rate swaps

(12)

Interest expense

(4)

Interest expense

—

OCI impact

28

OCI impact

(141)

Net earnings impact

—

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 (2019 — three cent, 2018 — 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			2020						2019						2018
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			(8)			1			(18)			2			(13)			—
AUD			(4)			—			(6)			—			(7)			—
Total			(12)			1			(24)			2			(20)			—

(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, 2020:

			Investment grade  (Per cent)			Non-investment grade  (Per cent)			Total  (Per cent)			Total amount
Trade and other receivables(1)			92			8			100			583
Long-term finance lease receivable			100			—			100			228
Risk management assets(1)			93			7			100			692
Loan receivable(2)			—			100			100			52
Total												1,555

(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 22 for further details.

Maturity Analysis of Financial Liabilities

			2021			2022			2023			2024			2025			2026 and thereafter			Total
Accounts payable and accrued liabilities			599			—			—			—			—			—			599
Long-term debt(1)			96			626			277			119			136			2,010			3,264
Exchangeable securities(2)			—			—			—			—			750			—			750
Commodity risk management (assets) liabilities			(92)			(87)			(131)			(131)			(103)			2			(542)
Other risk management (assets) liabilities			14			—			1			(2)			—			(1)			12
Lease liabilities(3)			(5)			6			5			5			5			118			134
Interest on long-term debt and lease   liabilities(4)			161			153			126			119			113			893			1,565
Interest on exchangeable securities(2, 4)			53			52			53			52			—			—			210
Dividends payable			59			—			—			—			—			—			59
Total			885			750			331			162			901			3,022			6,051

(1) Excludes impact of hedge accounting and derivatives.

(2) Assumes the exchangeable securities will be exchanged on Jan. 1, 2025. Refer to Note 25 for further details.

(3) Lease liabilities include a lease incentive of $13 million, expected to be received in 2021.

(4) Not recognized as a financial liability on the Consolidated Statements of Financial Position

The following table outlines the terms and conditions of derivative hedging instruments and how they affect the amount, timing and uncertainty of future cash flows:

			Maturity
			2021			2022			2023			2024			2025			2026 and thereafter
Cash flow hedges(1)
Foreign currency forward contracts
Notional amount ($ millions)
CAD/USD			54			—			—			—			—			—
Average Exchange Rate
CAD/USD			0.7648			—			—			—			—			—
Commodity derivative instruments
Electricity
Notional amount (thousands MWh)			3,424			3,329			3,329			3,338			2,628			—
Average Price ($ per MWh)			69.51			71.91			73.72			75.56			77.44			—

(1) The interest rate swaps detailed above both settle in 2021.

Hedging Instruments

The impact of the hedging instruments on the statement of financial position is as follows:

As at Dec. 31, 2020

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

16 MMWh

573

Risk management assets

(33)

Interest rate risk

Cash flow hedges

Interest rate swap

USD150

(3)

Risk management liabilities

3

Interest rate swap

CAD75

(4)

Risk management liabilities

4

Foreign currency risk

Net investment hedges

Foreign-denominated debt

USD370

CAD472

Credit facilities, long-term debt and lease liabilities

11

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 lease liabilities

21

The impact of the hedged items on the statement of financial position is as follows:

As at Dec. 31			2020						2019
			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			(33)			417			47			527
Interest rate risk
Cash flow hedges
Interest expense on long-term debt			7			19			—			—
			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)
Foreign currency risk
Net investment hedges
Net investment in foreign subsidiaries			11			(21)			21			(21)

(1) Included in AOCI.

X

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

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