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Derivative Instruments
 12 Months Ended
Dec. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments Derivative Instruments
OTP enters into derivative instruments to manage its exposure to future commodity price variability, specifically future wholesale energy and natural gas prices, and reduce volatility in prices for our retail electric customers. These derivative instruments are not designated as qualifying hedging transactions but provide for an economic hedge against future price variability. The instruments are recorded at fair value on the consolidated balance sheets on a gross basis with assets and liabilities presented separately. In
accordance with rate-making and cost recovery processes, we recognize a regulatory asset or liability to defer losses or gains from derivative activity until settlement of the associated derivative instrument.
As of December 31, 2024 and 2023, OTP had multiple outstanding pay-fixed, receive-variable swap agreements. The contracts outstanding as of December 31, 2024 had various settlement dates throughout 2025. The following presents the notional amounts and fair value of our derivative instruments as of December 31, 2024 and 2023:
(in thousands)20242023
Megawatt hours of electricity167187
Derivative Liabilities:
Other Current Liabilities$1,989 $4,210 
Other Noncurrent Liabilities— — 
Total Derivative Liabilities$1,989 $4,210 
During the years ended December 31, 2024 and 2023, contracts matured and were settled in an aggregate amount of a $3.5 million loss and a $16.5 million loss, respectively. Gains and losses recognized on the settlement of derivative instruments are returned to, or recovered from, our electric customers through fuel recovery mechanisms in each state. When recognized in the consolidated statements of income, these gains or losses are included in electric purchased power. Gains or losses related to the settlement of derivative instruments are included in cash flows from operations in the consolidated statements of cash flows.