Note 6—Derivative Instruments

The primary risk managed by the Company using derivative instruments is commodity price risk, which is accounted for in accordance with ASC 815—Derivatives and Hedging. Natural gas and electricity put and call options and swaps are entered into as hedges against unfavorable fluctuations in market prices of natural gas and electricity. The Company does not apply hedge accounting to these options or swaps, therefore the changes in fair value are recorded in earnings. By using derivative instruments to mitigate exposures to changes in commodity prices, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk. The Company minimizes the credit or repayment risk in derivative instruments by entering into transactions with high-quality counterparties. At September 30, 2018 and December 31, 2017, GRE’s swaps and options were traded on the New York Mercantile Exchange.

The summarized volume of GRE’s outstanding contracts and options at September 30, 2018 was as follows (MWh – Megawatt hour and Dth – Decatherm):

Settlement Dates	Volume
	Electricity (In MWH)		Gas (in Dth)
October 2018		96,960		—
November 2018		68,880		538,650
December 2018		86,800		554,600
January 2019		173,360		812,530
February 2019		157,120		694,825
March 2019		36,960		627,875
April 2019		3,520		36,175
May 2019		3,520		30,450
June 2019		3,200		24,975
July 2019		7,040		20,100
August 2019		7,040		18,200
September 2019		3,200		17,750
October 2019		3,680		16,900
November 2019		3,200		18,575
December 2019		3,360		18,625
Calendar 2020		—		112,375
Calendar 2021		—		19,850

The fair value of outstanding derivative instruments recorded in the accompanying consolidated balance sheets were as follows:

Asset Derivatives	Balance Sheet Location	September 30, 2018		December 31, 2017
		(in thousands)
Derivatives not designated or not qualifying as hedging instruments:
Energy contracts and options	Other current assets	$	2,485	$	4,358

Liability Derivatives

Derivatives not designated or not qualifying as hedging instruments:
Energy contracts and options	Other current liabilities	$	701	$	1,228

The effects of derivative instruments on the consolidated statements of operations was as follows:

		Amount of Gain (Loss) Recognized on Derivatives
Derivatives not designated or not qualifying as	Location of Gain (Loss) Recognized	Three Months Ended September 30,					Nine Months Ended September 30,
hedging instruments	on Derivatives	2018		2017			2018		2017
		(in thousands)
Energy contracts and options	Cost of revenues	$	1,462	$	(763	)	$	1,911	$	(3,482	)