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Derivative Instruments | 9 Months Ended
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Sep. 30, 2023
Derivative Instruments [Abstract] |
Derivative Instruments | Note 7—Derivative Instruments The primary risk managed by the Company using derivative instruments is commodity price risk, which is accounted for in accordance with Accounting Standards Codification 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, 2023, GRE’s swaps and options were traded on the Intercontinental Exchange. The summarized volume of GRE’s outstanding contracts and options at September 30, 2023 was as follows (MWh – Megawatt hour and Dth – Decatherm):
Settlement Dates |  | Volume |
|  | Electricity (in MWH) |  |  | Gas (in Dth) |
Fourth quarter 2023 |  |  | 789,300 |  |  |  | 19,152 |
First quarter 2024 |  |  | 13,040 |  |  |  | 1,137,500 |
Second quarter 2024 |  |  | — |  |  |  | — |
Third quarter of 2024 |  |  | 24,208 |  |  |  | — |
Fourth quarter of 2024 |  |  | — |  |  |  | — |
First quarter of 2025 |  |  | — |  |  |  | 225,000 |
Second quarter of 2025 |  |  | — |  |  |  | 227,500 |
Third quarter of 2025 |  |  | — |  |  |  | 230,000 |
Fourth quarter of 2025 |  |  | — |  |  |  | 230,000 |
First quarter of 2026 |  |  | — |  |  |  | — |
Second quarter of 2026 |  |  | — |  |  |  | — |
Third quarter of 2026 |  |  | 3,520 |  |  |  | — |
The fair value of outstanding derivative instruments recorded in the accompanying consolidated balance sheets were as follows:
Asset Derivatives |  | Balance Sheet Location |  | September 30, 2023 |  |  | December 31, 2022 |
|  |  |  | (in thousands) |
Derivatives not designated or not qualifying as hedging instruments: |  |  |  |  |  |  |  |  |  |
Energy contracts and options1 |  | Other current assets |  | $ | 865 |  |  | $ | 2,799 |
Energy contracts and options |  | Other assets |  |  | 730 |  |  |  | 1,261 |
Total derivatives not designated or not qualifying as hedging instruments — Assets |  |  |  | $ | 1,595 |  |  | $ | 4,060 |
Liability Derivatives |  | Balance Sheet Location |  | September 30, 2023 |  |  | December 31, 2022 |
|  |  |  | (in thousands) |
Derivatives not designated or not qualifying as hedging instruments: |  |  |  |  |  |  |  |  |  |
Energy contracts and options1 |  | Other current liabilities |  | $ | 2,380 |  |  | $ | 1,800 |
Energy contracts and options |  | Other liabilities |  |  | 12 |  |  |  | 1,057 |
Total derivatives not designated or not qualifying as hedging instruments — Liabilities |  |  |  | $ | 2,392 |  |  | $ | 2,857 |
(1) The Company classifies derivative assets and liabilities as current based on the cash flows expected to be incurred within the following 12 months. The effects of derivative instruments on the consolidated statements of operations was as follows:
|  | Amount of (Loss) Gain Recognized on Derivatives |
Derivatives not designated or not qualifying as |  |  | Location of Gain Recognized |  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
hedging instruments |  |  | on Derivatives |  |  | 2023 |  |  |  | 2022 |  |  |  | 2023 |  |  |  | 2022 |
|  |  |  |  | (in thousands) |  |  | (in thousands) |
Energy contracts and options |  |  | Cost of revenues |  | $ | (4,461 | ) |  | $ | 35,011 |  |  | $ | (21,590 | ) |  | $ | 102,060 |

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//815/tableOfContent + Details
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