Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 28, 2016 | |
Entity Registrant Name | AMERICAN ELECTRIC POWER CO INC | |
Entity Central Index Key | 4,904 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 491,313,380 | |
Appalachian Power Co [Member] | ||
Entity Registrant Name | APPALACHIAN POWER CO | |
Entity Central Index Key | 6,879 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 13,499,500 | |
Indiana Michigan Power Co [Member] | ||
Entity Registrant Name | INDIANA MICHIGAN POWER CO | |
Entity Central Index Key | 50,172 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 1,400,000 | |
Ohio Power Co [Member] | ||
Entity Registrant Name | OHIO POWER CO | |
Entity Central Index Key | 73,986 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 27,952,473 | |
Public Service Co Of Oklahoma [Member] | ||
Entity Registrant Name | PUBLIC SERVICE CO OF OKLAHOMA | |
Entity Central Index Key | 81,027 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 9,013,000 | |
Southwestern Electric Power Co [Member] | ||
Entity Registrant Name | SOUTHWESTERN ELECTRIC POWER CO | |
Entity Central Index Key | 92,487 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 7,536,640 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenues | ||
Vertically Integrated Utilities | $ 2,218.1 | $ 2,487.4 |
Transmission and Distribution Utilities | 1,077.3 | 1,206.3 |
Generation & Marketing | 713.9 | 859.2 |
Other Revenues | 35.6 | 27.5 |
TOTAL REVENUES | 4,044.9 | 4,580.4 |
Expenses | ||
Fuel and Other Consumables Used for Electric Generation | 675.6 | 1,071.2 |
Purchased Electricity for Resale | 731.4 | 718.4 |
Other Operation | 715.1 | 661.3 |
Maintenance | 278.7 | 285.6 |
Depreciation and Amortization | 497.1 | 495.4 |
Taxes Other Than Income Taxes | 254.1 | 245.7 |
TOTAL EXPENSES | 3,152 | 3,477.6 |
Operating Income (Loss) | 892.9 | 1,102.8 |
Other Income (Expense): | ||
Interest and Investment Income | 2.1 | 1.4 |
Carrying Costs Income | 3.9 | 8.4 |
Allowance for Equity Funds Used During Construction | 31.7 | 29.7 |
Interest Expense | (217) | (218.7) |
INCOME BEFORE INCOME TAX EXPENSE | 713.6 | 923.6 |
Income Tax Expense (Credit) | 235.5 | 327.2 |
Equity Earnings (Loss) of Unconsolidated Subsidiaries | 25 | 23.8 |
Income from Continuing Operations | 503.1 | 620.2 |
Income from Discontinued Operations, Net of Tax | 0 | 10.5 |
Net Income (Loss) | 503.1 | 630.7 |
Net Income Attributable to Noncontrolling Interests | 1.9 | 1.5 |
Earnings Attributable to Common Shareholders | $ 501.2 | $ 629.2 |
Earnings Per Share | ||
Weighted Average Number of Basic AEP Common Shares Outstanding | 491,108,392 | 489,597,986 |
Basic Earnings Per Share Attributable to AEP Common Shareholders from Continuing Operations | $ 1.02 | $ 1.27 |
Basic Earnings Per Share Attributable to AEP Common Shareholders from Discontinued Operations | 0 | 0.02 |
Total Basic Earnings Per Share Attributable to AEP Common Shareholders | $ 1.02 | $ 1.29 |
Weighted Average Number of Diluted AEP Common Shares Outstanding | 491,332,305 | 489,936,726 |
Diluted Earnings Per Share Attributable to AEP Common Shareholders from Continuing Operations | $ 1.02 | $ 1.27 |
Diluted Earnings Per Share Attributable to AEP Common Shareholders From Discontinued Operations | 0 | 0.02 |
Total Diluted Earnings Per Share Attributable to AEP Common Shareholders | 1.02 | 1.29 |
Common Stock, Dividends, Per Share, Declared | $ 0.56 | $ 0.53 |
Appalachian Power Co [Member] | ||
Revenues | ||
Vertically Integrated Utilities | $ 775.5 | $ 854.2 |
Sales to AEP Affiliates | 40.4 | 42.5 |
Other Revenues | 4.1 | 2.3 |
TOTAL REVENUES | 820 | 899 |
Expenses | ||
Fuel and Other Consumables Used for Electric Generation | 150.7 | 223.3 |
Purchased Electricity for Resale | 108.2 | 112.7 |
Other Operation | 120.6 | 106.1 |
Maintenance | 69.3 | 52.3 |
Depreciation and Amortization | 95.5 | 100.1 |
Taxes Other Than Income Taxes | 31.3 | 31 |
TOTAL EXPENSES | 575.6 | 625.5 |
Operating Income (Loss) | 244.4 | 273.5 |
Other Income (Expense): | ||
Allowance for Equity Funds Used During Construction | 2.3 | 3 |
Other Income | 1.8 | 3.7 |
Interest Expense | (47) | (50.3) |
INCOME BEFORE INCOME TAX EXPENSE | 199.2 | 226.9 |
Income Tax Expense (Credit) | 72.9 | 85.1 |
Net Income (Loss) | 126.3 | 141.8 |
Indiana Michigan Power Co [Member] | ||
Revenues | ||
Vertically Integrated Utilities | 500.4 | 566.2 |
Sales to AEP Affiliates | 11.5 | 0.5 |
Other Revenues - Affiliated | 15.3 | 18.6 |
Other Revenues | 5.5 | 1 |
TOTAL REVENUES | 532.7 | 586.3 |
Expenses | ||
Fuel and Other Consumables Used for Electric Generation | 69.2 | 99.9 |
Purchased Electricity for Resale | 49.6 | 55.9 |
Purchased Electricity from AEP Affiliates | 45.4 | 55 |
Other Operation | 141.3 | 129 |
Maintenance | 40.9 | 47.3 |
Depreciation and Amortization | 47.1 | 51.4 |
Taxes Other Than Income Taxes | 23.4 | 23.4 |
TOTAL EXPENSES | 416.9 | 461.9 |
Operating Income (Loss) | 115.8 | 124.4 |
Other Income (Expense): | ||
Interest Income | 3.2 | 1.8 |
Allowance for Equity Funds Used During Construction | 2.3 | 4 |
Interest Expense | (22.5) | (22.8) |
INCOME BEFORE INCOME TAX EXPENSE | 98.8 | 107.4 |
Income Tax Expense (Credit) | 24.1 | 34.7 |
Net Income (Loss) | 74.7 | 72.7 |
Ohio Power Co [Member] | ||
Revenues | ||
Transmission and Distribution Utilities | 756.7 | 874.2 |
Sales to AEP Affiliates | 4.8 | 42.1 |
Other Revenues | 2.1 | 2.1 |
TOTAL REVENUES | 763.6 | 918.4 |
Expenses | ||
Purchased Electricity for Resale | 164.9 | 142.1 |
Purchased Electricity from AEP Affiliates | 49.1 | 270.6 |
Amortization Of Generation Deferrals | 55.1 | 31.4 |
Other Operation | 167.9 | 146.8 |
Maintenance | 33.7 | 47.6 |
Depreciation and Amortization | 61.3 | 59.2 |
Taxes Other Than Income Taxes | 97.6 | 97.8 |
TOTAL EXPENSES | 629.6 | 795.5 |
Operating Income (Loss) | 134 | 122.9 |
Other Income (Expense): | ||
Interest Income | 1.5 | 1.9 |
Carrying Costs Income | 1.9 | 6.5 |
Allowance for Equity Funds Used During Construction | 1.7 | 2.4 |
Interest Expense | (31.4) | (32.4) |
INCOME BEFORE INCOME TAX EXPENSE | 107.7 | 101.3 |
Income Tax Expense (Credit) | 37.5 | 35.9 |
Net Income (Loss) | 70.2 | 65.4 |
Public Service Co Of Oklahoma [Member] | ||
Revenues | ||
Vertically Integrated Utilities | 271.8 | 304.7 |
Sales to AEP Affiliates | 1 | 1.3 |
Other Revenues | 1.5 | 0.8 |
TOTAL REVENUES | 274.3 | 306.8 |
Expenses | ||
Fuel and Other Consumables Used for Electric Generation | 15.5 | 85.6 |
Purchased Electricity for Resale | 93.3 | 65.5 |
Other Operation | 62.9 | 60.8 |
Maintenance | 21.8 | 21.2 |
Depreciation and Amortization | 35.3 | 29.5 |
Taxes Other Than Income Taxes | 9.7 | 9.3 |
TOTAL EXPENSES | 238.5 | 271.9 |
Operating Income (Loss) | 35.8 | 34.9 |
Other Income (Expense): | ||
Interest Income | 0.2 | 0.1 |
Allowance for Equity Funds Used During Construction | 2.3 | 1.3 |
Interest Expense | (14.4) | (14.6) |
INCOME BEFORE INCOME TAX EXPENSE | 23.9 | 21.7 |
Income Tax Expense (Credit) | 8.2 | 8 |
Net Income (Loss) | 15.7 | 13.7 |
Southwestern Electric Power Co [Member] | ||
Revenues | ||
Vertically Integrated Utilities | 375.4 | 428.5 |
Sales to AEP Affiliates | 3.1 | 2.7 |
Other Revenues | 0.5 | 0.5 |
TOTAL REVENUES | 379 | 431.7 |
Expenses | ||
Fuel and Other Consumables Used for Electric Generation | 121.9 | 157.7 |
Purchased Electricity for Resale | 28.1 | 20 |
Other Operation | 77.1 | 65.6 |
Maintenance | 31.1 | 27.4 |
Depreciation and Amortization | 47.5 | 47 |
Taxes Other Than Income Taxes | 21.9 | 21.7 |
TOTAL EXPENSES | 327.6 | 339.4 |
Operating Income (Loss) | 51.4 | 92.3 |
Other Income (Expense): | ||
Allowance for Equity Funds Used During Construction | 7.4 | 5.2 |
Other Income | 7.4 | 5.2 |
Interest Expense | (27.9) | (30.2) |
INCOME BEFORE INCOME TAX EXPENSE | 30.9 | 67.3 |
Income Tax Expense (Credit) | 7.4 | 21.2 |
Equity Earnings (Loss) of Unconsolidated Subsidiaries | 1 | 0.6 |
Net Income (Loss) | 24.5 | 46.7 |
Net Income Attributable to Noncontrolling Interests | 1.1 | 1 |
Earnings Attributable to Common Shareholders | $ 23.4 | $ 45.7 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Net Income (Loss) | $ 503.1 | $ 630.7 |
OTHER COMPREHENSIVE INCOME | ||
Cash Flow Hedges, Net of Tax | (7.4) | (6.4) |
Securities Available for Sale, Net of Tax | 0.6 | 0.5 |
Amortization of Pension and OPEB Deferred Costs, Net of Tax | 0.1 | 0.4 |
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) | (6.7) | (5.5) |
TOTAL COMPREHENSIVE INCOME (LOSS) | 496.4 | 625.2 |
Total Comprehensive Income Attributable to Noncontrolling Interest | 1.9 | 1.5 |
TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS | 494.5 | 623.7 |
Appalachian Power Co [Member] | ||
Net Income (Loss) | 126.3 | 141.8 |
OTHER COMPREHENSIVE INCOME | ||
Cash Flow Hedges, Net of Tax | (0.2) | 0.1 |
Amortization of Pension and OPEB Deferred Costs, Net of Tax | (0.3) | (0.4) |
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) | (0.5) | (0.3) |
TOTAL COMPREHENSIVE INCOME (LOSS) | 125.8 | 141.5 |
Indiana Michigan Power Co [Member] | ||
Net Income (Loss) | 74.7 | 72.7 |
OTHER COMPREHENSIVE INCOME | ||
Cash Flow Hedges, Net of Tax | 0.4 | 0.3 |
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) | 0.4 | 0.3 |
TOTAL COMPREHENSIVE INCOME (LOSS) | 75.1 | 73 |
Ohio Power Co [Member] | ||
Net Income (Loss) | 70.2 | 65.4 |
OTHER COMPREHENSIVE INCOME | ||
Cash Flow Hedges, Net of Tax | (0.4) | (0.3) |
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) | (0.4) | (0.3) |
TOTAL COMPREHENSIVE INCOME (LOSS) | 69.8 | 65.1 |
Public Service Co Of Oklahoma [Member] | ||
Net Income (Loss) | 15.7 | 13.7 |
OTHER COMPREHENSIVE INCOME | ||
Cash Flow Hedges, Net of Tax | (0.2) | (0.2) |
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) | (0.2) | (0.2) |
TOTAL COMPREHENSIVE INCOME (LOSS) | 15.5 | 13.5 |
Southwestern Electric Power Co [Member] | ||
Net Income (Loss) | 24.5 | 46.7 |
OTHER COMPREHENSIVE INCOME | ||
Cash Flow Hedges, Net of Tax | 0.5 | 0.6 |
Amortization of Pension and OPEB Deferred Costs, Net of Tax | (0.2) | (0.3) |
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) | 0.3 | 0.3 |
TOTAL COMPREHENSIVE INCOME (LOSS) | 24.8 | 47 |
Total Comprehensive Income Attributable to Noncontrolling Interest | 1.1 | 1 |
TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ 23.7 | $ 46 |
Consolidated Statements of Com4
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash Flow Hedges, Tax | $ (4) | $ (3.4) |
Securities Available for Sale, Tax | 0.3 | 0.3 |
Amortization of Pension and OPEB Deferred Costs, Tax | 0.1 | 0.2 |
Appalachian Power Co [Member] | ||
Cash Flow Hedges, Tax | (0.1) | 0.1 |
Amortization of Pension and OPEB Deferred Costs, Tax | (0.2) | (0.2) |
Indiana Michigan Power Co [Member] | ||
Cash Flow Hedges, Tax | 0.2 | 0.1 |
Ohio Power Co [Member] | ||
Cash Flow Hedges, Tax | (0.2) | (0.2) |
Public Service Co Of Oklahoma [Member] | ||
Cash Flow Hedges, Tax | (0.1) | (0.1) |
Southwestern Electric Power Co [Member] | ||
Cash Flow Hedges, Tax | 0.2 | 0.3 |
Amortization of Pension and OPEB Deferred Costs, Tax | $ (0.1) | $ (0.1) |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Millions | Total | Appalachian Power Co [Member] | Indiana Michigan Power Co [Member] | Ohio Power Co [Member] | Public Service Co Of Oklahoma [Member] | Southwestern Electric Power Co [Member] | Common Stock [Member] | Common Stock [Member]Appalachian Power Co [Member] | Common Stock [Member]Indiana Michigan Power Co [Member] | Common Stock [Member]Ohio Power Co [Member] | Common Stock [Member]Public Service Co Of Oklahoma [Member] | Common Stock [Member]Southwestern Electric Power Co [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member]Appalachian Power Co [Member] | Additional Paid-in Capital [Member]Indiana Michigan Power Co [Member] | Additional Paid-in Capital [Member]Ohio Power Co [Member] | Additional Paid-in Capital [Member]Public Service Co Of Oklahoma [Member] | Additional Paid-in Capital [Member]Southwestern Electric Power Co [Member] | Retained Earnings [Member] | Retained Earnings [Member]Appalachian Power Co [Member] | Retained Earnings [Member]Indiana Michigan Power Co [Member] | Retained Earnings [Member]Ohio Power Co [Member] | Retained Earnings [Member]Public Service Co Of Oklahoma [Member] | Retained Earnings [Member]Southwestern Electric Power Co [Member] | Accumulated Other Comprehensive Income [Member] | Accumulated Other Comprehensive Income [Member]Appalachian Power Co [Member] | Accumulated Other Comprehensive Income [Member]Indiana Michigan Power Co [Member] | Accumulated Other Comprehensive Income [Member]Ohio Power Co [Member] | Accumulated Other Comprehensive Income [Member]Public Service Co Of Oklahoma [Member] | Accumulated Other Comprehensive Income [Member]Southwestern Electric Power Co [Member] | Noncontrolling Interests [Member] | Noncontrolling Interests [Member]Southwestern Electric Power Co [Member] |
Beginning Balance at Dec. 31, 2014 | $ 16,824.5 | $ 3,366.9 | $ 1,954 | $ 1,980.2 | $ 1,028.2 | $ 2,097.2 | $ 3,313.3 | $ 260.4 | $ 56.6 | $ 321.2 | $ 157.2 | $ 135.7 | $ 6,203.4 | $ 1,809.6 | $ 980.9 | $ 838.8 | $ 364 | $ 674.6 | $ 7,406.6 | $ 1,291.9 | $ 930.8 | $ 814.6 | $ 502 | $ 1,294 | $ (103.1) | $ 5 | $ (14.3) | $ 5.6 | $ 5 | $ (7.5) | $ 4.3 | $ 0.4 |
Beginning Balance, Shares at Dec. 31, 2014 | 509,700,000 | |||||||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||||||||
Issuance of Common Stock, Value | 30.4 | $ 3.4 | 27 | |||||||||||||||||||||||||||||
Issuance of Common Stock, Shares | 600,000 | |||||||||||||||||||||||||||||||
Common Stock Dividends | (261) | $ (259.9) | ||||||||||||||||||||||||||||||
Common Stock Dividends | (56.3) | (30) | (37.5) | (30) | (56.3) | (30) | (37.5) | (30) | ||||||||||||||||||||||||
Common Stock Dividends | (1) | (1.1) | (1) | |||||||||||||||||||||||||||||
Other Changes in Equity | 5.6 | 3.6 | 2 | |||||||||||||||||||||||||||||
Deferred State Income Tax Rate Adjustment | 16.8 | 16.8 | ||||||||||||||||||||||||||||||
Net Income (Loss) | $ 629.2 | 45.7 | ||||||||||||||||||||||||||||||
Net Income Attributable to Noncontrolling Interests | 1.5 | 1 | 1.5 | 1 | ||||||||||||||||||||||||||||
Net Income (Loss) | 630.7 | 141.8 | 72.7 | 65.4 | 13.7 | 46.7 | 141.8 | 72.7 | 65.4 | 13.7 | ||||||||||||||||||||||
Other Comprehensive Income (Loss) | (5.5) | (0.3) | 0.3 | (0.3) | (0.2) | 0.3 | (5.5) | (0.3) | 0.3 | (0.3) | (0.2) | 0.3 | ||||||||||||||||||||
Pension and OPEB Adjustment Related to Mitchell Plant | 5.1 | 5.1 | ||||||||||||||||||||||||||||||
Ending Balance at Mar. 31, 2015 | 17,246.6 | 3,452.1 | 1,997 | 2,007.8 | 1,041.7 | 2,113.2 | $ 3,316.7 | 260.4 | 56.6 | 321.2 | 157.2 | 135.7 | 6,250.8 | 1,809.6 | 980.9 | 838.8 | 364 | 674.6 | 7,775.9 | 1,377.4 | 973.5 | 842.5 | 515.7 | 1,309.7 | (103.5) | 4.7 | (14) | 5.3 | 4.8 | (7.2) | 6.7 | 0.4 |
Ending Balance, Shares at Mar. 31, 2015 | 510,300,000 | |||||||||||||||||||||||||||||||
Beginning Balance at Dec. 31, 2015 | $ 17,904.9 | 3,475 | 2,036.4 | 1,986.6 | $ 1,119.9 | 2,169.7 | $ 3,324 | 260.4 | 56.6 | 321.2 | 157.2 | 135.7 | 6,296.5 | 1,828.7 | 980.9 | 838.8 | 364 | 676.6 | 8,398.3 | 1,388.7 | 1,015.6 | 822.3 | 594.5 | 1,366.3 | (127.1) | (2.8) | (16.7) | 4.3 | 4.2 | (9.4) | 13.2 | 0.5 |
Beginning Balance, Shares at Dec. 31, 2015 | 511,389,173 | 10,482,000 | 511,400,000 | |||||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||||||||
Issuance of Common Stock, Value | $ 12.1 | $ 1.3 | 10.8 | |||||||||||||||||||||||||||||
Issuance of Common Stock, Shares | 200,000 | |||||||||||||||||||||||||||||||
Common Stock Dividends | (276.5) | (275.3) | ||||||||||||||||||||||||||||||
Common Stock Dividends | (75) | (31.3) | (75) | (30) | (75) | (31.3) | (75) | (30) | ||||||||||||||||||||||||
Common Stock Dividends | (1.2) | (1.2) | (1.2) | |||||||||||||||||||||||||||||
Other Changes in Equity | 4.8 | 2.9 | 0.6 | 1.3 | ||||||||||||||||||||||||||||
Net Income (Loss) | 501.2 | 23.4 | ||||||||||||||||||||||||||||||
Net Income Attributable to Noncontrolling Interests | 1.9 | 1.1 | 1.9 | 1.1 | ||||||||||||||||||||||||||||
Net Income (Loss) | 503.1 | 126.3 | 74.7 | 70.2 | $ 15.7 | 24.5 | 126.3 | 74.7 | 70.2 | 15.7 | ||||||||||||||||||||||
Other Comprehensive Income (Loss) | (6.7) | (0.5) | 0.4 | (0.4) | (0.2) | 0.3 | (6.7) | (0.5) | 0.4 | (0.4) | (0.2) | 0.3 | ||||||||||||||||||||
Ending Balance at Mar. 31, 2016 | $ 18,141.7 | $ 3,525.8 | $ 2,080.2 | $ 1,981.4 | $ 1,135.4 | $ 2,163.3 | $ 3,325.3 | $ 260.4 | $ 56.6 | $ 321.2 | $ 157.2 | $ 135.7 | $ 6,310.2 | $ 1,828.7 | $ 980.9 | $ 838.8 | $ 364 | $ 676.6 | $ 8,624.8 | $ 1,440 | $ 1,059 | $ 817.5 | $ 610.2 | $ 1,359.7 | $ (133.8) | $ (3.3) | $ (16.3) | $ 3.9 | $ 4 | $ (9.1) | $ 15.2 | $ 0.4 |
Ending Balance, Shares at Mar. 31, 2016 | 511,579,970 | 10,482,000 | 511,600,000 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 | |
Current Assets | |||
Cash and Cash Equivalents | $ 190.4 | $ 176.4 | |
Other Temporary Investments | 264.5 | 386.8 | |
Accounts Receivable: | |||
Customers | 651.2 | 615.9 | |
Accrued Unbilled Revenues | 91.1 | 31.2 | |
Pledged Accounts Receivable - AEP Credit | 870.7 | 940.3 | |
Miscellaneous | 72.3 | 82.1 | |
Allowance for Uncollectible Accounts | (35.3) | (29) | |
Total Accounts Receivable | 1,650 | 1,640.5 | |
Fuel | 701.6 | 600.8 | |
Materials and Supplies | 650.3 | 738.6 | |
Risk Management Assets | 143.8 | 134.4 | |
Accrued Tax Benefits | 226.1 | 58.9 | |
Regulatory Asset for Under-Recovered Fuel Costs | 102.3 | 115.2 | |
Margin Deposits | 81.3 | 107.3 | |
Prepayments and Other Current Assets | 136 | 113.5 | |
TOTAL CURRENT ASSETS | 4,146.3 | 4,072.4 | |
Property, Plant and Equipment | |||
Generation | 26,145 | 25,559.8 | |
Transmission | 14,435.3 | 14,247.9 | |
Distribution | 18,231.3 | 18,046.9 | |
Other Property, Plant and Equipment | 3,812.3 | 3,722.9 | |
Construction Work in Progress | 3,806.3 | 3,903.9 | |
Total Property, Plant and Equipment | 66,430.2 | 65,481.4 | |
Accumulated Depreciation and Amortization | 19,597.3 | 19,348.2 | |
TOTAL PROPERTY, PLANT AND EQUIPMENT - NET | 46,832.9 | 46,133.2 | |
Other Noncurrent Assets | |||
Regulatory Assets | 5,109.5 | 5,140.3 | |
Securitized Assets | 1,689.2 | 1,749.9 | |
Spent Nuclear Fuel and Decommissioning Trusts | 2,152.4 | 2,106.4 | |
Goodwill | 52.5 | 52.5 | |
Long-term Risk Management Assets | 328.9 | 321.8 | |
Deferred Charges and Other Noncurrent Assets | 2,174.8 | 2,106.6 | |
TOTAL OTHER NONCURRENT ASSETS | 11,507.3 | 11,477.5 | |
TOTAL ASSETS | 62,486.5 | 61,683.1 | |
Current Liabilities | |||
Accounts Payable | 1,219.5 | 1,418 | |
Short-term Debt: | |||
Securitized Debt for Receivables - AEP Credit | [1] | 719 | 675 |
Other Short-term Debt | 502 | 125 | |
Total Short-term Debt | 1,221 | 800 | |
Long-term Debt Due Within One Year | 2,033.3 | 1,831.8 | |
Long-term Debt Due Within One Year - Affiliated | 0 | 0 | |
Risk Management Liabilities | 104.3 | 87.1 | |
Customer Deposits | 358.1 | 346.6 | |
Accrued Taxes | 899.5 | 979.1 | |
Accrued Interest | 237.6 | 226.9 | |
Regulatory Liability for Over-Recovered Fuel Costs | 93 | 113.9 | |
Other Current Liabilities | 1,055.6 | 1,305.1 | |
TOTAL CURRENT LIABILITIES | 7,221.9 | 7,108.5 | |
Noncurrent Liabilities | |||
Long-term Debt | 17,749.3 | 17,740.9 | |
Long-term Debt - Affiliated | 0 | 0 | |
Long-term Risk Management Liabilities | 207.6 | 179.1 | |
Deferred Income Taxes | 12,133.8 | 11,733.2 | |
Regulatory Liabilities and Deferred Investment Tax Credits | 3,765.2 | 3,736.1 | |
Asset Retirement Obligations | 1,824.4 | 1,806.5 | |
Employee Benefits and Pension Obligations | 569.9 | 583.3 | |
Deferred Credits and Other Noncurrent Liabilities | 872.7 | 890.6 | |
TOTAL NONCURRENT LIABILITIES | 37,122.9 | 36,669.7 | |
TOTAL LIABILITIES | $ 44,344.8 | $ 43,778.2 | |
Rate Matters | |||
Commitments and Contingencies | |||
Equity | |||
Common Stock | $ 3,325.3 | $ 3,324 | |
Paid-in Capital | 6,310.2 | 6,296.5 | |
Retained Earnings | 8,624.8 | 8,398.3 | |
Accumulated Other Comprehensive Income (Loss) | (133.8) | (127.1) | |
TOTAL COMMON SHAREHOLDER'S EQUITY | 18,126.5 | 17,891.7 | |
Noncontrolling Interests | 15.2 | 13.2 | |
TOTAL EQUITY | 18,141.7 | 17,904.9 | |
TOTAL LIABILITIES AND EQUITY | 62,486.5 | 61,683.1 | |
Appalachian Power Co [Member] | |||
Current Assets | |||
Cash and Cash Equivalents | 6.4 | 2.8 | |
Restricted Cash for Securitized Funding | 7.5 | 14.8 | |
Advances to Affiliates | 24.8 | 25.6 | |
Accounts Receivable: | |||
Customers | 130.4 | 120.9 | |
Affiliated Companies | 49.2 | 51.2 | |
Accrued Unbilled Revenues | 37.1 | 17.9 | |
Miscellaneous | 2 | 2.2 | |
Allowance for Uncollectible Accounts | (4.7) | (4.3) | |
Total Accounts Receivable | 214 | 187.9 | |
Fuel | 147.7 | 119.3 | |
Materials and Supplies | 104.1 | 127 | |
Risk Management Assets | 11.2 | 14.7 | |
Risk Management Assets, Affiliated | 0.7 | 0.9 | |
Accrued Tax Benefits | 5.4 | 30.6 | |
Regulatory Asset for Under-Recovered Fuel Costs | 82.2 | 86.9 | |
Prepayments and Other Current Assets | 21.4 | 17.4 | |
TOTAL CURRENT ASSETS | 625.4 | 627.9 | |
Property, Plant and Equipment | |||
Generation | 6,251.2 | 6,200.8 | |
Transmission | 2,414.6 | 2,408.1 | |
Distribution | 3,432.8 | 3,402.5 | |
Other Property, Plant and Equipment | 357.2 | 345.5 | |
Construction Work in Progress | 507 | 475.1 | |
Total Property, Plant and Equipment | 12,962.8 | 12,832 | |
Accumulated Depreciation and Amortization | 3,473.5 | 3,407.6 | |
TOTAL PROPERTY, PLANT AND EQUIPMENT - NET | 9,489.3 | 9,424.4 | |
Other Noncurrent Assets | |||
Regulatory Assets | 1,125.7 | 1,154.2 | |
Securitized Assets | 322.4 | 328 | |
Long-term Risk Management Assets | 0.3 | 0.1 | |
Deferred Charges and Other Noncurrent Assets | 139 | 113.7 | |
TOTAL OTHER NONCURRENT ASSETS | 1,587.4 | 1,596 | |
TOTAL ASSETS | 11,702.1 | 11,648.3 | |
Current Liabilities | |||
Advances from Affiliates | 171.2 | 181 | |
Accounts Payable | 182 | 196.5 | |
Affiliated Companies | 62.1 | 67.7 | |
Short-term Debt: | |||
Long-term Debt Due Within One Year | 318.3 | 318 | |
Risk Management Liabilities | 10.4 | 4.8 | |
Customer Deposits | 82.7 | 83.9 | |
Accrued Taxes | 108.8 | 79.5 | |
Accrued Interest | 62.9 | 40.6 | |
Other Current Liabilities | 120.5 | 153.4 | |
TOTAL CURRENT LIABILITIES | 1,118.9 | 1,125.4 | |
Noncurrent Liabilities | |||
Long-term Debt | 3,601 | 3,612.7 | |
Long-term Risk Management Liabilities | 0.1 | 0.1 | |
Deferred Income Taxes | 2,558.5 | 2,527 | |
Regulatory Liabilities and Deferred Investment Tax Credits | 628.7 | 637.1 | |
Asset Retirement Obligations | 94.9 | 98.9 | |
Employee Benefits and Pension Obligations | 112.1 | 114.4 | |
Deferred Credits and Other Noncurrent Liabilities | 62.1 | 57.7 | |
TOTAL NONCURRENT LIABILITIES | 7,057.4 | 7,047.9 | |
TOTAL LIABILITIES | $ 8,176.3 | $ 8,173.3 | |
Rate Matters | |||
Commitments and Contingencies | |||
Equity | |||
Common Stock | $ 260.4 | $ 260.4 | |
Paid-in Capital | 1,828.7 | 1,828.7 | |
Retained Earnings | 1,440 | 1,388.7 | |
Accumulated Other Comprehensive Income (Loss) | (3.3) | (2.8) | |
TOTAL EQUITY | 3,525.8 | 3,475 | |
TOTAL LIABILITIES AND EQUITY | 11,702.1 | 11,648.3 | |
Indiana Michigan Power Co [Member] | |||
Current Assets | |||
Cash and Cash Equivalents | 3.3 | 1.1 | |
Advances to Affiliates | 12.3 | 11.7 | |
Accounts Receivable: | |||
Customers | 54.6 | 43.9 | |
Affiliated Companies | 58.6 | 68.7 | |
Accrued Unbilled Revenues | 1.3 | 0.1 | |
Miscellaneous | 1.4 | 2.6 | |
Allowance for Uncollectible Accounts | 0 | (0.1) | |
Total Accounts Receivable | 115.9 | 115.2 | |
Fuel | 63.7 | 46.5 | |
Materials and Supplies | 155 | 185.9 | |
Risk Management Assets | 8.4 | 10.6 | |
Risk Management Assets, Affiliated | 0.7 | 1.7 | |
Accrued Tax Benefits | 47 | 40.5 | |
Prepayments and Other Current Assets | 50.9 | 42.1 | |
TOTAL CURRENT ASSETS | 457.2 | 455.3 | |
Property, Plant and Equipment | |||
Generation | 3,899 | 3,841.7 | |
Transmission | 1,410.2 | 1,406.9 | |
Distribution | 1,811.6 | 1,790.8 | |
Other Property, Plant and Equipment | 672.5 | 662.3 | |
Construction Work in Progress | 547.9 | 519.8 | |
Total Property, Plant and Equipment | 8,341.2 | 8,221.5 | |
Accumulated Depreciation and Amortization | 3,048.3 | 3,018 | |
TOTAL PROPERTY, PLANT AND EQUIPMENT - NET | 5,292.9 | 5,203.5 | |
Other Noncurrent Assets | |||
Regulatory Assets | 813.8 | 804.3 | |
Spent Nuclear Fuel and Decommissioning Trusts | 2,152.4 | 2,106.4 | |
Long-term Risk Management Assets | 0.4 | 0 | |
Deferred Charges and Other Noncurrent Assets | 161.3 | 140.9 | |
TOTAL OTHER NONCURRENT ASSETS | 3,127.9 | 3,051.6 | |
TOTAL ASSETS | 8,878 | 8,710.4 | |
Current Liabilities | |||
Advances from Affiliates | 9.5 | 294.3 | |
Accounts Payable | 176.3 | 201 | |
Affiliated Companies | 47.8 | 61.8 | |
Short-term Debt: | |||
Long-term Debt Due Within One Year | 151.5 | 162.9 | |
Risk Management Liabilities | 6.4 | 6.3 | |
Customer Deposits | 35.6 | 35.7 | |
Accrued Taxes | 83.2 | 74.2 | |
Accrued Interest | 12.2 | 26.2 | |
Obligations Under Capital Leases | 25.2 | 32.8 | |
Other Current Liabilities | 118.2 | 142.1 | |
TOTAL CURRENT LIABILITIES | 665.9 | 1,037.3 | |
Noncurrent Liabilities | |||
Long-term Debt | 2,215.1 | 1,837.1 | |
Long-term Risk Management Liabilities | 1 | 1.6 | |
Deferred Income Taxes | 1,421 | 1,361.5 | |
Regulatory Liabilities and Deferred Investment Tax Credits | 1,104.6 | 1,076.2 | |
Asset Retirement Obligations | 1,264.8 | 1,240.9 | |
Deferred Credits and Other Noncurrent Liabilities | 125.4 | 119.4 | |
TOTAL NONCURRENT LIABILITIES | 6,131.9 | 5,636.7 | |
TOTAL LIABILITIES | $ 6,797.8 | $ 6,674 | |
Rate Matters | |||
Commitments and Contingencies | |||
Equity | |||
Common Stock | $ 56.6 | $ 56.6 | |
Paid-in Capital | 980.9 | 980.9 | |
Retained Earnings | 1,059 | 1,015.6 | |
Accumulated Other Comprehensive Income (Loss) | (16.3) | (16.7) | |
TOTAL EQUITY | 2,080.2 | 2,036.4 | |
TOTAL LIABILITIES AND EQUITY | 8,878 | 8,710.4 | |
Ohio Power Co [Member] | |||
Current Assets | |||
Cash and Cash Equivalents | 9.3 | 3.1 | |
Restricted Cash for Securitized Funding | 16.2 | 27.7 | |
Advances to Affiliates | 221.9 | 331.1 | |
Accounts Receivable: | |||
Customers | 43 | 46.4 | |
Affiliated Companies | 60 | 64.3 | |
Accrued Unbilled Revenues | 13.3 | 1.4 | |
Miscellaneous | 1.1 | 0.4 | |
Allowance for Uncollectible Accounts | (0.4) | (0.2) | |
Total Accounts Receivable | 117 | 112.3 | |
Materials and Supplies | 71 | 86.1 | |
Prepayments and Other Current Assets | 12.1 | 12.9 | |
TOTAL CURRENT ASSETS | 447.5 | 573.2 | |
Property, Plant and Equipment | |||
Transmission | 2,267.1 | 2,235.6 | |
Distribution | 4,324.8 | 4,287.7 | |
Other Property, Plant and Equipment | 423.1 | 408.2 | |
Construction Work in Progress | 160.2 | 171.9 | |
Total Property, Plant and Equipment | 7,175.2 | 7,103.4 | |
Accumulated Depreciation and Amortization | 2,070.4 | 2,048.7 | |
TOTAL PROPERTY, PLANT AND EQUIPMENT - NET | 5,104.8 | 5,054.7 | |
Other Noncurrent Assets | |||
Notes Receivable - Affiliated | 32.3 | 32.3 | |
Regulatory Assets | 1,056.5 | 1,113 | |
Securitized Assets | 79.9 | 85.9 | |
Long-term Risk Management Assets | 0 | 19.2 | |
Deferred Charges and Other Noncurrent Assets | 225.9 | 259.6 | |
TOTAL OTHER NONCURRENT ASSETS | 1,394.6 | 1,510 | |
TOTAL ASSETS | 6,946.9 | 7,137.9 | |
Current Liabilities | |||
Accounts Payable | 131.5 | 156.4 | |
Affiliated Companies | 74.6 | 88.7 | |
Short-term Debt: | |||
Long-term Debt Due Within One Year | 395.6 | 395.9 | |
Risk Management Liabilities | 5.5 | 3.6 | |
Customer Deposits | 89.4 | 65.4 | |
Accrued Taxes | 379.1 | 528.3 | |
Accrued Interest | 45.4 | 33 | |
Other Current Liabilities | 118.8 | 154.3 | |
TOTAL CURRENT LIABILITIES | 1,239.9 | 1,425.6 | |
Noncurrent Liabilities | |||
Long-term Debt | 1,739.9 | 1,761.8 | |
Long-term Risk Management Liabilities | 5.8 | 0 | |
Deferred Income Taxes | 1,395.1 | 1,383.2 | |
Regulatory Liabilities and Deferred Investment Tax Credits | 521.2 | 514.2 | |
Employee Benefits and Pension Obligations | 35.6 | 35.8 | |
Deferred Credits and Other Noncurrent Liabilities | 28 | 30.7 | |
TOTAL NONCURRENT LIABILITIES | 3,725.6 | 3,725.7 | |
TOTAL LIABILITIES | $ 4,965.5 | $ 5,151.3 | |
Rate Matters | |||
Commitments and Contingencies | |||
Equity | |||
Common Stock | $ 321.2 | $ 321.2 | |
Paid-in Capital | 838.8 | 838.8 | |
Retained Earnings | 817.5 | 822.3 | |
Accumulated Other Comprehensive Income (Loss) | 3.9 | 4.3 | |
TOTAL EQUITY | 1,981.4 | 1,986.6 | |
TOTAL LIABILITIES AND EQUITY | 6,946.9 | 7,137.9 | |
Public Service Co Of Oklahoma [Member] | |||
Current Assets | |||
Cash and Cash Equivalents | 3.2 | 1.4 | |
Advances to Affiliates | 8.4 | 80.6 | |
Accounts Receivable: | |||
Customers | 26.5 | 26 | |
Affiliated Companies | 16.2 | 20.8 | |
Miscellaneous | 2.5 | 3.3 | |
Allowance for Uncollectible Accounts | (0.7) | (0.6) | |
Total Accounts Receivable | 44.5 | 49.5 | |
Fuel | 21.2 | 17.6 | |
Materials and Supplies | 51.8 | 51.9 | |
Risk Management Assets | 0.7 | 0.6 | |
Accrued Tax Benefits | 34.8 | 37.3 | |
Prepayments and Other Current Assets | 6.6 | 6.5 | |
TOTAL CURRENT ASSETS | 171.2 | 245.4 | |
Property, Plant and Equipment | |||
Generation | 1,496.7 | 1,302.6 | |
Transmission | 822.4 | 815.4 | |
Distribution | 2,240.3 | 2,206.7 | |
Other Property, Plant and Equipment | 414.4 | 405.7 | |
Construction Work in Progress | 145.7 | 315.3 | |
Total Property, Plant and Equipment | 5,119.5 | 5,045.7 | |
Accumulated Depreciation and Amortization | 1,365.7 | 1,352.5 | |
TOTAL PROPERTY, PLANT AND EQUIPMENT - NET | 3,753.8 | 3,693.2 | |
Other Noncurrent Assets | |||
Regulatory Assets | 224.9 | 214.8 | |
Employee Benefits and Pension Assets | 11.1 | 10.6 | |
Deferred Charges and Other Noncurrent Assets | 32.1 | 6.4 | |
TOTAL OTHER NONCURRENT ASSETS | 268.1 | 231.8 | |
TOTAL ASSETS | 4,193.1 | 4,170.4 | |
Current Liabilities | |||
Accounts Payable | 87 | 108.2 | |
Affiliated Companies | 43.2 | 51.5 | |
Short-term Debt: | |||
Long-term Debt Due Within One Year | 275.4 | 275.4 | |
Risk Management Liabilities | 0.2 | 0.2 | |
Customer Deposits | 50.6 | 50.3 | |
Accrued Taxes | 38.7 | 23.6 | |
Accrued Interest | 14.5 | 15.1 | |
Regulatory Liability for Over-Recovered Fuel Costs | 67.8 | 76.1 | |
Other Current Liabilities | 60.8 | 64.4 | |
TOTAL CURRENT LIABILITIES | 638.2 | 664.8 | |
Noncurrent Liabilities | |||
Long-term Debt | 1,010.9 | 1,010.7 | |
Deferred Income Taxes | 1,005.1 | 971.8 | |
Regulatory Liabilities and Deferred Investment Tax Credits | 335.8 | 335.1 | |
Asset Retirement Obligations | 40.5 | 39.9 | |
Employee Benefits and Pension Obligations | 15 | 14.5 | |
Deferred Credits and Other Noncurrent Liabilities | 12.2 | 13.7 | |
TOTAL NONCURRENT LIABILITIES | 2,419.5 | 2,385.7 | |
TOTAL LIABILITIES | $ 3,057.7 | $ 3,050.5 | |
Rate Matters | |||
Commitments and Contingencies | |||
Equity | |||
Common Stock | $ 157.2 | $ 157.2 | |
Paid-in Capital | 364 | 364 | |
Retained Earnings | 610.2 | 594.5 | |
Accumulated Other Comprehensive Income (Loss) | 4 | 4.2 | |
TOTAL EQUITY | 1,135.4 | 1,119.9 | |
TOTAL LIABILITIES AND EQUITY | 4,193.1 | 4,170.4 | |
Southwestern Electric Power Co [Member] | |||
Current Assets | |||
Cash and Cash Equivalents | 12.3 | 5.2 | |
Advances to Affiliates | 2 | 2 | |
Accounts Receivable: | |||
Customers | 45.9 | 40.2 | |
Affiliated Companies | 20 | 22 | |
Miscellaneous | 21.3 | 27.1 | |
Allowance for Uncollectible Accounts | (1.4) | (0.9) | |
Total Accounts Receivable | 85.8 | 88.4 | |
Fuel | 129.3 | 142.1 | |
Materials and Supplies | 70.6 | 71.5 | |
Risk Management Assets | 0.8 | 0.8 | |
Accrued Tax Benefits | 37.3 | 0 | |
Regulatory Asset for Under-Recovered Fuel Costs | 2.5 | 4.1 | |
Prepayments and Other Current Assets | 27.8 | 21.2 | |
TOTAL CURRENT ASSETS | 368.4 | 335.3 | |
Property, Plant and Equipment | |||
Generation | 4,190.5 | 3,943.5 | |
Transmission | 1,396.4 | 1,387.8 | |
Distribution | 1,966.6 | 1,957.3 | |
Other Property, Plant and Equipment | 893.2 | 883.5 | |
Construction Work in Progress | 562.8 | 751.3 | |
Total Property, Plant and Equipment | 9,009.5 | 8,923.4 | |
Accumulated Depreciation and Amortization | 2,620.9 | 2,602.3 | |
TOTAL PROPERTY, PLANT AND EQUIPMENT - NET | 6,388.6 | 6,321.1 | |
Other Noncurrent Assets | |||
Regulatory Assets | 422 | 415.8 | |
Deferred Charges and Other Noncurrent Assets | 120.4 | 75.8 | |
TOTAL OTHER NONCURRENT ASSETS | 542.4 | 491.6 | |
TOTAL ASSETS | 7,299.4 | 7,148 | |
Current Liabilities | |||
Advances from Affiliates | 217.8 | 58.3 | |
Accounts Payable | 140.3 | 150.4 | |
Affiliated Companies | 61 | 78.8 | |
Short-term Debt: | |||
Long-term Debt Due Within One Year | 253.3 | 3.3 | |
Risk Management Liabilities | 3.5 | 3.1 | |
Customer Deposits | 62.5 | 61.4 | |
Accrued Taxes | 82.4 | 58.3 | |
Accrued Interest | 22.2 | 43 | |
Obligations Under Capital Leases | 25.3 | 21.9 | |
Other Current Liabilities | 86.6 | 110.7 | |
TOTAL CURRENT LIABILITIES | 954.9 | 589.2 | |
Noncurrent Liabilities | |||
Long-term Debt | 2,019.1 | 2,270.2 | |
Long-term Risk Management Liabilities | 1.8 | 2.1 | |
Deferred Income Taxes | 1,455.1 | 1,399.8 | |
Regulatory Liabilities and Deferred Investment Tax Credits | 447 | 448.8 | |
Asset Retirement Obligations | 114.4 | 117.5 | |
Employee Benefits and Pension Obligations | 28.1 | 25.8 | |
Obligations Under Capital Leases | 73.6 | 75.6 | |
Deferred Credits and Other Noncurrent Liabilities | 42.1 | 49.3 | |
TOTAL NONCURRENT LIABILITIES | 4,181.2 | 4,389.1 | |
TOTAL LIABILITIES | $ 5,136.1 | $ 4,978.3 | |
Rate Matters | |||
Commitments and Contingencies | |||
Equity | |||
Common Stock | $ 135.7 | $ 135.7 | |
Paid-in Capital | 676.6 | 676.6 | |
Retained Earnings | 1,359.7 | 1,366.3 | |
Accumulated Other Comprehensive Income (Loss) | (9.1) | (9.4) | |
TOTAL COMMON SHAREHOLDER'S EQUITY | 2,162.9 | 2,169.2 | |
Noncontrolling Interests | 0.4 | 0.5 | |
TOTAL EQUITY | 2,163.3 | 2,169.7 | |
TOTAL LIABILITIES AND EQUITY | $ 7,299.4 | $ 7,148 | |
[1] | Amount of securitized debt for receivables as accounted for under the “Transfers and Servicing” accounting guidance. |
Condensed Consolidated Balance7
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Current Assets | ||
Cash and Cash Equivalents | $ 190.4 | $ 176.4 |
Other Temporary Investments | 264.5 | 386.8 |
Fuel | 701.6 | 600.8 |
Property, Plant and Equipment | ||
Other Property, Plant and Equipment | 3,812.3 | 3,722.9 |
Accumulated Depreciation and Amortization | 19,597.3 | 19,348.2 |
Current Liabilities | ||
Long-term Debt Due Within One Year | 2,033.3 | 1,831.8 |
Noncurrent Liabilities | ||
Long-term Debt | $ 17,749.3 | $ 17,740.9 |
Equity | ||
Common Stock, Par Value Per Share | $ 6.50 | $ 6.50 |
Common Stock, Shares Authorized | 600,000,000 | 600,000,000 |
Common Stock, Shares, Issued | 511,579,970 | 511,389,173 |
Treasury Stock, Shares | 20,336,592 | 20,336,592 |
Appalachian Power Co [Member] | ||
Current Assets | ||
Cash and Cash Equivalents | $ 6.4 | $ 2.8 |
Fuel | 147.7 | 119.3 |
Property, Plant and Equipment | ||
Other Property, Plant and Equipment | 357.2 | 345.5 |
Accumulated Depreciation and Amortization | 3,473.5 | 3,407.6 |
Current Liabilities | ||
Long-term Debt Due Within One Year | 318.3 | 318 |
Noncurrent Liabilities | ||
Long-term Debt | $ 3,601 | $ 3,612.7 |
Equity | ||
Common Stock, Shares Authorized | 30,000,000 | 30,000,000 |
Common Stock, Shares Outstanding | 13,499,500 | 13,499,500 |
Indiana Michigan Power Co [Member] | ||
Current Assets | ||
Cash and Cash Equivalents | $ 3.3 | $ 1.1 |
Fuel | 63.7 | 46.5 |
Property, Plant and Equipment | ||
Other Property, Plant and Equipment | 672.5 | 662.3 |
Accumulated Depreciation and Amortization | 3,048.3 | 3,018 |
Current Liabilities | ||
Long-term Debt Due Within One Year | 151.5 | 162.9 |
Noncurrent Liabilities | ||
Long-term Debt | $ 2,215.1 | $ 1,837.1 |
Equity | ||
Common Stock, No Par Value | $ 0 | $ 0 |
Common Stock, Shares Authorized | 2,500,000 | 2,500,000 |
Common Stock, Shares Outstanding | 1,400,000 | 1,400,000 |
Indiana Michigan Power Co [Member] | DCC Fuel [Member] | ||
Current Liabilities | ||
Long-term Debt Due Within One Year | $ 73,200 | $ 84,600 |
Ohio Power Co [Member] | ||
Current Assets | ||
Cash and Cash Equivalents | 9.3 | 3.1 |
Property, Plant and Equipment | ||
Other Property, Plant and Equipment | 423.1 | 408.2 |
Accumulated Depreciation and Amortization | 2,070.4 | 2,048.7 |
Current Liabilities | ||
Long-term Debt Due Within One Year | 395.6 | 395.9 |
Noncurrent Liabilities | ||
Long-term Debt | $ 1,739.9 | $ 1,761.8 |
Equity | ||
Common Stock, No Par Value | $ 0 | $ 0 |
Common Stock, Shares Authorized | 40,000,000 | 40,000,000 |
Common Stock, Shares Outstanding | 27,952,473 | 27,952,473 |
Ohio Power Co [Member] | Ohio Phase-In-Recovery Funding [Member] | ||
Current Liabilities | ||
Long-term Debt Due Within One Year | $ 45.6 | $ 45.9 |
Noncurrent Liabilities | ||
Long-term Debt | 117.2 | 139.4 |
Public Service Co Of Oklahoma [Member] | ||
Current Assets | ||
Cash and Cash Equivalents | 3.2 | 1.4 |
Fuel | 21.2 | 17.6 |
Property, Plant and Equipment | ||
Other Property, Plant and Equipment | 414.4 | 405.7 |
Accumulated Depreciation and Amortization | 1,365.7 | 1,352.5 |
Current Liabilities | ||
Long-term Debt Due Within One Year | 275.4 | 275.4 |
Noncurrent Liabilities | ||
Long-term Debt | $ 1,010.9 | $ 1,010.7 |
Equity | ||
Common Stock, Par Value Per Share | $ 15 | $ 15 |
Common Stock, Shares Authorized | 11,000,000 | 11,000,000 |
Common Stock, Shares, Issued | 10,482,000 | 10,482,000 |
Common Stock, Shares Outstanding | 9,013,000 | 9,013,000 |
Southwestern Electric Power Co [Member] | ||
Current Assets | ||
Cash and Cash Equivalents | $ 12.3 | $ 5.2 |
Fuel | 129.3 | 142.1 |
Property, Plant and Equipment | ||
Other Property, Plant and Equipment | 893.2 | 883.5 |
Accumulated Depreciation and Amortization | 2,620.9 | 2,602.3 |
Current Liabilities | ||
Long-term Debt Due Within One Year | 253.3 | 3.3 |
Noncurrent Liabilities | ||
Long-term Debt | $ 2,019.1 | $ 2,270.2 |
Equity | ||
Common Stock, Par Value Per Share | $ 18 | $ 18 |
Common Stock, Shares Authorized | 7,600,000 | 7,600,000 |
Common Stock, Shares Outstanding | 7,536,640 | 7,536,640 |
Southwestern Electric Power Co [Member] | Sabine Mining Co [Member] | ||
Current Assets | ||
Cash and Cash Equivalents | $ 9.4 | $ 3.7 |
Fuel | 36.1 | 40.4 |
Property, Plant and Equipment | ||
Other Property, Plant and Equipment | 300.5 | 297.7 |
Accumulated Depreciation and Amortization | 161.1 | 157.3 |
AEP Subsidiaries [Member] | ||
Current Assets | ||
Other Temporary Investments | 250 | 376.6 |
Current Liabilities | ||
Long-term Debt Due Within One Year | 361 | 410.4 |
Noncurrent Liabilities | ||
Long-term Debt | $ 1,835.3 | $ 1,971.4 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Operating Activities | ||
Net Income (Loss) | $ 503.1 | $ 630.7 |
Income from Discontinued Operations | 0 | 10.5 |
Income from Continuing Operations | 503.1 | 620.2 |
Adjustments to Reconcile Net Income to Net Cash Flows from (Used for) Operating Activities: | ||
Depreciation and Amortization | 497.1 | 495.4 |
Deferred Income Taxes | 330.2 | 238.3 |
Carrying Costs Income | (3.9) | (8.4) |
Allowance for Equity Funds Used During Construction | (31.7) | (29.7) |
Mark-to-Market of Risk Management Contracts | 20.9 | (21) |
Amortization of Nuclear Fuel | 40.5 | 38.3 |
Property Taxes | (34.4) | (34.8) |
Fuel Over/Under-Recovery, Net | 10.6 | 3.4 |
Deferral of Ohio Capacity Costs, Net | 35.1 | (6.6) |
Change in Other Noncurrent Assets | (68.3) | 7.2 |
Change in Other Noncurrent Liabilities | 1.8 | (26.2) |
Changes in Certain Components of Working Capital: | ||
Accounts Receivable, Net | (10.8) | (2.3) |
Fuel, Materials and Supplies | (95.4) | 132.1 |
Accounts Payable | (34.4) | 45.8 |
Accrued Taxes, Net | (169.2) | 33.5 |
Other Current Assets | 21.6 | (24.4) |
Other Current Liabilities | (212.9) | (203.1) |
Net Cash Flows from (Used for) Operating Activities | 799.9 | 1,257.7 |
Investing Activities | ||
Construction Expenditures | (1,203.5) | (1,077) |
Change in Other Temporary Investments, Net | 122.8 | 93.5 |
Purchases of Investment Securities | (1,152) | (246.2) |
Sales of Investment Securities | 1,137.7 | 228.2 |
Acquisitions of Nuclear Fuel | (45.5) | (51.8) |
Other Investing Activities | 2.2 | 32.4 |
Net Cash Flows from (Used for) Investing Activities | (1,138.3) | (1,020.9) |
Financing Activities | ||
Issuance of Common Stock, Net | 12.1 | 30.4 |
Issuance of Long-term Debt | 525.1 | 773.8 |
Change in Short-term Debt, Net | 421 | (491) |
Retirement of Long-term Debt | (322.4) | (238.8) |
Principal Payments for Capital Lease Obligations | (24.9) | (27.6) |
Dividends Paid on Common Stock | (276.5) | (261) |
Other Financing Activities | 18 | 4.9 |
Net Cash Flows from (Used for) Financing Activities | 352.4 | (209.3) |
Net Cash Flows from (Used for) Discontinued Operating Activities | 0 | 0.2 |
Net Cash Flows from (Used for) Discontinued Investing Activities | 0 | 4.3 |
Net Cash Flows Used for Discontinued Financing Activities | 0 | (4.1) |
Net Increase (Decrease) in Cash and Cash Equivalents | 14 | 27.9 |
Cash and Cash Equivalents at Beginning of Period | 176.4 | 162.5 |
Cash and Cash Equivalents at End of Period | 190.4 | 190.4 |
Supplementary Information | ||
Cash Paid for Interest, Net of Capitalized Amounts | 199 | 222.6 |
Net Cash Paid (Received) for Income Taxes | 7.3 | 2.1 |
Noncash Acquisitions Under Capital Leases | 45.4 | 29.4 |
Construction Expenditures Included in Current Liabilities as of March 31, | 544.3 | 528.9 |
Construction Expenditures Included in Noncurrent Liabilities as of March 31, | 0 | 43.2 |
Acquisition of Nuclear Fuel Included in Current Liabilities as of March 31, | 29.1 | 0 |
Appalachian Power Co [Member] | ||
Operating Activities | ||
Net Income (Loss) | 126.3 | 141.8 |
Adjustments to Reconcile Net Income to Net Cash Flows from (Used for) Operating Activities: | ||
Depreciation and Amortization | 95.5 | 100.1 |
Deferred Income Taxes | 30.9 | 49.8 |
Allowance for Equity Funds Used During Construction | (2.3) | (3) |
Mark-to-Market of Risk Management Contracts | 9.1 | 9.8 |
Fuel Over/Under-Recovery, Net | 5.1 | (26.2) |
Change in Other Noncurrent Assets | 17.7 | 3 |
Change in Other Noncurrent Liabilities | (9) | (32) |
Changes in Certain Components of Working Capital: | ||
Accounts Receivable, Net | (26.1) | 7.3 |
Fuel, Materials and Supplies | (28.3) | 39.6 |
Accounts Payable | (2.9) | (2.2) |
Accrued Taxes, Net | 54.5 | 31.8 |
Other Current Assets | (4.1) | (3) |
Other Current Liabilities | (8.4) | (15.8) |
Net Cash Flows from (Used for) Operating Activities | 258 | 301 |
Investing Activities | ||
Construction Expenditures | (168.9) | (140.9) |
Change in Restricted Cash for Securitized Funding | 7.3 | 7.7 |
Change in Advances to Affiliates, Net | 0.8 | (103.6) |
Other Investing Activities | 4.1 | 5.3 |
Net Cash Flows from (Used for) Investing Activities | (156.7) | (231.5) |
Financing Activities | ||
Issuance of Long-term Debt | 124.8 | 0 |
Change in Advances from Affiliates, Net | (9.8) | 0 |
Retirement of Long-term Debt | (136.5) | (11) |
Principal Payments for Capital Lease Obligations | (1.5) | (1.3) |
Dividends Paid on Common Stock | (75) | (56.3) |
Other Financing Activities | 0.3 | 0.4 |
Net Cash Flows from (Used for) Financing Activities | (97.7) | (68.2) |
Net Increase (Decrease) in Cash and Cash Equivalents | 3.6 | 1.3 |
Cash and Cash Equivalents at Beginning of Period | 2.8 | 2.6 |
Cash and Cash Equivalents at End of Period | 6.4 | 3.9 |
Supplementary Information | ||
Cash Paid for Interest, Net of Capitalized Amounts | 23.1 | 37.3 |
Net Cash Paid (Received) for Income Taxes | (17.9) | 0.1 |
Noncash Acquisitions Under Capital Leases | 0.7 | 1.5 |
Construction Expenditures Included in Current Liabilities as of March 31, | 70.4 | 70 |
Indiana Michigan Power Co [Member] | ||
Operating Activities | ||
Net Income (Loss) | 74.7 | 72.7 |
Adjustments to Reconcile Net Income to Net Cash Flows from (Used for) Operating Activities: | ||
Depreciation and Amortization | 47.1 | 51.4 |
Deferred Income Taxes | 44 | 15.6 |
Deferral of Incremental Nuclear Refueling Outage Expenses, Net | 8.4 | 9.3 |
Allowance for Equity Funds Used During Construction | (2.3) | (4) |
Mark-to-Market of Risk Management Contracts | 2.4 | 12.4 |
Amortization of Nuclear Fuel | 40.5 | 38.3 |
Fuel Over/Under-Recovery, Net | 3.8 | (3) |
Change in Other Noncurrent Assets | (4.8) | 5.9 |
Change in Other Noncurrent Liabilities | 9.1 | (7.5) |
Changes in Certain Components of Working Capital: | ||
Accounts Receivable, Net | (2) | 31.9 |
Fuel, Materials and Supplies | (16) | 8.8 |
Accounts Payable | (9.9) | (0.2) |
Accrued Taxes, Net | 2.5 | 28.5 |
Other Current Assets | 6.1 | 7.6 |
Other Current Liabilities | (32.5) | (30.7) |
Net Cash Flows from (Used for) Operating Activities | 154.3 | 218.4 |
Investing Activities | ||
Construction Expenditures | (136.4) | (111.8) |
Change in Advances to Affiliates, Net | (0.6) | 0 |
Purchases of Investment Securities | (1,151.6) | (245.8) |
Sales of Investment Securities | 1,137.7 | 228.2 |
Acquisitions of Nuclear Fuel | (45.5) | (51.8) |
Other Investing Activities | 3.3 | 5.5 |
Net Cash Flows from (Used for) Investing Activities | (193.1) | (175.7) |
Financing Activities | ||
Issuance of Long-term Debt | 394.8 | 0 |
Change in Advances from Affiliates, Net | (284.8) | 25.7 |
Retirement of Long-term Debt | (28.8) | (25.9) |
Principal Payments for Capital Lease Obligations | (9.6) | (12.2) |
Dividends Paid on Common Stock | (31.3) | (30) |
Other Financing Activities | 0.7 | 0.5 |
Net Cash Flows from (Used for) Financing Activities | 41 | (41.9) |
Net Increase (Decrease) in Cash and Cash Equivalents | 2.2 | 0.8 |
Cash and Cash Equivalents at Beginning of Period | 1.1 | 1 |
Cash and Cash Equivalents at End of Period | 3.3 | 1.8 |
Supplementary Information | ||
Cash Paid for Interest, Net of Capitalized Amounts | 35.2 | 35 |
Net Cash Paid (Received) for Income Taxes | (4.9) | 2 |
Noncash Acquisitions Under Capital Leases | 14.9 | 0.8 |
Construction Expenditures Included in Current Liabilities as of March 31, | 68.4 | 66.3 |
Acquisition of Nuclear Fuel Included in Current Liabilities as of March 31, | 29.1 | 0 |
Expected Reimbursement For Spent Nuclear Fuel Dry Cask Storage | 0 | 0.1 |
Ohio Power Co [Member] | ||
Operating Activities | ||
Net Income (Loss) | 70.2 | 65.4 |
Adjustments to Reconcile Net Income to Net Cash Flows from (Used for) Operating Activities: | ||
Depreciation and Amortization | 61.3 | 59.2 |
Amortization Of Generation Deferrals | 55.1 | 31.4 |
Deferred Income Taxes | 7.3 | 1.7 |
Carrying Costs Income | (1.9) | (6.5) |
Allowance for Equity Funds Used During Construction | (1.7) | (2.4) |
Mark-to-Market of Risk Management Contracts | 26.9 | 1.5 |
Property Taxes | 56 | 49.8 |
Deferral of Ohio Capacity Costs, Net | 0 | (18.2) |
Change in Other Noncurrent Assets | (16.2) | 32.6 |
Change in Other Noncurrent Liabilities | 6.5 | 25.4 |
Changes in Certain Components of Working Capital: | ||
Accounts Receivable, Net | (4.7) | 4.7 |
Fuel, Materials and Supplies | (3) | (7.3) |
Accounts Payable | (30.4) | (25.2) |
Customer Deposits | 24 | 0.9 |
Accrued Taxes, Net | (148.4) | (59.5) |
Other Current Assets | (0.4) | (1.2) |
Other Current Liabilities | (20.7) | (7.2) |
Net Cash Flows from (Used for) Operating Activities | 79.9 | 145.1 |
Investing Activities | ||
Construction Expenditures | (99.2) | (119.7) |
Change in Restricted Cash for Securitized Funding | 11.5 | 11.6 |
Change in Advances to Affiliates, Net | 109.2 | 21.2 |
Other Investing Activities | 3.1 | 2.8 |
Net Cash Flows from (Used for) Investing Activities | 24.6 | (84.1) |
Financing Activities | ||
Retirement of Long-term Debt | (22.8) | (22.2) |
Principal Payments for Capital Lease Obligations | (1) | (0.9) |
Dividends Paid on Common Stock | (75) | (37.5) |
Other Financing Activities | 0.5 | 1.1 |
Net Cash Flows from (Used for) Financing Activities | (98.3) | (59.5) |
Net Increase (Decrease) in Cash and Cash Equivalents | 6.2 | 1.5 |
Cash and Cash Equivalents at Beginning of Period | 3.1 | 2.9 |
Cash and Cash Equivalents at End of Period | 9.3 | 4.4 |
Supplementary Information | ||
Cash Paid for Interest, Net of Capitalized Amounts | 17.8 | 18.8 |
Net Cash Paid (Received) for Income Taxes | 72.5 | 0 |
Noncash Acquisitions Under Capital Leases | 0.8 | 1.6 |
Construction Expenditures Included in Current Liabilities as of March 31, | 23.1 | 42.9 |
Public Service Co Of Oklahoma [Member] | ||
Operating Activities | ||
Net Income (Loss) | 15.7 | 13.7 |
Adjustments to Reconcile Net Income to Net Cash Flows from (Used for) Operating Activities: | ||
Depreciation and Amortization | 35.3 | 29.5 |
Deferred Income Taxes | 30.5 | 8.9 |
Allowance for Equity Funds Used During Construction | (2.3) | (1.3) |
Mark-to-Market of Risk Management Contracts | 0 | (0.2) |
Property Taxes | (24.1) | (24.2) |
Fuel Over/Under-Recovery, Net | (8.3) | 25 |
Change in Regulatory Assets | (3.9) | 0.1 |
Change in Regulatory Liabilities | (1.1) | 8.1 |
Change in Other Noncurrent Assets | (6.3) | (5.1) |
Change in Other Noncurrent Liabilities | (0.4) | 8.5 |
Changes in Certain Components of Working Capital: | ||
Accounts Receivable, Net | 5 | 4.5 |
Fuel, Materials and Supplies | (3.5) | (2) |
Accounts Payable | (17.6) | (6.8) |
Accrued Taxes, Net | 17.6 | 14.8 |
Other Current Assets | (0.2) | (9) |
Other Current Liabilities | (4) | (7.3) |
Net Cash Flows from (Used for) Operating Activities | 32.4 | 57.2 |
Investing Activities | ||
Construction Expenditures | (104.1) | (90.2) |
Change in Advances to Affiliates, Net | 72.2 | (62.3) |
Other Investing Activities | 2.1 | 1.2 |
Net Cash Flows from (Used for) Investing Activities | (29.8) | (151.3) |
Financing Activities | ||
Issuance of Long-term Debt | 0 | 248.8 |
Change in Advances from Affiliates, Net | 0 | (154.2) |
Retirement of Long-term Debt | (0.1) | (0.1) |
Principal Payments for Capital Lease Obligations | (1) | (1) |
Other Financing Activities | 0.3 | 0.7 |
Net Cash Flows from (Used for) Financing Activities | (0.8) | 94.2 |
Net Increase (Decrease) in Cash and Cash Equivalents | 1.8 | 0.1 |
Cash and Cash Equivalents at Beginning of Period | 1.4 | 1.3 |
Cash and Cash Equivalents at End of Period | 3.2 | 1.4 |
Supplementary Information | ||
Cash Paid for Interest, Net of Capitalized Amounts | 15.1 | 11 |
Net Cash Paid (Received) for Income Taxes | (23.2) | 0 |
Noncash Acquisitions Under Capital Leases | 1.4 | 0.9 |
Construction Expenditures Included in Current Liabilities as of March 31, | 35.7 | 30.8 |
Southwestern Electric Power Co [Member] | ||
Operating Activities | ||
Net Income (Loss) | 24.5 | 46.7 |
Adjustments to Reconcile Net Income to Net Cash Flows from (Used for) Operating Activities: | ||
Depreciation and Amortization | 47.5 | 47 |
Deferred Income Taxes | 44.6 | 18.8 |
Allowance for Equity Funds Used During Construction | (7.4) | (5.2) |
Mark-to-Market of Risk Management Contracts | 0.1 | 3.1 |
Property Taxes | (41.4) | (39.4) |
Fuel Over/Under-Recovery, Net | 3.7 | 2.8 |
Change in Other Noncurrent Assets | 5.3 | (0.9) |
Change in Other Noncurrent Liabilities | (1.9) | (2.9) |
Changes in Certain Components of Working Capital: | ||
Accounts Receivable, Net | 2.6 | 26 |
Fuel, Materials and Supplies | 13.7 | (0.5) |
Accounts Payable | (19.9) | (28.3) |
Accrued Taxes, Net | (13.2) | 43.1 |
Accrued Interest | (20.8) | (25.5) |
Other Current Assets | (1.7) | (11.4) |
Other Current Liabilities | (28.2) | (44.1) |
Net Cash Flows from (Used for) Operating Activities | 7.5 | 29.3 |
Investing Activities | ||
Construction Expenditures | (116.6) | (138.1) |
Change in Advances to Affiliates, Net | 0 | (252.3) |
Other Investing Activities | (7) | (1.4) |
Net Cash Flows from (Used for) Investing Activities | (123.6) | (391.8) |
Financing Activities | ||
Issuance of Long-term Debt | 0 | 446 |
Change in Advances from Affiliates, Net | 159.5 | 0 |
Retirement of Long-term Debt | (1.6) | (55.1) |
Principal Payments for Capital Lease Obligations | (4.5) | (4.5) |
Dividends Paid on Common Stock | (30) | (30) |
Dividends Paid on Common Stock | (1.2) | (1) |
Other Financing Activities | 1 | 0.7 |
Net Cash Flows from (Used for) Financing Activities | 123.2 | 356.1 |
Net Increase (Decrease) in Cash and Cash Equivalents | 7.1 | (6.4) |
Cash and Cash Equivalents at Beginning of Period | 5.2 | 14.4 |
Cash and Cash Equivalents at End of Period | 12.3 | 8 |
Supplementary Information | ||
Cash Paid for Interest, Net of Capitalized Amounts | 47.7 | 53.4 |
Net Cash Paid (Received) for Income Taxes | 14 | (0.9) |
Noncash Acquisitions Under Capital Leases | 4.9 | 0.9 |
Construction Expenditures Included in Current Liabilities as of March 31, | $ 83.7 | $ 80.2 |
Significant Accounting Matters
Significant Accounting Matters | 3 Months Ended |
Mar. 31, 2016 | |
Significant Accounting Matters | SIGNIFICANT ACCOUNTING MATTERS The disclosures in this note apply to all Registrants unless indicated otherwise. General The unaudited condensed financial statements and footnotes were prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements. In the opinion of management, the unaudited condensed interim financial statements reflect all normal and recurring accruals and adjustments necessary for a fair presentation of the net income, financial position and cash flows for the interim periods for each Registrant. Net income for the three months ended March 31, 2016 is not necessarily indicative of results that may be expected for the year ending December 31, 2016 . The condensed financial statements are unaudited and should be read in conjunction with the audited 2015 financial statements and notes thereto, which are included in the Registrant’s Annual Reports on Form 10-K as filed with the SEC on February 23, 2016 . Earnings Per Share (EPS) (Applies to AEP) Basic EPS is calculated by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS is calculated by adjusting the weighted average outstanding common shares, assuming conversion of all potentially dilutive stock options and awards. The following table presents AEP’s basic and diluted EPS calculations included on the condensed statements of income: Three Months Ended March 31, 2016 2015 (in millions, except per share data) $/share $/share Income from Continuing Operations $ 503.1 $ 620.2 Less: Net Income Attributable to Noncontrolling Interests 1.9 1.5 Earnings Attributable to AEP Common Shareholders from Continuing Operations $ 501.2 $ 618.7 Weighted Average Number of Basic Shares Outstanding 491.1 $ 1.02 489.6 $ 1.27 Weighted Average Dilutive Effect of Restricted Stock Units 0.2 — 0.3 — Weighted Average Number of Diluted Shares Outstanding 491.3 $ 1.02 489.9 $ 1.27 There were no antidilutive shares outstanding as of March 31, 2016 and 2015 . |
Appalachian Power Co [Member] | |
Significant Accounting Matters | SIGNIFICANT ACCOUNTING MATTERS The disclosures in this note apply to all Registrants unless indicated otherwise. General The unaudited condensed financial statements and footnotes were prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements. In the opinion of management, the unaudited condensed interim financial statements reflect all normal and recurring accruals and adjustments necessary for a fair presentation of the net income, financial position and cash flows for the interim periods for each Registrant. Net income for the three months ended March 31, 2016 is not necessarily indicative of results that may be expected for the year ending December 31, 2016 . The condensed financial statements are unaudited and should be read in conjunction with the audited 2015 financial statements and notes thereto, which are included in the Registrant’s Annual Reports on Form 10-K as filed with the SEC on February 23, 2016 . Earnings Per Share (EPS) (Applies to AEP) Basic EPS is calculated by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS is calculated by adjusting the weighted average outstanding common shares, assuming conversion of all potentially dilutive stock options and awards. The following table presents AEP’s basic and diluted EPS calculations included on the condensed statements of income: Three Months Ended March 31, 2016 2015 (in millions, except per share data) $/share $/share Income from Continuing Operations $ 503.1 $ 620.2 Less: Net Income Attributable to Noncontrolling Interests 1.9 1.5 Earnings Attributable to AEP Common Shareholders from Continuing Operations $ 501.2 $ 618.7 Weighted Average Number of Basic Shares Outstanding 491.1 $ 1.02 489.6 $ 1.27 Weighted Average Dilutive Effect of Restricted Stock Units 0.2 — 0.3 — Weighted Average Number of Diluted Shares Outstanding 491.3 $ 1.02 489.9 $ 1.27 There were no antidilutive shares outstanding as of March 31, 2016 and 2015 . |
Indiana Michigan Power Co [Member] | |
Significant Accounting Matters | SIGNIFICANT ACCOUNTING MATTERS The disclosures in this note apply to all Registrants unless indicated otherwise. General The unaudited condensed financial statements and footnotes were prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements. In the opinion of management, the unaudited condensed interim financial statements reflect all normal and recurring accruals and adjustments necessary for a fair presentation of the net income, financial position and cash flows for the interim periods for each Registrant. Net income for the three months ended March 31, 2016 is not necessarily indicative of results that may be expected for the year ending December 31, 2016 . The condensed financial statements are unaudited and should be read in conjunction with the audited 2015 financial statements and notes thereto, which are included in the Registrant’s Annual Reports on Form 10-K as filed with the SEC on February 23, 2016 . Earnings Per Share (EPS) (Applies to AEP) Basic EPS is calculated by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS is calculated by adjusting the weighted average outstanding common shares, assuming conversion of all potentially dilutive stock options and awards. The following table presents AEP’s basic and diluted EPS calculations included on the condensed statements of income: Three Months Ended March 31, 2016 2015 (in millions, except per share data) $/share $/share Income from Continuing Operations $ 503.1 $ 620.2 Less: Net Income Attributable to Noncontrolling Interests 1.9 1.5 Earnings Attributable to AEP Common Shareholders from Continuing Operations $ 501.2 $ 618.7 Weighted Average Number of Basic Shares Outstanding 491.1 $ 1.02 489.6 $ 1.27 Weighted Average Dilutive Effect of Restricted Stock Units 0.2 — 0.3 — Weighted Average Number of Diluted Shares Outstanding 491.3 $ 1.02 489.9 $ 1.27 There were no antidilutive shares outstanding as of March 31, 2016 and 2015 . |
Ohio Power Co [Member] | |
Significant Accounting Matters | SIGNIFICANT ACCOUNTING MATTERS The disclosures in this note apply to all Registrants unless indicated otherwise. General The unaudited condensed financial statements and footnotes were prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements. In the opinion of management, the unaudited condensed interim financial statements reflect all normal and recurring accruals and adjustments necessary for a fair presentation of the net income, financial position and cash flows for the interim periods for each Registrant. Net income for the three months ended March 31, 2016 is not necessarily indicative of results that may be expected for the year ending December 31, 2016 . The condensed financial statements are unaudited and should be read in conjunction with the audited 2015 financial statements and notes thereto, which are included in the Registrant’s Annual Reports on Form 10-K as filed with the SEC on February 23, 2016 . Earnings Per Share (EPS) (Applies to AEP) Basic EPS is calculated by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS is calculated by adjusting the weighted average outstanding common shares, assuming conversion of all potentially dilutive stock options and awards. The following table presents AEP’s basic and diluted EPS calculations included on the condensed statements of income: Three Months Ended March 31, 2016 2015 (in millions, except per share data) $/share $/share Income from Continuing Operations $ 503.1 $ 620.2 Less: Net Income Attributable to Noncontrolling Interests 1.9 1.5 Earnings Attributable to AEP Common Shareholders from Continuing Operations $ 501.2 $ 618.7 Weighted Average Number of Basic Shares Outstanding 491.1 $ 1.02 489.6 $ 1.27 Weighted Average Dilutive Effect of Restricted Stock Units 0.2 — 0.3 — Weighted Average Number of Diluted Shares Outstanding 491.3 $ 1.02 489.9 $ 1.27 There were no antidilutive shares outstanding as of March 31, 2016 and 2015 . |
Public Service Co Of Oklahoma [Member] | |
Significant Accounting Matters | SIGNIFICANT ACCOUNTING MATTERS The disclosures in this note apply to all Registrants unless indicated otherwise. General The unaudited condensed financial statements and footnotes were prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements. In the opinion of management, the unaudited condensed interim financial statements reflect all normal and recurring accruals and adjustments necessary for a fair presentation of the net income, financial position and cash flows for the interim periods for each Registrant. Net income for the three months ended March 31, 2016 is not necessarily indicative of results that may be expected for the year ending December 31, 2016 . The condensed financial statements are unaudited and should be read in conjunction with the audited 2015 financial statements and notes thereto, which are included in the Registrant’s Annual Reports on Form 10-K as filed with the SEC on February 23, 2016 . Earnings Per Share (EPS) (Applies to AEP) Basic EPS is calculated by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS is calculated by adjusting the weighted average outstanding common shares, assuming conversion of all potentially dilutive stock options and awards. The following table presents AEP’s basic and diluted EPS calculations included on the condensed statements of income: Three Months Ended March 31, 2016 2015 (in millions, except per share data) $/share $/share Income from Continuing Operations $ 503.1 $ 620.2 Less: Net Income Attributable to Noncontrolling Interests 1.9 1.5 Earnings Attributable to AEP Common Shareholders from Continuing Operations $ 501.2 $ 618.7 Weighted Average Number of Basic Shares Outstanding 491.1 $ 1.02 489.6 $ 1.27 Weighted Average Dilutive Effect of Restricted Stock Units 0.2 — 0.3 — Weighted Average Number of Diluted Shares Outstanding 491.3 $ 1.02 489.9 $ 1.27 There were no antidilutive shares outstanding as of March 31, 2016 and 2015 . |
Southwestern Electric Power Co [Member] | |
Significant Accounting Matters | SIGNIFICANT ACCOUNTING MATTERS The disclosures in this note apply to all Registrants unless indicated otherwise. General The unaudited condensed financial statements and footnotes were prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements. In the opinion of management, the unaudited condensed interim financial statements reflect all normal and recurring accruals and adjustments necessary for a fair presentation of the net income, financial position and cash flows for the interim periods for each Registrant. Net income for the three months ended March 31, 2016 is not necessarily indicative of results that may be expected for the year ending December 31, 2016 . The condensed financial statements are unaudited and should be read in conjunction with the audited 2015 financial statements and notes thereto, which are included in the Registrant’s Annual Reports on Form 10-K as filed with the SEC on February 23, 2016 . Earnings Per Share (EPS) (Applies to AEP) Basic EPS is calculated by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS is calculated by adjusting the weighted average outstanding common shares, assuming conversion of all potentially dilutive stock options and awards. The following table presents AEP’s basic and diluted EPS calculations included on the condensed statements of income: Three Months Ended March 31, 2016 2015 (in millions, except per share data) $/share $/share Income from Continuing Operations $ 503.1 $ 620.2 Less: Net Income Attributable to Noncontrolling Interests 1.9 1.5 Earnings Attributable to AEP Common Shareholders from Continuing Operations $ 501.2 $ 618.7 Weighted Average Number of Basic Shares Outstanding 491.1 $ 1.02 489.6 $ 1.27 Weighted Average Dilutive Effect of Restricted Stock Units 0.2 — 0.3 — Weighted Average Number of Diluted Shares Outstanding 491.3 $ 1.02 489.9 $ 1.27 There were no antidilutive shares outstanding as of March 31, 2016 and 2015 . |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2016 | |
New Accounting Pronouncements | NEW ACCOUNTING PRONOUNCEMENTS The disclosures in this note apply to all Registrants unless indicated otherwise. Upon issuance of final pronouncements, management reviews the new accounting literature to determine its relevance, if any, to the Registrant Subsidiaries’ business. The following final pronouncements will impact the financial statements. ASU 2014-09 “Revenue from Contracts with Customers” (ASU 2014-09) In May 2014, the FASB issued ASU 2014-09 clarifying the method used to determine the timing and requirements for revenue recognition on the statements of income. Under the new standard, an entity must identify the performance obligations in a contract, determine the transaction price and allocate the price to specific performance obligations to recognize the revenue when the obligation is completed. The amendments in this update also require disclosure of sufficient information to allow users to understand the nature, amount, timing and uncertainty of revenue and cash flow arising from contracts. The FASB deferred implementation of ASU 2014-09 under the terms in ASU 2015-14, “Revenue from Contracts with Customers (Topic: 606): Deferral of the Effective Date.” The new accounting guidance is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted for annual periods beginning after December 15, 2016. As applicable, this standard may change the amount of revenue recognized on the statements of income in each reporting period. Management is analyzing the impact of this new standard and, at this time, cannot estimate the impact of adoption on revenue or net income. Management plans to adopt ASU 2014-09 effective January 1, 2018. ASU 2015-11 “Simplifying the Measurement of Inventory” (ASU 2015-11) In July 2015, the FASB issued ASU 2015-11 simplifying the guidance on the subsequent measurement of inventory, excluding inventory measured using last-in, first-out or the retail inventory method. Under the new standard, inventory should be at the lower of cost and net realizable value. The new accounting guidance is effective for interim and annual periods beginning after December 15, 2016 with early adoption permitted. Management does not expect the new standard to impact the Registrants’ results of operations, financial position or cash flows. Management plans to adopt ASU 2015-11 prospectively, effective January 1, 2017. ASU 2016-01 “Recognition and Measurement of Financial Assets and Financial Liabilities” (ASU 2016-01) In January 2016, the FASB issued ASU 2016-01 enhancing the reporting model for financial instruments. Under the new standard, equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) are required to be measured at fair value with changes in fair value recognized in net income. The new standard also amends disclosure requirements and requires separate presentation of financial assets and liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements. The amendments also clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for sale securities in combination with the entity’s other deferred tax assets. The new accounting guidance is effective for interim and annual periods beginning after December 15, 2017 with early adoption permitted. The amendments will be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. Management is analyzing the impact of this new standard and, at this time, cannot estimate the impact of adoption on net income. Management plans to adopt ASU 2016-01 effective January 1, 2018. ASU 2016-02 “Accounting for Leases” (ASU 2016-02) In February 2016, the FASB issued ASU 2016-02 increasing the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Under the new standard, an entity must recognize an asset and liability for operating leases on the balance sheets. Additionally, a capital lease will be known as a finance lease going forward. Leases with lease terms of 12 months or longer will be subject to the new requirements. Fundamentally, the criteria used to determine lease classification will remain the same, but will be more subjective under the new standard. The new accounting guidance is effective for annual periods beginning after December 15, 2018 with early adoption permitted. The guidance will be applied by means of a modified retrospective approach. The modified retrospective approach will require lessees and lessors to recognize and measure leases at the beginning of the earliest period presented as well as a number of optional practical expedients that entities may elect to apply. Management is analyzing the impact of this new standard and, at this time, cannot estimate the impact of adoption. Management expects the new standard to impact the Registrants’ financial position, but not the Registrants’ results of operations or cash flows. Management plans to adopt ASU 2016-02 effective January 1, 2019. ASU 2016-09 “Compensation – Stock Compensation” (ASU 2016-09) In March 2016, the FASB issued ASU 2016-09 simplifying the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities and classification on the statements of cash flows. Under the new standard, all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) should be recognized as income tax expense or benefit on the statements of income. Under current GAAP, excess tax benefits are recognized in additional paid-in capital while tax deficiencies are recognized either as an offset to accumulated excess tax benefits, if any, or on the statements of income. The new accounting guidance is effective for annual periods beginning after December 15, 2016. Early adoption is permitted in any interim or annual period. Certain provisions require retrospective/modified retrospective transition while others are to be applied prospectively. Management plans to adopt ASU 2016-09 effective January 1, 2017. |
Appalachian Power Co [Member] | |
New Accounting Pronouncements | NEW ACCOUNTING PRONOUNCEMENTS The disclosures in this note apply to all Registrants unless indicated otherwise. Upon issuance of final pronouncements, management reviews the new accounting literature to determine its relevance, if any, to the Registrant Subsidiaries’ business. The following final pronouncements will impact the financial statements. ASU 2014-09 “Revenue from Contracts with Customers” (ASU 2014-09) In May 2014, the FASB issued ASU 2014-09 clarifying the method used to determine the timing and requirements for revenue recognition on the statements of income. Under the new standard, an entity must identify the performance obligations in a contract, determine the transaction price and allocate the price to specific performance obligations to recognize the revenue when the obligation is completed. The amendments in this update also require disclosure of sufficient information to allow users to understand the nature, amount, timing and uncertainty of revenue and cash flow arising from contracts. The FASB deferred implementation of ASU 2014-09 under the terms in ASU 2015-14, “Revenue from Contracts with Customers (Topic: 606): Deferral of the Effective Date.” The new accounting guidance is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted for annual periods beginning after December 15, 2016. As applicable, this standard may change the amount of revenue recognized on the statements of income in each reporting period. Management is analyzing the impact of this new standard and, at this time, cannot estimate the impact of adoption on revenue or net income. Management plans to adopt ASU 2014-09 effective January 1, 2018. ASU 2015-11 “Simplifying the Measurement of Inventory” (ASU 2015-11) In July 2015, the FASB issued ASU 2015-11 simplifying the guidance on the subsequent measurement of inventory, excluding inventory measured using last-in, first-out or the retail inventory method. Under the new standard, inventory should be at the lower of cost and net realizable value. The new accounting guidance is effective for interim and annual periods beginning after December 15, 2016 with early adoption permitted. Management does not expect the new standard to impact the Registrants’ results of operations, financial position or cash flows. Management plans to adopt ASU 2015-11 prospectively, effective January 1, 2017. ASU 2016-01 “Recognition and Measurement of Financial Assets and Financial Liabilities” (ASU 2016-01) In January 2016, the FASB issued ASU 2016-01 enhancing the reporting model for financial instruments. Under the new standard, equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) are required to be measured at fair value with changes in fair value recognized in net income. The new standard also amends disclosure requirements and requires separate presentation of financial assets and liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements. The amendments also clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for sale securities in combination with the entity’s other deferred tax assets. The new accounting guidance is effective for interim and annual periods beginning after December 15, 2017 with early adoption permitted. The amendments will be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. Management is analyzing the impact of this new standard and, at this time, cannot estimate the impact of adoption on net income. Management plans to adopt ASU 2016-01 effective January 1, 2018. ASU 2016-02 “Accounting for Leases” (ASU 2016-02) In February 2016, the FASB issued ASU 2016-02 increasing the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Under the new standard, an entity must recognize an asset and liability for operating leases on the balance sheets. Additionally, a capital lease will be known as a finance lease going forward. Leases with lease terms of 12 months or longer will be subject to the new requirements. Fundamentally, the criteria used to determine lease classification will remain the same, but will be more subjective under the new standard. The new accounting guidance is effective for annual periods beginning after December 15, 2018 with early adoption permitted. The guidance will be applied by means of a modified retrospective approach. The modified retrospective approach will require lessees and lessors to recognize and measure leases at the beginning of the earliest period presented as well as a number of optional practical expedients that entities may elect to apply. Management is analyzing the impact of this new standard and, at this time, cannot estimate the impact of adoption. Management expects the new standard to impact the Registrants’ financial position, but not the Registrants’ results of operations or cash flows. Management plans to adopt ASU 2016-02 effective January 1, 2019. ASU 2016-09 “Compensation – Stock Compensation” (ASU 2016-09) In March 2016, the FASB issued ASU 2016-09 simplifying the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities and classification on the statements of cash flows. Under the new standard, all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) should be recognized as income tax expense or benefit on the statements of income. Under current GAAP, excess tax benefits are recognized in additional paid-in capital while tax deficiencies are recognized either as an offset to accumulated excess tax benefits, if any, or on the statements of income. The new accounting guidance is effective for annual periods beginning after December 15, 2016. Early adoption is permitted in any interim or annual period. Certain provisions require retrospective/modified retrospective transition while others are to be applied prospectively. Management plans to adopt ASU 2016-09 effective January 1, 2017. |
Indiana Michigan Power Co [Member] | |
New Accounting Pronouncements | NEW ACCOUNTING PRONOUNCEMENTS The disclosures in this note apply to all Registrants unless indicated otherwise. Upon issuance of final pronouncements, management reviews the new accounting literature to determine its relevance, if any, to the Registrant Subsidiaries’ business. The following final pronouncements will impact the financial statements. ASU 2014-09 “Revenue from Contracts with Customers” (ASU 2014-09) In May 2014, the FASB issued ASU 2014-09 clarifying the method used to determine the timing and requirements for revenue recognition on the statements of income. Under the new standard, an entity must identify the performance obligations in a contract, determine the transaction price and allocate the price to specific performance obligations to recognize the revenue when the obligation is completed. The amendments in this update also require disclosure of sufficient information to allow users to understand the nature, amount, timing and uncertainty of revenue and cash flow arising from contracts. The FASB deferred implementation of ASU 2014-09 under the terms in ASU 2015-14, “Revenue from Contracts with Customers (Topic: 606): Deferral of the Effective Date.” The new accounting guidance is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted for annual periods beginning after December 15, 2016. As applicable, this standard may change the amount of revenue recognized on the statements of income in each reporting period. Management is analyzing the impact of this new standard and, at this time, cannot estimate the impact of adoption on revenue or net income. Management plans to adopt ASU 2014-09 effective January 1, 2018. ASU 2015-11 “Simplifying the Measurement of Inventory” (ASU 2015-11) In July 2015, the FASB issued ASU 2015-11 simplifying the guidance on the subsequent measurement of inventory, excluding inventory measured using last-in, first-out or the retail inventory method. Under the new standard, inventory should be at the lower of cost and net realizable value. The new accounting guidance is effective for interim and annual periods beginning after December 15, 2016 with early adoption permitted. Management does not expect the new standard to impact the Registrants’ results of operations, financial position or cash flows. Management plans to adopt ASU 2015-11 prospectively, effective January 1, 2017. ASU 2016-01 “Recognition and Measurement of Financial Assets and Financial Liabilities” (ASU 2016-01) In January 2016, the FASB issued ASU 2016-01 enhancing the reporting model for financial instruments. Under the new standard, equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) are required to be measured at fair value with changes in fair value recognized in net income. The new standard also amends disclosure requirements and requires separate presentation of financial assets and liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements. The amendments also clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for sale securities in combination with the entity’s other deferred tax assets. The new accounting guidance is effective for interim and annual periods beginning after December 15, 2017 with early adoption permitted. The amendments will be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. Management is analyzing the impact of this new standard and, at this time, cannot estimate the impact of adoption on net income. Management plans to adopt ASU 2016-01 effective January 1, 2018. ASU 2016-02 “Accounting for Leases” (ASU 2016-02) In February 2016, the FASB issued ASU 2016-02 increasing the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Under the new standard, an entity must recognize an asset and liability for operating leases on the balance sheets. Additionally, a capital lease will be known as a finance lease going forward. Leases with lease terms of 12 months or longer will be subject to the new requirements. Fundamentally, the criteria used to determine lease classification will remain the same, but will be more subjective under the new standard. The new accounting guidance is effective for annual periods beginning after December 15, 2018 with early adoption permitted. The guidance will be applied by means of a modified retrospective approach. The modified retrospective approach will require lessees and lessors to recognize and measure leases at the beginning of the earliest period presented as well as a number of optional practical expedients that entities may elect to apply. Management is analyzing the impact of this new standard and, at this time, cannot estimate the impact of adoption. Management expects the new standard to impact the Registrants’ financial position, but not the Registrants’ results of operations or cash flows. Management plans to adopt ASU 2016-02 effective January 1, 2019. ASU 2016-09 “Compensation – Stock Compensation” (ASU 2016-09) In March 2016, the FASB issued ASU 2016-09 simplifying the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities and classification on the statements of cash flows. Under the new standard, all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) should be recognized as income tax expense or benefit on the statements of income. Under current GAAP, excess tax benefits are recognized in additional paid-in capital while tax deficiencies are recognized either as an offset to accumulated excess tax benefits, if any, or on the statements of income. The new accounting guidance is effective for annual periods beginning after December 15, 2016. Early adoption is permitted in any interim or annual period. Certain provisions require retrospective/modified retrospective transition while others are to be applied prospectively. Management plans to adopt ASU 2016-09 effective January 1, 2017. |
Ohio Power Co [Member] | |
New Accounting Pronouncements | NEW ACCOUNTING PRONOUNCEMENTS The disclosures in this note apply to all Registrants unless indicated otherwise. Upon issuance of final pronouncements, management reviews the new accounting literature to determine its relevance, if any, to the Registrant Subsidiaries’ business. The following final pronouncements will impact the financial statements. ASU 2014-09 “Revenue from Contracts with Customers” (ASU 2014-09) In May 2014, the FASB issued ASU 2014-09 clarifying the method used to determine the timing and requirements for revenue recognition on the statements of income. Under the new standard, an entity must identify the performance obligations in a contract, determine the transaction price and allocate the price to specific performance obligations to recognize the revenue when the obligation is completed. The amendments in this update also require disclosure of sufficient information to allow users to understand the nature, amount, timing and uncertainty of revenue and cash flow arising from contracts. The FASB deferred implementation of ASU 2014-09 under the terms in ASU 2015-14, “Revenue from Contracts with Customers (Topic: 606): Deferral of the Effective Date.” The new accounting guidance is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted for annual periods beginning after December 15, 2016. As applicable, this standard may change the amount of revenue recognized on the statements of income in each reporting period. Management is analyzing the impact of this new standard and, at this time, cannot estimate the impact of adoption on revenue or net income. Management plans to adopt ASU 2014-09 effective January 1, 2018. ASU 2015-11 “Simplifying the Measurement of Inventory” (ASU 2015-11) In July 2015, the FASB issued ASU 2015-11 simplifying the guidance on the subsequent measurement of inventory, excluding inventory measured using last-in, first-out or the retail inventory method. Under the new standard, inventory should be at the lower of cost and net realizable value. The new accounting guidance is effective for interim and annual periods beginning after December 15, 2016 with early adoption permitted. Management does not expect the new standard to impact the Registrants’ results of operations, financial position or cash flows. Management plans to adopt ASU 2015-11 prospectively, effective January 1, 2017. ASU 2016-01 “Recognition and Measurement of Financial Assets and Financial Liabilities” (ASU 2016-01) In January 2016, the FASB issued ASU 2016-01 enhancing the reporting model for financial instruments. Under the new standard, equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) are required to be measured at fair value with changes in fair value recognized in net income. The new standard also amends disclosure requirements and requires separate presentation of financial assets and liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements. The amendments also clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for sale securities in combination with the entity’s other deferred tax assets. The new accounting guidance is effective for interim and annual periods beginning after December 15, 2017 with early adoption permitted. The amendments will be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. Management is analyzing the impact of this new standard and, at this time, cannot estimate the impact of adoption on net income. Management plans to adopt ASU 2016-01 effective January 1, 2018. ASU 2016-02 “Accounting for Leases” (ASU 2016-02) In February 2016, the FASB issued ASU 2016-02 increasing the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Under the new standard, an entity must recognize an asset and liability for operating leases on the balance sheets. Additionally, a capital lease will be known as a finance lease going forward. Leases with lease terms of 12 months or longer will be subject to the new requirements. Fundamentally, the criteria used to determine lease classification will remain the same, but will be more subjective under the new standard. The new accounting guidance is effective for annual periods beginning after December 15, 2018 with early adoption permitted. The guidance will be applied by means of a modified retrospective approach. The modified retrospective approach will require lessees and lessors to recognize and measure leases at the beginning of the earliest period presented as well as a number of optional practical expedients that entities may elect to apply. Management is analyzing the impact of this new standard and, at this time, cannot estimate the impact of adoption. Management expects the new standard to impact the Registrants’ financial position, but not the Registrants’ results of operations or cash flows. Management plans to adopt ASU 2016-02 effective January 1, 2019. ASU 2016-09 “Compensation – Stock Compensation” (ASU 2016-09) In March 2016, the FASB issued ASU 2016-09 simplifying the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities and classification on the statements of cash flows. Under the new standard, all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) should be recognized as income tax expense or benefit on the statements of income. Under current GAAP, excess tax benefits are recognized in additional paid-in capital while tax deficiencies are recognized either as an offset to accumulated excess tax benefits, if any, or on the statements of income. The new accounting guidance is effective for annual periods beginning after December 15, 2016. Early adoption is permitted in any interim or annual period. Certain provisions require retrospective/modified retrospective transition while others are to be applied prospectively. Management plans to adopt ASU 2016-09 effective January 1, 2017. |
Public Service Co Of Oklahoma [Member] | |
New Accounting Pronouncements | NEW ACCOUNTING PRONOUNCEMENTS The disclosures in this note apply to all Registrants unless indicated otherwise. Upon issuance of final pronouncements, management reviews the new accounting literature to determine its relevance, if any, to the Registrant Subsidiaries’ business. The following final pronouncements will impact the financial statements. ASU 2014-09 “Revenue from Contracts with Customers” (ASU 2014-09) In May 2014, the FASB issued ASU 2014-09 clarifying the method used to determine the timing and requirements for revenue recognition on the statements of income. Under the new standard, an entity must identify the performance obligations in a contract, determine the transaction price and allocate the price to specific performance obligations to recognize the revenue when the obligation is completed. The amendments in this update also require disclosure of sufficient information to allow users to understand the nature, amount, timing and uncertainty of revenue and cash flow arising from contracts. The FASB deferred implementation of ASU 2014-09 under the terms in ASU 2015-14, “Revenue from Contracts with Customers (Topic: 606): Deferral of the Effective Date.” The new accounting guidance is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted for annual periods beginning after December 15, 2016. As applicable, this standard may change the amount of revenue recognized on the statements of income in each reporting period. Management is analyzing the impact of this new standard and, at this time, cannot estimate the impact of adoption on revenue or net income. Management plans to adopt ASU 2014-09 effective January 1, 2018. ASU 2015-11 “Simplifying the Measurement of Inventory” (ASU 2015-11) In July 2015, the FASB issued ASU 2015-11 simplifying the guidance on the subsequent measurement of inventory, excluding inventory measured using last-in, first-out or the retail inventory method. Under the new standard, inventory should be at the lower of cost and net realizable value. The new accounting guidance is effective for interim and annual periods beginning after December 15, 2016 with early adoption permitted. Management does not expect the new standard to impact the Registrants’ results of operations, financial position or cash flows. Management plans to adopt ASU 2015-11 prospectively, effective January 1, 2017. ASU 2016-01 “Recognition and Measurement of Financial Assets and Financial Liabilities” (ASU 2016-01) In January 2016, the FASB issued ASU 2016-01 enhancing the reporting model for financial instruments. Under the new standard, equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) are required to be measured at fair value with changes in fair value recognized in net income. The new standard also amends disclosure requirements and requires separate presentation of financial assets and liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements. The amendments also clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for sale securities in combination with the entity’s other deferred tax assets. The new accounting guidance is effective for interim and annual periods beginning after December 15, 2017 with early adoption permitted. The amendments will be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. Management is analyzing the impact of this new standard and, at this time, cannot estimate the impact of adoption on net income. Management plans to adopt ASU 2016-01 effective January 1, 2018. ASU 2016-02 “Accounting for Leases” (ASU 2016-02) In February 2016, the FASB issued ASU 2016-02 increasing the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Under the new standard, an entity must recognize an asset and liability for operating leases on the balance sheets. Additionally, a capital lease will be known as a finance lease going forward. Leases with lease terms of 12 months or longer will be subject to the new requirements. Fundamentally, the criteria used to determine lease classification will remain the same, but will be more subjective under the new standard. The new accounting guidance is effective for annual periods beginning after December 15, 2018 with early adoption permitted. The guidance will be applied by means of a modified retrospective approach. The modified retrospective approach will require lessees and lessors to recognize and measure leases at the beginning of the earliest period presented as well as a number of optional practical expedients that entities may elect to apply. Management is analyzing the impact of this new standard and, at this time, cannot estimate the impact of adoption. Management expects the new standard to impact the Registrants’ financial position, but not the Registrants’ results of operations or cash flows. Management plans to adopt ASU 2016-02 effective January 1, 2019. ASU 2016-09 “Compensation – Stock Compensation” (ASU 2016-09) In March 2016, the FASB issued ASU 2016-09 simplifying the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities and classification on the statements of cash flows. Under the new standard, all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) should be recognized as income tax expense or benefit on the statements of income. Under current GAAP, excess tax benefits are recognized in additional paid-in capital while tax deficiencies are recognized either as an offset to accumulated excess tax benefits, if any, or on the statements of income. The new accounting guidance is effective for annual periods beginning after December 15, 2016. Early adoption is permitted in any interim or annual period. Certain provisions require retrospective/modified retrospective transition while others are to be applied prospectively. Management plans to adopt ASU 2016-09 effective January 1, 2017. |
Southwestern Electric Power Co [Member] | |
New Accounting Pronouncements | NEW ACCOUNTING PRONOUNCEMENTS The disclosures in this note apply to all Registrants unless indicated otherwise. Upon issuance of final pronouncements, management reviews the new accounting literature to determine its relevance, if any, to the Registrant Subsidiaries’ business. The following final pronouncements will impact the financial statements. ASU 2014-09 “Revenue from Contracts with Customers” (ASU 2014-09) In May 2014, the FASB issued ASU 2014-09 clarifying the method used to determine the timing and requirements for revenue recognition on the statements of income. Under the new standard, an entity must identify the performance obligations in a contract, determine the transaction price and allocate the price to specific performance obligations to recognize the revenue when the obligation is completed. The amendments in this update also require disclosure of sufficient information to allow users to understand the nature, amount, timing and uncertainty of revenue and cash flow arising from contracts. The FASB deferred implementation of ASU 2014-09 under the terms in ASU 2015-14, “Revenue from Contracts with Customers (Topic: 606): Deferral of the Effective Date.” The new accounting guidance is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted for annual periods beginning after December 15, 2016. As applicable, this standard may change the amount of revenue recognized on the statements of income in each reporting period. Management is analyzing the impact of this new standard and, at this time, cannot estimate the impact of adoption on revenue or net income. Management plans to adopt ASU 2014-09 effective January 1, 2018. ASU 2015-11 “Simplifying the Measurement of Inventory” (ASU 2015-11) In July 2015, the FASB issued ASU 2015-11 simplifying the guidance on the subsequent measurement of inventory, excluding inventory measured using last-in, first-out or the retail inventory method. Under the new standard, inventory should be at the lower of cost and net realizable value. The new accounting guidance is effective for interim and annual periods beginning after December 15, 2016 with early adoption permitted. Management does not expect the new standard to impact the Registrants’ results of operations, financial position or cash flows. Management plans to adopt ASU 2015-11 prospectively, effective January 1, 2017. ASU 2016-01 “Recognition and Measurement of Financial Assets and Financial Liabilities” (ASU 2016-01) In January 2016, the FASB issued ASU 2016-01 enhancing the reporting model for financial instruments. Under the new standard, equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) are required to be measured at fair value with changes in fair value recognized in net income. The new standard also amends disclosure requirements and requires separate presentation of financial assets and liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements. The amendments also clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for sale securities in combination with the entity’s other deferred tax assets. The new accounting guidance is effective for interim and annual periods beginning after December 15, 2017 with early adoption permitted. The amendments will be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. Management is analyzing the impact of this new standard and, at this time, cannot estimate the impact of adoption on net income. Management plans to adopt ASU 2016-01 effective January 1, 2018. ASU 2016-02 “Accounting for Leases” (ASU 2016-02) In February 2016, the FASB issued ASU 2016-02 increasing the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Under the new standard, an entity must recognize an asset and liability for operating leases on the balance sheets. Additionally, a capital lease will be known as a finance lease going forward. Leases with lease terms of 12 months or longer will be subject to the new requirements. Fundamentally, the criteria used to determine lease classification will remain the same, but will be more subjective under the new standard. The new accounting guidance is effective for annual periods beginning after December 15, 2018 with early adoption permitted. The guidance will be applied by means of a modified retrospective approach. The modified retrospective approach will require lessees and lessors to recognize and measure leases at the beginning of the earliest period presented as well as a number of optional practical expedients that entities may elect to apply. Management is analyzing the impact of this new standard and, at this time, cannot estimate the impact of adoption. Management expects the new standard to impact the Registrants’ financial position, but not the Registrants’ results of operations or cash flows. Management plans to adopt ASU 2016-02 effective January 1, 2019. ASU 2016-09 “Compensation – Stock Compensation” (ASU 2016-09) In March 2016, the FASB issued ASU 2016-09 simplifying the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities and classification on the statements of cash flows. Under the new standard, all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) should be recognized as income tax expense or benefit on the statements of income. Under current GAAP, excess tax benefits are recognized in additional paid-in capital while tax deficiencies are recognized either as an offset to accumulated excess tax benefits, if any, or on the statements of income. The new accounting guidance is effective for annual periods beginning after December 15, 2016. Early adoption is permitted in any interim or annual period. Certain provisions require retrospective/modified retrospective transition while others are to be applied prospectively. Management plans to adopt ASU 2016-09 effective January 1, 2017. |
Comprehensive Income
Comprehensive Income | 3 Months Ended |
Mar. 31, 2016 | |
Comprehensive Income | COMPREHENSIVE INCOME The disclosures in this note apply to all Registrants unless indicated otherwise. Presentation of Comprehensive Income The following tables provide the components of changes in AOCI and details of reclassifications from AOCI for the three months ended March 31, 2016 and 2015 . The amortization of pension and OPEB AOCI components are included in the computation of net periodic pension and OPEB costs. See Note 7 for additional details. AEP Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Commodity Interest Rate and Foreign Currency Securities Available for Sale Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (5.2 ) $ (17.2 ) $ 7.1 $ (111.8 ) $ (127.1 ) Change in Fair Value Recognized in AOCI (8.1 ) — 0.6 — (7.5 ) Amount of (Gain) Loss Reclassified from AOCI Generation & Marketing Revenues (8.6 ) — — — (8.6 ) Purchased Electricity for Resale 9.2 — — — 9.2 Interest Expense — 0.5 — — 0.5 Amortization of Prior Service Cost (Credit) — — — (4.9 ) (4.9 ) Amortization of Actuarial (Gains)/Losses — — — 5.1 5.1 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.6 0.5 — 0.2 1.3 Income Tax (Expense) Credit 0.2 0.2 — 0.1 0.5 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.4 0.3 — 0.1 0.8 Net Current Period Other Comprehensive Income (Loss) (7.7 ) 0.3 0.6 0.1 (6.7 ) Balance in AOCI as of March 31, 2016 $ (12.9 ) $ (16.9 ) $ 7.7 $ (111.7 ) $ (133.8 ) AEP Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Commodity Interest Rate and Foreign Currency Securities Available for Sale Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ 1.6 $ (19.1 ) $ 7.7 $ (93.3 ) $ (103.1 ) Change in Fair Value Recognized in AOCI 0.7 (0.1 ) 0.5 — 1.1 Amount of (Gain) Loss Reclassified from AOCI Generation & Marketing Revenues (12.7 ) — — — (12.7 ) Purchased Electricity for Resale 0.7 — — — 0.7 Interest Expense — 1.2 — — 1.2 Amortization of Prior Service Cost (Credit) — — — (4.8 ) (4.8 ) Amortization of Actuarial (Gains)/Losses — — — 5.3 5.3 Reclassifications from AOCI, before Income Tax (Expense) Credit (12.0 ) 1.2 — 0.5 (10.3 ) Income Tax (Expense) Credit (4.2 ) 0.4 — 0.1 (3.7 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (7.8 ) 0.8 — 0.4 (6.6 ) Net Current Period Other Comprehensive Income (Loss) (7.1 ) 0.7 0.5 0.4 (5.5 ) Pension and OPEB Adjustment Related to Mitchell Plant — — — 5.1 5.1 Balance in AOCI as of March 31, 2015 $ (5.5 ) $ (18.4 ) $ 8.2 $ (87.8 ) $ (103.5 ) APCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ 3.6 $ (6.4 ) $ (2.8 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) — (0.3 ) Amortization of Prior Service Cost (Credit) — (1.2 ) (1.2 ) Amortization of Actuarial (Gains)/Losses — 0.7 0.7 Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) (0.5 ) (0.8 ) Income Tax (Expense) Credit (0.1 ) (0.2 ) (0.3 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) (0.3 ) (0.5 ) Net Current Period Other Comprehensive Income (Loss) (0.2 ) (0.3 ) (0.5 ) Balance in AOCI as of March 31, 2016 $ 3.4 $ (6.7 ) $ (3.3 ) APCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ 3.9 $ 1.1 $ 5.0 Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.2 — 0.2 Amortization of Prior Service Cost (Credit) — (1.3 ) (1.3 ) Amortization of Actuarial (Gains)/Losses — 0.6 0.6 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.2 (0.7 ) (0.5 ) Income Tax (Expense) Credit 0.1 (0.3 ) (0.2 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.1 (0.4 ) (0.3 ) Net Current Period Other Comprehensive Income (Loss) 0.1 (0.4 ) (0.3 ) Balance in AOCI as of March 31, 2015 $ 4.0 $ 0.7 $ 4.7 I&M Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (13.3 ) $ (3.4 ) $ (16.7 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.5 — 0.5 Amortization of Prior Service Cost (Credit) — (0.2 ) (0.2 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.5 — 0.5 Income Tax (Expense) Credit 0.1 — 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.4 — 0.4 Net Current Period Other Comprehensive Income (Loss) 0.4 — 0.4 Balance in AOCI as of March 31, 2016 $ (12.9 ) $ (3.4 ) $ (16.3 ) I&M Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ (14.4 ) $ 0.1 $ (14.3 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.4 — 0.4 Amortization of Prior Service Cost (Credit) — (0.2 ) (0.2 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.4 — 0.4 Income Tax (Expense) Credit 0.1 — 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.3 — 0.3 Net Current Period Other Comprehensive Income (Loss) 0.3 — 0.3 Balance in AOCI as of March 31, 2015 $ (14.1 ) $ 0.1 $ (14.0 ) OPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2015 $ 4.3 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.5 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.5 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.4 ) Net Current Period Other Comprehensive Loss (0.4 ) Balance in AOCI as of March 31, 2016 $ 3.9 OPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2014 $ 5.6 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.5 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.5 ) Income Tax (Expense) Credit (0.2 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.3 ) Net Current Period Other Comprehensive Loss (0.3 ) Balance in AOCI as of March 31, 2015 $ 5.3 PSO Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2015 $ 4.2 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) Net Current Period Other Comprehensive Loss (0.2 ) Balance in AOCI as of March 31, 2016 $ 4.0 PSO Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2014 $ 5.0 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) Net Current Period Other Comprehensive Loss (0.2 ) Balance in AOCI as of March 31, 2015 $ 4.8 SWEPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (9.1 ) $ (0.3 ) $ (9.4 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.7 — 0.7 Amortization of Prior Service Cost (Credit) — (0.5 ) (0.5 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.7 (0.3 ) 0.4 Income Tax (Expense) Credit 0.2 (0.1 ) 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.5 (0.2 ) 0.3 Net Current Period Other Comprehensive Income (Loss) 0.5 (0.2 ) 0.3 Balance in AOCI as of March 31, 2016 $ (8.6 ) $ (0.5 ) $ (9.1 ) SWEPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ (11.1 ) $ 3.6 $ (7.5 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.9 — 0.9 Amortization of Prior Service Cost (Credit) — (0.5 ) (0.5 ) Amortization of Actuarial (Gains)/Losses — 0.1 0.1 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.9 (0.4 ) 0.5 Income Tax (Expense) Credit 0.3 (0.1 ) 0.2 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.6 (0.3 ) 0.3 Net Current Period Other Comprehensive Income (Loss) 0.6 (0.3 ) 0.3 Balance in AOCI as of March 31, 2015 $ (10.5 ) $ 3.3 $ (7.2 ) |
Appalachian Power Co [Member] | |
Comprehensive Income | COMPREHENSIVE INCOME The disclosures in this note apply to all Registrants unless indicated otherwise. Presentation of Comprehensive Income The following tables provide the components of changes in AOCI and details of reclassifications from AOCI for the three months ended March 31, 2016 and 2015 . The amortization of pension and OPEB AOCI components are included in the computation of net periodic pension and OPEB costs. See Note 7 for additional details. AEP Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Commodity Interest Rate and Foreign Currency Securities Available for Sale Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (5.2 ) $ (17.2 ) $ 7.1 $ (111.8 ) $ (127.1 ) Change in Fair Value Recognized in AOCI (8.1 ) — 0.6 — (7.5 ) Amount of (Gain) Loss Reclassified from AOCI Generation & Marketing Revenues (8.6 ) — — — (8.6 ) Purchased Electricity for Resale 9.2 — — — 9.2 Interest Expense — 0.5 — — 0.5 Amortization of Prior Service Cost (Credit) — — — (4.9 ) (4.9 ) Amortization of Actuarial (Gains)/Losses — — — 5.1 5.1 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.6 0.5 — 0.2 1.3 Income Tax (Expense) Credit 0.2 0.2 — 0.1 0.5 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.4 0.3 — 0.1 0.8 Net Current Period Other Comprehensive Income (Loss) (7.7 ) 0.3 0.6 0.1 (6.7 ) Balance in AOCI as of March 31, 2016 $ (12.9 ) $ (16.9 ) $ 7.7 $ (111.7 ) $ (133.8 ) AEP Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Commodity Interest Rate and Foreign Currency Securities Available for Sale Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ 1.6 $ (19.1 ) $ 7.7 $ (93.3 ) $ (103.1 ) Change in Fair Value Recognized in AOCI 0.7 (0.1 ) 0.5 — 1.1 Amount of (Gain) Loss Reclassified from AOCI Generation & Marketing Revenues (12.7 ) — — — (12.7 ) Purchased Electricity for Resale 0.7 — — — 0.7 Interest Expense — 1.2 — — 1.2 Amortization of Prior Service Cost (Credit) — — — (4.8 ) (4.8 ) Amortization of Actuarial (Gains)/Losses — — — 5.3 5.3 Reclassifications from AOCI, before Income Tax (Expense) Credit (12.0 ) 1.2 — 0.5 (10.3 ) Income Tax (Expense) Credit (4.2 ) 0.4 — 0.1 (3.7 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (7.8 ) 0.8 — 0.4 (6.6 ) Net Current Period Other Comprehensive Income (Loss) (7.1 ) 0.7 0.5 0.4 (5.5 ) Pension and OPEB Adjustment Related to Mitchell Plant — — — 5.1 5.1 Balance in AOCI as of March 31, 2015 $ (5.5 ) $ (18.4 ) $ 8.2 $ (87.8 ) $ (103.5 ) APCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ 3.6 $ (6.4 ) $ (2.8 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) — (0.3 ) Amortization of Prior Service Cost (Credit) — (1.2 ) (1.2 ) Amortization of Actuarial (Gains)/Losses — 0.7 0.7 Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) (0.5 ) (0.8 ) Income Tax (Expense) Credit (0.1 ) (0.2 ) (0.3 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) (0.3 ) (0.5 ) Net Current Period Other Comprehensive Income (Loss) (0.2 ) (0.3 ) (0.5 ) Balance in AOCI as of March 31, 2016 $ 3.4 $ (6.7 ) $ (3.3 ) APCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ 3.9 $ 1.1 $ 5.0 Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.2 — 0.2 Amortization of Prior Service Cost (Credit) — (1.3 ) (1.3 ) Amortization of Actuarial (Gains)/Losses — 0.6 0.6 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.2 (0.7 ) (0.5 ) Income Tax (Expense) Credit 0.1 (0.3 ) (0.2 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.1 (0.4 ) (0.3 ) Net Current Period Other Comprehensive Income (Loss) 0.1 (0.4 ) (0.3 ) Balance in AOCI as of March 31, 2015 $ 4.0 $ 0.7 $ 4.7 I&M Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (13.3 ) $ (3.4 ) $ (16.7 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.5 — 0.5 Amortization of Prior Service Cost (Credit) — (0.2 ) (0.2 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.5 — 0.5 Income Tax (Expense) Credit 0.1 — 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.4 — 0.4 Net Current Period Other Comprehensive Income (Loss) 0.4 — 0.4 Balance in AOCI as of March 31, 2016 $ (12.9 ) $ (3.4 ) $ (16.3 ) I&M Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ (14.4 ) $ 0.1 $ (14.3 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.4 — 0.4 Amortization of Prior Service Cost (Credit) — (0.2 ) (0.2 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.4 — 0.4 Income Tax (Expense) Credit 0.1 — 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.3 — 0.3 Net Current Period Other Comprehensive Income (Loss) 0.3 — 0.3 Balance in AOCI as of March 31, 2015 $ (14.1 ) $ 0.1 $ (14.0 ) OPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2015 $ 4.3 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.5 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.5 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.4 ) Net Current Period Other Comprehensive Loss (0.4 ) Balance in AOCI as of March 31, 2016 $ 3.9 OPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2014 $ 5.6 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.5 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.5 ) Income Tax (Expense) Credit (0.2 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.3 ) Net Current Period Other Comprehensive Loss (0.3 ) Balance in AOCI as of March 31, 2015 $ 5.3 PSO Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2015 $ 4.2 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) Net Current Period Other Comprehensive Loss (0.2 ) Balance in AOCI as of March 31, 2016 $ 4.0 PSO Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2014 $ 5.0 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) Net Current Period Other Comprehensive Loss (0.2 ) Balance in AOCI as of March 31, 2015 $ 4.8 SWEPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (9.1 ) $ (0.3 ) $ (9.4 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.7 — 0.7 Amortization of Prior Service Cost (Credit) — (0.5 ) (0.5 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.7 (0.3 ) 0.4 Income Tax (Expense) Credit 0.2 (0.1 ) 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.5 (0.2 ) 0.3 Net Current Period Other Comprehensive Income (Loss) 0.5 (0.2 ) 0.3 Balance in AOCI as of March 31, 2016 $ (8.6 ) $ (0.5 ) $ (9.1 ) SWEPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ (11.1 ) $ 3.6 $ (7.5 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.9 — 0.9 Amortization of Prior Service Cost (Credit) — (0.5 ) (0.5 ) Amortization of Actuarial (Gains)/Losses — 0.1 0.1 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.9 (0.4 ) 0.5 Income Tax (Expense) Credit 0.3 (0.1 ) 0.2 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.6 (0.3 ) 0.3 Net Current Period Other Comprehensive Income (Loss) 0.6 (0.3 ) 0.3 Balance in AOCI as of March 31, 2015 $ (10.5 ) $ 3.3 $ (7.2 ) |
Indiana Michigan Power Co [Member] | |
Comprehensive Income | COMPREHENSIVE INCOME The disclosures in this note apply to all Registrants unless indicated otherwise. Presentation of Comprehensive Income The following tables provide the components of changes in AOCI and details of reclassifications from AOCI for the three months ended March 31, 2016 and 2015 . The amortization of pension and OPEB AOCI components are included in the computation of net periodic pension and OPEB costs. See Note 7 for additional details. AEP Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Commodity Interest Rate and Foreign Currency Securities Available for Sale Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (5.2 ) $ (17.2 ) $ 7.1 $ (111.8 ) $ (127.1 ) Change in Fair Value Recognized in AOCI (8.1 ) — 0.6 — (7.5 ) Amount of (Gain) Loss Reclassified from AOCI Generation & Marketing Revenues (8.6 ) — — — (8.6 ) Purchased Electricity for Resale 9.2 — — — 9.2 Interest Expense — 0.5 — — 0.5 Amortization of Prior Service Cost (Credit) — — — (4.9 ) (4.9 ) Amortization of Actuarial (Gains)/Losses — — — 5.1 5.1 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.6 0.5 — 0.2 1.3 Income Tax (Expense) Credit 0.2 0.2 — 0.1 0.5 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.4 0.3 — 0.1 0.8 Net Current Period Other Comprehensive Income (Loss) (7.7 ) 0.3 0.6 0.1 (6.7 ) Balance in AOCI as of March 31, 2016 $ (12.9 ) $ (16.9 ) $ 7.7 $ (111.7 ) $ (133.8 ) AEP Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Commodity Interest Rate and Foreign Currency Securities Available for Sale Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ 1.6 $ (19.1 ) $ 7.7 $ (93.3 ) $ (103.1 ) Change in Fair Value Recognized in AOCI 0.7 (0.1 ) 0.5 — 1.1 Amount of (Gain) Loss Reclassified from AOCI Generation & Marketing Revenues (12.7 ) — — — (12.7 ) Purchased Electricity for Resale 0.7 — — — 0.7 Interest Expense — 1.2 — — 1.2 Amortization of Prior Service Cost (Credit) — — — (4.8 ) (4.8 ) Amortization of Actuarial (Gains)/Losses — — — 5.3 5.3 Reclassifications from AOCI, before Income Tax (Expense) Credit (12.0 ) 1.2 — 0.5 (10.3 ) Income Tax (Expense) Credit (4.2 ) 0.4 — 0.1 (3.7 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (7.8 ) 0.8 — 0.4 (6.6 ) Net Current Period Other Comprehensive Income (Loss) (7.1 ) 0.7 0.5 0.4 (5.5 ) Pension and OPEB Adjustment Related to Mitchell Plant — — — 5.1 5.1 Balance in AOCI as of March 31, 2015 $ (5.5 ) $ (18.4 ) $ 8.2 $ (87.8 ) $ (103.5 ) APCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ 3.6 $ (6.4 ) $ (2.8 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) — (0.3 ) Amortization of Prior Service Cost (Credit) — (1.2 ) (1.2 ) Amortization of Actuarial (Gains)/Losses — 0.7 0.7 Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) (0.5 ) (0.8 ) Income Tax (Expense) Credit (0.1 ) (0.2 ) (0.3 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) (0.3 ) (0.5 ) Net Current Period Other Comprehensive Income (Loss) (0.2 ) (0.3 ) (0.5 ) Balance in AOCI as of March 31, 2016 $ 3.4 $ (6.7 ) $ (3.3 ) APCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ 3.9 $ 1.1 $ 5.0 Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.2 — 0.2 Amortization of Prior Service Cost (Credit) — (1.3 ) (1.3 ) Amortization of Actuarial (Gains)/Losses — 0.6 0.6 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.2 (0.7 ) (0.5 ) Income Tax (Expense) Credit 0.1 (0.3 ) (0.2 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.1 (0.4 ) (0.3 ) Net Current Period Other Comprehensive Income (Loss) 0.1 (0.4 ) (0.3 ) Balance in AOCI as of March 31, 2015 $ 4.0 $ 0.7 $ 4.7 I&M Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (13.3 ) $ (3.4 ) $ (16.7 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.5 — 0.5 Amortization of Prior Service Cost (Credit) — (0.2 ) (0.2 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.5 — 0.5 Income Tax (Expense) Credit 0.1 — 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.4 — 0.4 Net Current Period Other Comprehensive Income (Loss) 0.4 — 0.4 Balance in AOCI as of March 31, 2016 $ (12.9 ) $ (3.4 ) $ (16.3 ) I&M Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ (14.4 ) $ 0.1 $ (14.3 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.4 — 0.4 Amortization of Prior Service Cost (Credit) — (0.2 ) (0.2 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.4 — 0.4 Income Tax (Expense) Credit 0.1 — 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.3 — 0.3 Net Current Period Other Comprehensive Income (Loss) 0.3 — 0.3 Balance in AOCI as of March 31, 2015 $ (14.1 ) $ 0.1 $ (14.0 ) OPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2015 $ 4.3 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.5 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.5 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.4 ) Net Current Period Other Comprehensive Loss (0.4 ) Balance in AOCI as of March 31, 2016 $ 3.9 OPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2014 $ 5.6 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.5 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.5 ) Income Tax (Expense) Credit (0.2 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.3 ) Net Current Period Other Comprehensive Loss (0.3 ) Balance in AOCI as of March 31, 2015 $ 5.3 PSO Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2015 $ 4.2 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) Net Current Period Other Comprehensive Loss (0.2 ) Balance in AOCI as of March 31, 2016 $ 4.0 PSO Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2014 $ 5.0 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) Net Current Period Other Comprehensive Loss (0.2 ) Balance in AOCI as of March 31, 2015 $ 4.8 SWEPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (9.1 ) $ (0.3 ) $ (9.4 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.7 — 0.7 Amortization of Prior Service Cost (Credit) — (0.5 ) (0.5 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.7 (0.3 ) 0.4 Income Tax (Expense) Credit 0.2 (0.1 ) 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.5 (0.2 ) 0.3 Net Current Period Other Comprehensive Income (Loss) 0.5 (0.2 ) 0.3 Balance in AOCI as of March 31, 2016 $ (8.6 ) $ (0.5 ) $ (9.1 ) SWEPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ (11.1 ) $ 3.6 $ (7.5 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.9 — 0.9 Amortization of Prior Service Cost (Credit) — (0.5 ) (0.5 ) Amortization of Actuarial (Gains)/Losses — 0.1 0.1 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.9 (0.4 ) 0.5 Income Tax (Expense) Credit 0.3 (0.1 ) 0.2 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.6 (0.3 ) 0.3 Net Current Period Other Comprehensive Income (Loss) 0.6 (0.3 ) 0.3 Balance in AOCI as of March 31, 2015 $ (10.5 ) $ 3.3 $ (7.2 ) |
Ohio Power Co [Member] | |
Comprehensive Income | COMPREHENSIVE INCOME The disclosures in this note apply to all Registrants unless indicated otherwise. Presentation of Comprehensive Income The following tables provide the components of changes in AOCI and details of reclassifications from AOCI for the three months ended March 31, 2016 and 2015 . The amortization of pension and OPEB AOCI components are included in the computation of net periodic pension and OPEB costs. See Note 7 for additional details. AEP Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Commodity Interest Rate and Foreign Currency Securities Available for Sale Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (5.2 ) $ (17.2 ) $ 7.1 $ (111.8 ) $ (127.1 ) Change in Fair Value Recognized in AOCI (8.1 ) — 0.6 — (7.5 ) Amount of (Gain) Loss Reclassified from AOCI Generation & Marketing Revenues (8.6 ) — — — (8.6 ) Purchased Electricity for Resale 9.2 — — — 9.2 Interest Expense — 0.5 — — 0.5 Amortization of Prior Service Cost (Credit) — — — (4.9 ) (4.9 ) Amortization of Actuarial (Gains)/Losses — — — 5.1 5.1 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.6 0.5 — 0.2 1.3 Income Tax (Expense) Credit 0.2 0.2 — 0.1 0.5 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.4 0.3 — 0.1 0.8 Net Current Period Other Comprehensive Income (Loss) (7.7 ) 0.3 0.6 0.1 (6.7 ) Balance in AOCI as of March 31, 2016 $ (12.9 ) $ (16.9 ) $ 7.7 $ (111.7 ) $ (133.8 ) AEP Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Commodity Interest Rate and Foreign Currency Securities Available for Sale Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ 1.6 $ (19.1 ) $ 7.7 $ (93.3 ) $ (103.1 ) Change in Fair Value Recognized in AOCI 0.7 (0.1 ) 0.5 — 1.1 Amount of (Gain) Loss Reclassified from AOCI Generation & Marketing Revenues (12.7 ) — — — (12.7 ) Purchased Electricity for Resale 0.7 — — — 0.7 Interest Expense — 1.2 — — 1.2 Amortization of Prior Service Cost (Credit) — — — (4.8 ) (4.8 ) Amortization of Actuarial (Gains)/Losses — — — 5.3 5.3 Reclassifications from AOCI, before Income Tax (Expense) Credit (12.0 ) 1.2 — 0.5 (10.3 ) Income Tax (Expense) Credit (4.2 ) 0.4 — 0.1 (3.7 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (7.8 ) 0.8 — 0.4 (6.6 ) Net Current Period Other Comprehensive Income (Loss) (7.1 ) 0.7 0.5 0.4 (5.5 ) Pension and OPEB Adjustment Related to Mitchell Plant — — — 5.1 5.1 Balance in AOCI as of March 31, 2015 $ (5.5 ) $ (18.4 ) $ 8.2 $ (87.8 ) $ (103.5 ) APCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ 3.6 $ (6.4 ) $ (2.8 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) — (0.3 ) Amortization of Prior Service Cost (Credit) — (1.2 ) (1.2 ) Amortization of Actuarial (Gains)/Losses — 0.7 0.7 Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) (0.5 ) (0.8 ) Income Tax (Expense) Credit (0.1 ) (0.2 ) (0.3 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) (0.3 ) (0.5 ) Net Current Period Other Comprehensive Income (Loss) (0.2 ) (0.3 ) (0.5 ) Balance in AOCI as of March 31, 2016 $ 3.4 $ (6.7 ) $ (3.3 ) APCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ 3.9 $ 1.1 $ 5.0 Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.2 — 0.2 Amortization of Prior Service Cost (Credit) — (1.3 ) (1.3 ) Amortization of Actuarial (Gains)/Losses — 0.6 0.6 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.2 (0.7 ) (0.5 ) Income Tax (Expense) Credit 0.1 (0.3 ) (0.2 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.1 (0.4 ) (0.3 ) Net Current Period Other Comprehensive Income (Loss) 0.1 (0.4 ) (0.3 ) Balance in AOCI as of March 31, 2015 $ 4.0 $ 0.7 $ 4.7 I&M Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (13.3 ) $ (3.4 ) $ (16.7 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.5 — 0.5 Amortization of Prior Service Cost (Credit) — (0.2 ) (0.2 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.5 — 0.5 Income Tax (Expense) Credit 0.1 — 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.4 — 0.4 Net Current Period Other Comprehensive Income (Loss) 0.4 — 0.4 Balance in AOCI as of March 31, 2016 $ (12.9 ) $ (3.4 ) $ (16.3 ) I&M Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ (14.4 ) $ 0.1 $ (14.3 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.4 — 0.4 Amortization of Prior Service Cost (Credit) — (0.2 ) (0.2 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.4 — 0.4 Income Tax (Expense) Credit 0.1 — 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.3 — 0.3 Net Current Period Other Comprehensive Income (Loss) 0.3 — 0.3 Balance in AOCI as of March 31, 2015 $ (14.1 ) $ 0.1 $ (14.0 ) OPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2015 $ 4.3 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.5 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.5 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.4 ) Net Current Period Other Comprehensive Loss (0.4 ) Balance in AOCI as of March 31, 2016 $ 3.9 OPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2014 $ 5.6 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.5 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.5 ) Income Tax (Expense) Credit (0.2 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.3 ) Net Current Period Other Comprehensive Loss (0.3 ) Balance in AOCI as of March 31, 2015 $ 5.3 PSO Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2015 $ 4.2 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) Net Current Period Other Comprehensive Loss (0.2 ) Balance in AOCI as of March 31, 2016 $ 4.0 PSO Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2014 $ 5.0 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) Net Current Period Other Comprehensive Loss (0.2 ) Balance in AOCI as of March 31, 2015 $ 4.8 SWEPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (9.1 ) $ (0.3 ) $ (9.4 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.7 — 0.7 Amortization of Prior Service Cost (Credit) — (0.5 ) (0.5 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.7 (0.3 ) 0.4 Income Tax (Expense) Credit 0.2 (0.1 ) 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.5 (0.2 ) 0.3 Net Current Period Other Comprehensive Income (Loss) 0.5 (0.2 ) 0.3 Balance in AOCI as of March 31, 2016 $ (8.6 ) $ (0.5 ) $ (9.1 ) SWEPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ (11.1 ) $ 3.6 $ (7.5 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.9 — 0.9 Amortization of Prior Service Cost (Credit) — (0.5 ) (0.5 ) Amortization of Actuarial (Gains)/Losses — 0.1 0.1 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.9 (0.4 ) 0.5 Income Tax (Expense) Credit 0.3 (0.1 ) 0.2 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.6 (0.3 ) 0.3 Net Current Period Other Comprehensive Income (Loss) 0.6 (0.3 ) 0.3 Balance in AOCI as of March 31, 2015 $ (10.5 ) $ 3.3 $ (7.2 ) |
Public Service Co Of Oklahoma [Member] | |
Comprehensive Income | COMPREHENSIVE INCOME The disclosures in this note apply to all Registrants unless indicated otherwise. Presentation of Comprehensive Income The following tables provide the components of changes in AOCI and details of reclassifications from AOCI for the three months ended March 31, 2016 and 2015 . The amortization of pension and OPEB AOCI components are included in the computation of net periodic pension and OPEB costs. See Note 7 for additional details. AEP Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Commodity Interest Rate and Foreign Currency Securities Available for Sale Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (5.2 ) $ (17.2 ) $ 7.1 $ (111.8 ) $ (127.1 ) Change in Fair Value Recognized in AOCI (8.1 ) — 0.6 — (7.5 ) Amount of (Gain) Loss Reclassified from AOCI Generation & Marketing Revenues (8.6 ) — — — (8.6 ) Purchased Electricity for Resale 9.2 — — — 9.2 Interest Expense — 0.5 — — 0.5 Amortization of Prior Service Cost (Credit) — — — (4.9 ) (4.9 ) Amortization of Actuarial (Gains)/Losses — — — 5.1 5.1 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.6 0.5 — 0.2 1.3 Income Tax (Expense) Credit 0.2 0.2 — 0.1 0.5 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.4 0.3 — 0.1 0.8 Net Current Period Other Comprehensive Income (Loss) (7.7 ) 0.3 0.6 0.1 (6.7 ) Balance in AOCI as of March 31, 2016 $ (12.9 ) $ (16.9 ) $ 7.7 $ (111.7 ) $ (133.8 ) AEP Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Commodity Interest Rate and Foreign Currency Securities Available for Sale Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ 1.6 $ (19.1 ) $ 7.7 $ (93.3 ) $ (103.1 ) Change in Fair Value Recognized in AOCI 0.7 (0.1 ) 0.5 — 1.1 Amount of (Gain) Loss Reclassified from AOCI Generation & Marketing Revenues (12.7 ) — — — (12.7 ) Purchased Electricity for Resale 0.7 — — — 0.7 Interest Expense — 1.2 — — 1.2 Amortization of Prior Service Cost (Credit) — — — (4.8 ) (4.8 ) Amortization of Actuarial (Gains)/Losses — — — 5.3 5.3 Reclassifications from AOCI, before Income Tax (Expense) Credit (12.0 ) 1.2 — 0.5 (10.3 ) Income Tax (Expense) Credit (4.2 ) 0.4 — 0.1 (3.7 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (7.8 ) 0.8 — 0.4 (6.6 ) Net Current Period Other Comprehensive Income (Loss) (7.1 ) 0.7 0.5 0.4 (5.5 ) Pension and OPEB Adjustment Related to Mitchell Plant — — — 5.1 5.1 Balance in AOCI as of March 31, 2015 $ (5.5 ) $ (18.4 ) $ 8.2 $ (87.8 ) $ (103.5 ) APCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ 3.6 $ (6.4 ) $ (2.8 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) — (0.3 ) Amortization of Prior Service Cost (Credit) — (1.2 ) (1.2 ) Amortization of Actuarial (Gains)/Losses — 0.7 0.7 Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) (0.5 ) (0.8 ) Income Tax (Expense) Credit (0.1 ) (0.2 ) (0.3 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) (0.3 ) (0.5 ) Net Current Period Other Comprehensive Income (Loss) (0.2 ) (0.3 ) (0.5 ) Balance in AOCI as of March 31, 2016 $ 3.4 $ (6.7 ) $ (3.3 ) APCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ 3.9 $ 1.1 $ 5.0 Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.2 — 0.2 Amortization of Prior Service Cost (Credit) — (1.3 ) (1.3 ) Amortization of Actuarial (Gains)/Losses — 0.6 0.6 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.2 (0.7 ) (0.5 ) Income Tax (Expense) Credit 0.1 (0.3 ) (0.2 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.1 (0.4 ) (0.3 ) Net Current Period Other Comprehensive Income (Loss) 0.1 (0.4 ) (0.3 ) Balance in AOCI as of March 31, 2015 $ 4.0 $ 0.7 $ 4.7 I&M Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (13.3 ) $ (3.4 ) $ (16.7 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.5 — 0.5 Amortization of Prior Service Cost (Credit) — (0.2 ) (0.2 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.5 — 0.5 Income Tax (Expense) Credit 0.1 — 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.4 — 0.4 Net Current Period Other Comprehensive Income (Loss) 0.4 — 0.4 Balance in AOCI as of March 31, 2016 $ (12.9 ) $ (3.4 ) $ (16.3 ) I&M Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ (14.4 ) $ 0.1 $ (14.3 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.4 — 0.4 Amortization of Prior Service Cost (Credit) — (0.2 ) (0.2 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.4 — 0.4 Income Tax (Expense) Credit 0.1 — 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.3 — 0.3 Net Current Period Other Comprehensive Income (Loss) 0.3 — 0.3 Balance in AOCI as of March 31, 2015 $ (14.1 ) $ 0.1 $ (14.0 ) OPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2015 $ 4.3 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.5 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.5 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.4 ) Net Current Period Other Comprehensive Loss (0.4 ) Balance in AOCI as of March 31, 2016 $ 3.9 OPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2014 $ 5.6 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.5 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.5 ) Income Tax (Expense) Credit (0.2 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.3 ) Net Current Period Other Comprehensive Loss (0.3 ) Balance in AOCI as of March 31, 2015 $ 5.3 PSO Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2015 $ 4.2 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) Net Current Period Other Comprehensive Loss (0.2 ) Balance in AOCI as of March 31, 2016 $ 4.0 PSO Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2014 $ 5.0 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) Net Current Period Other Comprehensive Loss (0.2 ) Balance in AOCI as of March 31, 2015 $ 4.8 SWEPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (9.1 ) $ (0.3 ) $ (9.4 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.7 — 0.7 Amortization of Prior Service Cost (Credit) — (0.5 ) (0.5 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.7 (0.3 ) 0.4 Income Tax (Expense) Credit 0.2 (0.1 ) 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.5 (0.2 ) 0.3 Net Current Period Other Comprehensive Income (Loss) 0.5 (0.2 ) 0.3 Balance in AOCI as of March 31, 2016 $ (8.6 ) $ (0.5 ) $ (9.1 ) SWEPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ (11.1 ) $ 3.6 $ (7.5 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.9 — 0.9 Amortization of Prior Service Cost (Credit) — (0.5 ) (0.5 ) Amortization of Actuarial (Gains)/Losses — 0.1 0.1 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.9 (0.4 ) 0.5 Income Tax (Expense) Credit 0.3 (0.1 ) 0.2 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.6 (0.3 ) 0.3 Net Current Period Other Comprehensive Income (Loss) 0.6 (0.3 ) 0.3 Balance in AOCI as of March 31, 2015 $ (10.5 ) $ 3.3 $ (7.2 ) |
Southwestern Electric Power Co [Member] | |
Comprehensive Income | COMPREHENSIVE INCOME The disclosures in this note apply to all Registrants unless indicated otherwise. Presentation of Comprehensive Income The following tables provide the components of changes in AOCI and details of reclassifications from AOCI for the three months ended March 31, 2016 and 2015 . The amortization of pension and OPEB AOCI components are included in the computation of net periodic pension and OPEB costs. See Note 7 for additional details. AEP Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Commodity Interest Rate and Foreign Currency Securities Available for Sale Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (5.2 ) $ (17.2 ) $ 7.1 $ (111.8 ) $ (127.1 ) Change in Fair Value Recognized in AOCI (8.1 ) — 0.6 — (7.5 ) Amount of (Gain) Loss Reclassified from AOCI Generation & Marketing Revenues (8.6 ) — — — (8.6 ) Purchased Electricity for Resale 9.2 — — — 9.2 Interest Expense — 0.5 — — 0.5 Amortization of Prior Service Cost (Credit) — — — (4.9 ) (4.9 ) Amortization of Actuarial (Gains)/Losses — — — 5.1 5.1 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.6 0.5 — 0.2 1.3 Income Tax (Expense) Credit 0.2 0.2 — 0.1 0.5 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.4 0.3 — 0.1 0.8 Net Current Period Other Comprehensive Income (Loss) (7.7 ) 0.3 0.6 0.1 (6.7 ) Balance in AOCI as of March 31, 2016 $ (12.9 ) $ (16.9 ) $ 7.7 $ (111.7 ) $ (133.8 ) AEP Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Commodity Interest Rate and Foreign Currency Securities Available for Sale Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ 1.6 $ (19.1 ) $ 7.7 $ (93.3 ) $ (103.1 ) Change in Fair Value Recognized in AOCI 0.7 (0.1 ) 0.5 — 1.1 Amount of (Gain) Loss Reclassified from AOCI Generation & Marketing Revenues (12.7 ) — — — (12.7 ) Purchased Electricity for Resale 0.7 — — — 0.7 Interest Expense — 1.2 — — 1.2 Amortization of Prior Service Cost (Credit) — — — (4.8 ) (4.8 ) Amortization of Actuarial (Gains)/Losses — — — 5.3 5.3 Reclassifications from AOCI, before Income Tax (Expense) Credit (12.0 ) 1.2 — 0.5 (10.3 ) Income Tax (Expense) Credit (4.2 ) 0.4 — 0.1 (3.7 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (7.8 ) 0.8 — 0.4 (6.6 ) Net Current Period Other Comprehensive Income (Loss) (7.1 ) 0.7 0.5 0.4 (5.5 ) Pension and OPEB Adjustment Related to Mitchell Plant — — — 5.1 5.1 Balance in AOCI as of March 31, 2015 $ (5.5 ) $ (18.4 ) $ 8.2 $ (87.8 ) $ (103.5 ) APCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ 3.6 $ (6.4 ) $ (2.8 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) — (0.3 ) Amortization of Prior Service Cost (Credit) — (1.2 ) (1.2 ) Amortization of Actuarial (Gains)/Losses — 0.7 0.7 Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) (0.5 ) (0.8 ) Income Tax (Expense) Credit (0.1 ) (0.2 ) (0.3 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) (0.3 ) (0.5 ) Net Current Period Other Comprehensive Income (Loss) (0.2 ) (0.3 ) (0.5 ) Balance in AOCI as of March 31, 2016 $ 3.4 $ (6.7 ) $ (3.3 ) APCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ 3.9 $ 1.1 $ 5.0 Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.2 — 0.2 Amortization of Prior Service Cost (Credit) — (1.3 ) (1.3 ) Amortization of Actuarial (Gains)/Losses — 0.6 0.6 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.2 (0.7 ) (0.5 ) Income Tax (Expense) Credit 0.1 (0.3 ) (0.2 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.1 (0.4 ) (0.3 ) Net Current Period Other Comprehensive Income (Loss) 0.1 (0.4 ) (0.3 ) Balance in AOCI as of March 31, 2015 $ 4.0 $ 0.7 $ 4.7 I&M Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (13.3 ) $ (3.4 ) $ (16.7 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.5 — 0.5 Amortization of Prior Service Cost (Credit) — (0.2 ) (0.2 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.5 — 0.5 Income Tax (Expense) Credit 0.1 — 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.4 — 0.4 Net Current Period Other Comprehensive Income (Loss) 0.4 — 0.4 Balance in AOCI as of March 31, 2016 $ (12.9 ) $ (3.4 ) $ (16.3 ) I&M Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ (14.4 ) $ 0.1 $ (14.3 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.4 — 0.4 Amortization of Prior Service Cost (Credit) — (0.2 ) (0.2 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.4 — 0.4 Income Tax (Expense) Credit 0.1 — 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.3 — 0.3 Net Current Period Other Comprehensive Income (Loss) 0.3 — 0.3 Balance in AOCI as of March 31, 2015 $ (14.1 ) $ 0.1 $ (14.0 ) OPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2015 $ 4.3 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.5 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.5 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.4 ) Net Current Period Other Comprehensive Loss (0.4 ) Balance in AOCI as of March 31, 2016 $ 3.9 OPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2014 $ 5.6 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.5 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.5 ) Income Tax (Expense) Credit (0.2 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.3 ) Net Current Period Other Comprehensive Loss (0.3 ) Balance in AOCI as of March 31, 2015 $ 5.3 PSO Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2015 $ 4.2 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) Net Current Period Other Comprehensive Loss (0.2 ) Balance in AOCI as of March 31, 2016 $ 4.0 PSO Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2014 $ 5.0 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) Net Current Period Other Comprehensive Loss (0.2 ) Balance in AOCI as of March 31, 2015 $ 4.8 SWEPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (9.1 ) $ (0.3 ) $ (9.4 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.7 — 0.7 Amortization of Prior Service Cost (Credit) — (0.5 ) (0.5 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.7 (0.3 ) 0.4 Income Tax (Expense) Credit 0.2 (0.1 ) 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.5 (0.2 ) 0.3 Net Current Period Other Comprehensive Income (Loss) 0.5 (0.2 ) 0.3 Balance in AOCI as of March 31, 2016 $ (8.6 ) $ (0.5 ) $ (9.1 ) SWEPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ (11.1 ) $ 3.6 $ (7.5 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.9 — 0.9 Amortization of Prior Service Cost (Credit) — (0.5 ) (0.5 ) Amortization of Actuarial (Gains)/Losses — 0.1 0.1 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.9 (0.4 ) 0.5 Income Tax (Expense) Credit 0.3 (0.1 ) 0.2 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.6 (0.3 ) 0.3 Net Current Period Other Comprehensive Income (Loss) 0.6 (0.3 ) 0.3 Balance in AOCI as of March 31, 2015 $ (10.5 ) $ 3.3 $ (7.2 ) |
Rate Matters
Rate Matters | 3 Months Ended |
Mar. 31, 2016 | |
Rate Matters | RATE MATTERS The disclosures in this note apply to all Registrants unless indicated otherwise. As discussed in the 2015 Annual Report, the Registrants are involved in rate and regulatory proceedings at the FERC and their state commissions. The Rate Matters note within the 2015 Annual Report should be read in conjunction with this report to gain a complete understanding of material rate matters still pending that could impact net income, cash flows and possibly financial condition. The following discusses ratemaking developments in 2016 and updates the 2015 Annual Report. Regulatory Assets Pending Final Regulatory Approval AEP March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Earning a Return Storm Related Costs $ 24.8 $ 24.2 Plant Retirement Costs - Materials and Supplies 20.8 20.9 Regulatory Assets Currently Not Earning a Return Plant Retirement Costs - Asset Retirement Obligation Costs 59.8 59.8 Storm Related Costs 23.2 18.2 Peak Demand Reduction/Energy Efficiency 14.1 13.1 Other Regulatory Assets Pending Final Regulatory Approval 35.4 31.7 Total Regulatory Assets Pending Final Regulatory Approval $ 178.1 $ 167.9 APCo March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Earning a Return Plant Retirement Costs - Materials and Supplies $ 9.2 $ 9.3 Regulatory Assets Currently Not Earning a Return Plant Retirement Costs - Asset Retirement Obligation Costs 32.7 32.7 Peak Demand Reduction/Energy Efficiency - Virginia 13.6 12.7 Amos Plant Transfer Costs - West Virginia 2.0 2.0 Other Regulatory Assets Pending Final Regulatory Approval 0.6 0.6 Total Regulatory Assets Pending Final Regulatory Approval $ 58.1 $ 57.3 I&M March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Earning a Return Plant Retirement Costs - Materials and Supplies $ 11.6 $ 11.6 Regulatory Assets Currently Not Earning a Return Plant Retirement Costs - Asset Retirement Obligation Costs - Indiana 27.1 27.1 Cook Plant Turbine 10.4 9.7 Deferred Cook Plant Life Cycle Management Project Costs - Michigan 5.4 4.2 Stranded Costs on Abandoned Plants 3.9 3.9 Rockport Dry Sorbent Injection System - Indiana 3.6 2.8 Other Regulatory Assets Pending Final Regulatory Approval 0.2 — Total Regulatory Assets Pending Final Regulatory Approval $ 62.2 $ 59.3 OPCo March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Not Earning a Return gridSMART ® Costs $ 1.8 $ 1.3 Total Regulatory Assets Pending Final Regulatory Approval $ 1.8 $ 1.3 PSO March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Not Earning a Return Storm Related Costs $ 17.0 $ 12.3 Other Regulatory Assets Pending Final Regulatory Approval 1.1 1.1 Total Regulatory Assets Pending Final Regulatory Approval $ 18.1 $ 13.4 SWEPCo March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Not Earning a Return Shipe Road Transmission Project - FERC $ 3.1 $ 3.1 Asset Retirement Obligation - Arkansas, Louisiana 1.9 1.7 Other Regulatory Assets Pending Final Regulatory Approval 1.4 1.1 Total Regulatory Assets Pending Final Regulatory Approval $ 6.4 $ 5.9 If these costs are ultimately determined not to be recoverable, it could reduce future net income and cash flows and impact financial condition. APCo and WPCo Rate Matters (Applies to AEP and APCo) 2016 West Virginia Expanded Net Energy Charge Filing In March 2016, APCo and WPCo filed their combined annual ENEC filing with the WVPSC which requested an increase in ENEC rates of $108 million ( $86 million related to APCo) to be effective July 2016. The increase primarily relates to recovery of the December 2015 under-recovered ENEC deferral balance and the recovery of costs associated with the continuation and expansion of certain transmission and generation construction projects. If any of these costs are not recoverable, it could reduce future net income and cash flows and impact financial condition. West Virginia Deferred Base Rate Increase In May 2015, the WVPSC issued an order on APCo and WPCo’s combined base rate case. The order included a delayed billing of $25 million ( $22 million related to APCo) of the annual base rate increase to residential customers until July 2016. The order provided for carrying charges based upon a weighted average cost of capital (WACC) rate for the $25 million annual delayed billing through June 2016, and stated recovery would be addressed concurrent with the next ENEC change in rates. In February 2016, APCo and WPCo filed a petition with the WVPSC to implement recovery of the unrecognized delayed billing totaling $29 million ( $26 million related to APCo), which includes carrying charges through June 2016. Recovery of the delayed billing was requested over two years, beginning July 2016, with the unpaid principal subject to carrying charges. An order from the WVPSC is pending. 2015 Virginia Regulatory Asset Proceeding In 2015, the Virginia SCC initiated a proceeding to address the proper treatment of APCo’s authorized regulatory assets. Briefs related to this proceeding were filed by various parties. The Virginia SCC has no statutory deadline to issue its decision in this proceeding. As of March 31, 2016 , APCo’s authorized regulatory assets under review in this proceeding were $8 million . If any of these costs, or any additional costs that may be subject to review, are not recoverable, it could reduce future net income and cash flows and impact financial condition. Virginia Legislation Affecting Biennial Reviews In February 2015, amendments to Virginia law governing the regulation of investor-owned electric utilities were enacted. Under the amended Virginia law, APCo’s existing generation and distribution base rates are frozen until after the Virginia SCC rules on APCo’s next biennial review, which APCo will file in March 2020 for the 2018 and 2019 test years. These amendments also preclude the Virginia SCC from performing biennial reviews of APCo’s earnings for the years 2014 through 2017. APCo’s financial statements adequately address the impact of these amendments. The amendments provide that APCo will absorb its Virginia jurisdictional share of incremental generation and distribution costs incurred during 2014 through 2017 that are associated with severe weather events and/or natural disasters and costs associated with potential asset impairments related to new carbon emission guidelines issued by the Federal EPA. In February 2016, certain APCo industrial customers filed a petition with the Virginia SCC requesting the issuance of a declaratory order that finds the amendments to Virginia law suspending biennial reviews unconstitutional and, accordingly, directs APCo to make biennial review filings beginning in 2016. In February 2016, APCo filed a motion to stay the Virginia SCC’s consideration of the petition due to a pending appeal at the Supreme Court of Virginia by industrial customers of a non-related utility regarding the constitutionality of the amendments. APCo and other parties have filed their responses to the petition. Oral arguments at the Virginia SCC were held in March 2016. Management is unable to predict the outcome of these challenges. If the biennial review process is reinstated in advance of March 2020, it could reduce future net income and cash flows and impact financial condition. ETT Rate Matters (Applies to AEP) ETT Interim Transmission Rates Parent has a 50% equity ownership interest in ETT. Predominantly all of ETT’s revenues are based on interim rate changes that can be filed twice annually and are subject to review and possible true-up in the next filed base rate proceeding. As of March 31, 2016 , AEP’s share of ETT’s cumulative revenues, subject to review, is estimated to be $468 million based upon interim rate increases received from 2009 through 2015. In November 2015, the PUCT ordered ETT to file a base rate case by February 2017. A base rate review could produce a refund if ETT incurs a disallowance of the transmission investment on which an interim increase was based. Management is unable to determine a range of potential losses that are reasonably possible of occurring. A refund of interim transmission rates could reduce future net income and cash flows and impact financial condition. KGPCo Rate Matters (Applies to AEP) Kingsport Base Rate Case In January 2016, KGPCo filed a request with the TRA to increase base rates by $12 million annually based upon a proposed return on common equity of 10.66% . A hearing at the TRA is scheduled for August 2016. If KGPCo does not recover its costs, it could reduce future net income and cash flows and impact financial condition. OPCo Rate Matters (Applies to AEP and OPCo) Ohio Electric Security Plan Filings 2009 – 2011 ESP The PUCO issued an order in March 2009 that modified and approved the ESP which established rates at the start of the April 2009 billing cycle through 2011. The order also provided a phase-in FAC, which was authorized to be recovered through a non-bypassable surcharge over the period 2012 through 2018. In 2012, the PUCO issued an order in a separate proceeding which implemented a PIRR to recover deferred fuel costs in rates beginning September 2012. The PUCO ruled that carrying charges should be calculated without an offset for accumulated deferred income taxes and that a long-term debt rate should be applied when collections begin. In November 2012, OPCo appealed that PUCO order to the Supreme Court of Ohio claiming a long-term debt rate modified the previously adjudicated 2009 - 2011 ESP order, which granted a WACC rate. In June 2015, the Supreme Court of Ohio issued a decision that reversed the PUCO order on the carrying cost rate issue. In October 2015 this matter was remanded back to the PUCO for reinstatement of the WACC rate. A decision from the PUCO is pending. June 2012 – May 2015 ESP Including Capacity Charge In August 2012, the PUCO issued an order which adopted and modified a new ESP that established base generation rates through May 2015. In 2013, this ruling was generally upheld in rehearing orders. In July 2012, the PUCO issued an order in a separate capacity proceeding which stated that OPCo must charge CRES providers the RPM price and authorized OPCo to defer a portion of its incurred capacity costs not recovered from CRES providers up to $188.88 /MW day. The OPCo RPM price collected from CRES providers, which included reserve margins, was approximately $34 /MW day through May 2014 and $150 /MW day from June 2014 through May 2015. In December 2012, various parties filed notices of appeal of the capacity costs decision with the Supreme Court of Ohio. Oral arguments at the Supreme Court of Ohio were held in December 2015. As part of the August 2012 ESP order, the PUCO established a non-bypassable RSR, effective September 2012. The RSR was collected from customers at $3.50 /MWh through May 2014 and at $4.00 /MWh for the period June 2014 through May 2015, with $1.00 /MWh applied to the recovery of deferred capacity costs. In April 2015, the PUCO issued an order that approved, with modifications, OPCo’s July 2014 application to collect the unrecovered portion of the deferred capacity costs. The order included approval to continue the collection of deferred capacity costs at a rate of $4.00 /MWh beginning June 1, 2015 for approximately 32 months, with carrying costs at a long-term cost of debt rate. Additionally, the order stated that an audit will be conducted of the May 31, 2015 capacity deferral balance, which was $444 million . In May 2015, the PUCO granted intervenors requests for rehearing. As of March 31, 2016 , OPCo’s net deferred capacity costs balance of $320 million , including debt carrying costs, was recorded in Regulatory Assets on the balance sheet. Through March 31, 2016 , OPCo has collected $266 million in deferred capacity costs, and related carrying charges. In 2013, the PUCO issued its Orders on Rehearing for the ESP which generally upheld its August 2012 order. The PUCO clarified that a final reconciliation of revenues and expenses would be permitted for any over- or under-recovery on several riders including fuel. In addition, the PUCO addressed certain issues around the energy auctions while other SSO issues related to the energy auctions were deferred to a separate docket related to the competitive bid process (CBP). In 2013, OPCo and various intervenors filed appeals with the Supreme Court of Ohio challenging portions of the PUCO’s ESP order. Oral arguments at the Supreme Court of Ohio were held in May 2015. In November 2013, the PUCO issued an order approving OPCo’s CBP with modifications. The PUCO also approved the unbundling of the FAC into fixed and energy-related components and an intervenor proposal to blend the $188.88/MW day capacity price in proportion to the percentage of energy planned to be auctioned. Additionally, the PUCO ordered that intervenor concerns related to the recovery of the fixed fuel costs through potentially both the FAC and the approved capacity charges be addressed in subsequent FAC proceedings. In January 2014, the PUCO denied all rehearing requests and agreed to issue a supplemental request for an independent auditor in the 2012 - 2013 FAC proceeding to separately examine the recovery of the fixed fuel costs, including OVEC. In March 2014, the PUCO approved OPCo’s request to implement riders related to the unbundling of the FAC. In October 2014, the independent auditor, selected by the PUCO, filed its report with the PUCO for the period August 2012 through May 2015. If the PUCO ultimately concludes that a portion of the fixed fuel costs are also recovered through OPCo’s $188.88/MW day capacity charge, the independent auditor has recommended a methodology for calculating a refund of a portion of certain fixed fuel costs. The retail share of these fixed fuel costs is approximately $90 million annually. A hearing related to this matter has not been scheduled. Management believes that no over-recovery of costs has occurred and disagrees with the findings in the audit report. In April 2016, the Supreme Court of Ohio issued two opinions related to the deferral of OPCo’s capacity charges. The Supreme Court of Ohio ruled that the PUCO must reconsider an energy credit that was used to determine OPCo’s authorized capacity deferral threshold of $188.88/MW day during the August 2012 through May 2015 period. The PUCO reduced OPCo’s authorized capacity deferral threshold to $188.88/MW day largely due to an offset for an energy credit of $147.41 /MW day. The Supreme Court of Ohio directed the PUCO to substantively address OPCo’s arguments that the $147.41/MW day credit was overstated by approximately $100.00 /MW day due to various inaccuracies affecting input data and assumptions. The Supreme Court of Ohio also rejected a portion of OPCo’s RSR revenues collected during the period September 2012 through May 2015 and directed the PUCO to apply these RSR revenues against OPCo’s deferred capacity costs. The Supreme Court of Ohio was not able to determine the amount of the reduction to OPCo’s deferred capacity costs and remanded the issue to the PUCO to determine the appropriate reduction. Due to the interrelated nature of these two Supreme Court of Ohio opinions that directly relate to OPCo’s deferred capacity costs, management believes that the PUCO will rule upon both issues together. Further, management believes that the net impact of these issues will largely offset and will not result in a material future reduction of OPCo’s net income. Additionally, the Supreme Court of Ohio agreed with OPCo’s cross-appeal assertion that the 12% threshold was not based on a comparison of OPCo’s return on equity to the returns during the same period of comparable publicly traded companies, including utilities, that face comparable business and financial risk. The Supreme Court of Ohio reversed the 12% threshold and remanded this issue to the PUCO. See “Significantly Excessive Earnings Test Filings” section below. If OPCo is ultimately not permitted to fully collect all components of its ESP rates, it could reduce future net income and cash flows and impact financial condition. June 2015 - May 2018 ESP Including PPA Application In December 2013, OPCo filed an application with the PUCO to approve an ESP that included proposed rate adjustments and the continuation and modification of certain existing riders, including the Distribution Investment Rider (DIR), effective June 2015 through May 2018. The proposal also included a PPA rider that would allow retail customers to receive a rate stabilizing charge or credit by hedging market-based prices with a cost-based PPA. The PPA would initially be based upon the OVEC contractual entitlement and could, upon further approval, be expanded to include other contracts involving other Ohio legacy generation assets. In February 2015, the PUCO issued an order approving OPCo’s ESP application, subject to certain modifications, with a return on common equity of 10.2% on capital costs for certain riders. The order included (a) approval of the DIR, with modified rate caps established by the PUCO, (b) authorization to establish a zero rate rider for OPCo’s proposed PPA, (c) the option for OPCo to reapply in a future proceeding with a more detailed PPA proposal and (d) a directive to continue to pursue the transfer of the OVEC contractual entitlement to AGR or to otherwise divest of its interest in OVEC. In May 2015, the PUCO issued an order on rehearing that increased the DIR rate caps and deferred ruling on all requests for rehearing related to the establishment of the PPA rider. In July 2015, the PUCO granted OPCo’s and various intervenors’ requests for rehearing related to the May 2015 order. In May 2015, OPCo filed an amended PPA application that (a) included OPCo’s OVEC contractual entitlement, (b) addressed the PPA requirements set forth in the PUCO’s February 2015 order, (c) updated supporting testimony to reflect a current analysis of the PPA proposal and (d) included the 2,671 MW to be available for capacity, energy and ancillary services, produced by AGR over the lives of the respective generating units. In December 2015, a contested stipulation agreement related to the PPA rider application was filed with the PUCO. The stipulation agreement provided for a 10.38% return on common equity, for AGR, with the PPA rider term extending through May 2024. The stipulation agreement included (a) an affiliate PPA between OPCo and AGR to be included in the PPA rider, (b) OPCo’s OVEC contractual entitlement to be included in the PPA rider, (c) potential additional contingent customer credits of up to $100 million to be included in the PPA rider over the final four years of the PPA rider, (d) annual compliance reviews before the PUCO, (e) an agreement to retire, refuel or repower to 100% natural gas, Conesville Plant, Units 5 and 6 and Cardinal Plant, Unit 1 by 2029 and 2030, respectively, and (f) a commitment by OPCo to submit an amended ESP filing by April 30, 2016 which would extend all ESP riders through May 2024. Additionally, subject to cost recovery and PUCO approval, OPCo agreed to develop and implement, by 2021, a solar energy project(s) of at least 400 MW and a wind energy project(s) of at least 500 MW, with 100% of all output to be received by OPCo. AEP affiliates could own up to 50% of these solar and wind projects. OPCo agreed to file a carbon reduction plan with the PUCO by December 2016 that will focus on fuel diversification and carbon emission reductions. In March 2016, the PUCO modified and approved the stipulation agreement. The PPA is effective April 2016 through May 2024, with quarterly PPA rider reconciliations to actual PPA costs compared to PJM market revenues, subject to audit and review by the PUCO. PUCO modifications to the stipulation agreement included (a) a temporary customer-specific rate impact cap of 5% through May 2018, (b) a directive that OPCo will not seek recovery from customers for any costs associated with the retirement, refueling, co-firing or repowering of PPA units, (c) the limitation that OPCo will not flow through any capacity performance penalties or bonuses through the PPA rider, (d) the right for the PUCO to exclude costs associated with a forced outage lasting longer than 90 days, (e) the limitation that OPCo will not flow through any net costs or revenues associated with AGR’s obligations or entitlements related to Cardinal Plant, Units 2 and 3 and (f) the right for the PUCO to re-evaluate or modify the PPA rider if there is a change to PJM’s tariffs or rules that prohibits the PPA units from being bid into PJM auctions. The PUCO order did not modify OPCo’s agreement to provide potential additional customer credits of up to $100 million during the final four years of the PPA rider, which are shown in the following table: PJM Planning Year Potential Credit June 2020 through May 2021 $10 million June 2021 through May 2022 $20 million June 2022 through May 2023 $30 million June 2023 through May 2024 $40 million In accordance with accounting guidance for “Contingencies,” management will perform ongoing reviews of projected PPA plant costs compared to related market prices for energy and capacity to determine if additional credits to customers are probable. Management is unable to determine a range of potential losses that are reasonably possible of occurring. Potential PPA credits could reduce future net income and cash flows and impact financial condition. In January 2016, a complaint was filed at the FERC against AGR and OPCo related to the PPA. The complaint asserts that the affiliate PPA between AGR and OPCo is reviewable by the FERC under its standards for affiliate transactions. In March 2016, a group of merchant generation owners filed a complaint at the FERC against PJM seeking revisions to the Minimum Offer Price Rule (MOPR) in PJM’s tariff. The complaint against PJM requested the FERC act in advance of the May 2016 Base Residual Auction for the 2019/2020 delivery year to expand the MOPR to certain existing generating units that receive revenues from sources other than the PJM market and are entered into on or after January 1, 2016. If approved as proposed, the revised MOPR would apply to the PPA units and could affect bidding into PJM. In April 2016, the FERC issued an order granting the January 2016 complaint filed against AGR and OPCo. The FERC order rescinded the waivers of the FERC’s affiliate rules as to the affiliate PPA between AGR and OPCo. As a result, AGR and OPCo are required to submit the affiliate PPA to the FERC for review in accordance with FERC’s rules governing affiliate transactions. The affiliate PPA is not effective until the FERC review is completed and the affiliate PPA is approved. Management is evaluating its alternatives in response to this order. If OPCo is ultimately not permitted to fully collect all components of its ESP rates, it could reduce future net income and cash flows and impact financial condition. Significantly Excessive Earnings Test Filings In 2011, the PUCO issued an order on the 2009 SEET filing. The order gave consideration for a future commitment to invest $20 million to support the development of a large solar farm. In 2013, the PUCO found there was not a need for the large solar farm. The PUCO noted that OPCo remains obligated to spend $20 million on this solar project or another project. In September 2013, a proposed second phase of OPCo’s gridSMART ® ( gridSMART ® Phase II) program was filed with the PUCO which included a proposed project to satisfy the PUCO 2009 SEET directive. In April 2016, a stipulation agreement related to the gridSMART ® Phase II program was filed with the PUCO. As part of the stipulation agreement, OPCo will invest at least $20 million over a six-year period for the installation of Volt VAR Optimization (VVO) technology on selected circuits throughout OPCo’s service territory. All parties to the stipulation agree that OPCo’s proposed VVO investment resolves OPCo’s outstanding obligation for renewable or similar investment associated with the PUCO’s 2009 SEET directive. A decision from the PUCO is pending. In June 2015, OPCo submitted its 2014 SEET filing with the PUCO. Management believes its financial statements adequately address the impact of 2014 SEET requirements. 2009 Fuel Adjustment Clause Audit In January 2012, the PUCO issued an order in OPCo’s 2009 FAC that the remaining $65 million in proceeds from a 2008 coal contract settlement agreement be applied against OPCo’s under-recovered fuel balance. In April 2012, on rehearing, the PUCO ordered that the settlement credit only needed to reflect the Ohio retail jurisdictional share of the gain not already flowed through the FAC with carrying charges. As a result, OPCo recorded a $30 million net favorable adjustment on the statement of income in 2012. The January 2012 PUCO order also stated that a consultant should be hired to review the coal reserve valuation and recommend whether any additional value should benefit ratepayers. In September 2014, the Supreme Court of Ohio upheld the PUCO order on appeal. A review of the coal reserve valuation by an outside consultant has not been initiated by the PUCO. If the PUCO ultimately determines that additional amounts should benefit ratepayers as a result of the consultant’s review of the coal reserve valuation, it could reduce future net income and cash flows and impact financial condition. 2012 and 2013 Fuel Adjustment Clause Audits In May 2014, the PUCO-selected outside consultant provided its final report related to its 2012 and 2013 FAC audit which included certain unfavorable recommendations related to the FAC recovery for 2012 and 2013. These recommendations are opposed by OPCo. In addition, the PUCO will consider the results of the final audit of the recovery of fixed fuel costs that was issued in October 2014. See the “June 2012 - May 2015 ESP Including Capacity Charge” section above. If the PUCO orders a reduction to the FAC deferral or a refund to customers, it could reduce future net income and cash flows and impact financial condition. Ormet Ormet, a large aluminum company, had a contract to purchase power from OPCo. In OPCo’s 2009 - 2011 ESP proceeding, intervenors requested that OPCo be required to refund the Ormet-related revenues under a previous interim arrangement (effective from January 2009 through September 2009) and requested that the PUCO prevent OPCo from collecting Ormet-related revenues in the future. Through September 2009, the last month of the interim arrangement, OPCo had $64 million of deferred FAC costs related to the interim arrangement, excluding $2 million of unrecognized equity carrying costs. The PUCO did not take any action on this request. The intervenors raised this issue again in response to OPCo’s filing to approve recovery of the deferral under the interim agreement. To the extent amounts discussed above are refunded to customers, it could reduce future net income and cash flows and impact financial condition. PSO Rate Matters (Applies to AEP and PSO) 2015 Oklahoma Base Rate Case In July 2015, PSO filed a request with the OCC to increase annual revenues by $137 million to recover costs associated with its environmental compliance plan for the Federal EPA’s Regional Haze Rule and Mercury and Air Toxics Standards, and to recover investments and other costs that have increased since the last base rate case. The annual increase consists of (a) a base rate increase of $89 million , which includes $48 million in increased depreciation expense that reflects, among other things, recovery through June 2026 of Northeastern Plant, Units 3 and 4, (b) a rider or base rate increase of $44 million to recover costs for the environmental controls being installed on Northeastern Plant, Unit 3 and the Comanche Plant and (c) a request to include environmental consumable costs in the FAC, estimated to be $4 million annually. The rate increase includes a proposed return on common equity of 10.5% effective in January 2016. The proposed $44 million increase related to environmental investments was effective in March 2016, after the Northeastern Plant, Unit 3 environmental controls were placed in service. The total estimated cost of the environmental controls to be installed at Northeastern Plant, Unit 3 and the Comanche Plant is $219 million , excluding AFUDC. As of March 31, 2016 , PSO had incurred costs of $208 million related to these projects, including AFUDC. In addition, the filing also notified the OCC that the incremental replacement capacity and energy costs, including the first year effects of new PPAs, estimated to be $35 million , will be incurred related to the environmental compliance plan due to the closure of Northeastern Plant, Unit 4, which would be recovered through the FAC. As of March 31, 2016 , the net book value of Northeastern Plant, Unit 4 was $94 million , before cost of removal, including materials and supplies inventory and CWIP. Northeastern Plant, Unit 4 was considered probable of abandonment and was retired in April 2016. In October 2015, testimony was filed by OCC staff and intervenors with recommendations that included increases to base rates and/or the proposed environmental rider ranging from $10 million to $31 million , based upon returns on common equity ranging from 8.75% to 9.3% , and increases to depreciation expense ranging from $23 million to $46 million . Additionally, recommendations by certain intervenors included (a) no recovery of PSO’s investment in Northeastern Plant, Unit 3 environmental controls, (b) no recovery of the plant balances at the time the units are retired in 2016 and 2026, (c) denial of returns on the book values after the retirement dates, or to be set at only the cost of debt, and (d) the disallowance of the capacity costs associated with the PPAs. Additionally, some intervenors recommended no change in depreciation rates for Northeastern Plant, Units 3 and 4. These units are currently being depreciated through 2040. Hearings at the OCC were held in December 2015. In January 2016, PSO implemented an interim annual base rate increase of $75 million . These interim rates are subject to refund pending a final order from the OCC related to the initial $137 million request. An order from the OCC is anticipated by the end of the third quarter of 2016. If any of these costs are not recoverable, it could reduce future net income and cash flows and impact financial condition. SWEPCo Rate Matters (Applies to AEP and SWEPCo) 2012 Texas Base Rate Case In 2012, SWEPCo filed a request with the PUCT to increase annual base rates primarily due to the completion of the Turk Plant. In 2013, the PUCT issued an order affirming the prudence of the Turk Plant but determined that the Turk Plant’s Texas jurisdictional capital cost cap established in a previous Certificate of Convenience and Necessity case also limited SWEPCo’s recovery of AFUDC in addition to limits on its recovery of cash construction costs. Additionally, the PUCT deferred consideration of the requested increase in depreciation expense related to the change in the 2016 retirement date of the Welsh Plant, Unit 2. Upon rehearing in 2014, the PUCT reversed its initial ruling and determined that AFUDC was excluded from the Turk Plant’s Texas jurisdictional capital cost cap. As a result, in the fourth quarter of 2013, SWEPCo reversed $114 million of previously recorded regulatory disallowances. The resulting annual base rate increase was approximately $52 million . In May 2014, intervenors filed appeals of that order with the Texas District Court. In June 2014, SWEPCo intervened in those appeals. If certain parts of the PUCT order are overturned or if SWEPCo cannot ultimately recover its Texas jurisdictional share of the Turk Plant investment, including AFUDC, it could reduce future net income and cash flows and impact financial condition. 2012 Louisiana Formula Rate Filing In 2012, SWEPCo initiated a proceeding to establish new formula base rates in Louisiana, including recovery of the Louisiana jurisdictional share (approximately 29% ) of the Turk Plant. In February 2013, a settlement was filed and approved by the LPSC. The settlement increased SWEPCo’s Louisiana total rates by approximately $2 million annually, effective March 2013, which consisted of an increase in base rates of approximately $85 million annually offset by a decrease in fuel and other rates o |
Appalachian Power Co [Member] | |
Rate Matters | RATE MATTERS The disclosures in this note apply to all Registrants unless indicated otherwise. As discussed in the 2015 Annual Report, the Registrants are involved in rate and regulatory proceedings at the FERC and their state commissions. The Rate Matters note within the 2015 Annual Report should be read in conjunction with this report to gain a complete understanding of material rate matters still pending that could impact net income, cash flows and possibly financial condition. The following discusses ratemaking developments in 2016 and updates the 2015 Annual Report. Regulatory Assets Pending Final Regulatory Approval AEP March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Earning a Return Storm Related Costs $ 24.8 $ 24.2 Plant Retirement Costs - Materials and Supplies 20.8 20.9 Regulatory Assets Currently Not Earning a Return Plant Retirement Costs - Asset Retirement Obligation Costs 59.8 59.8 Storm Related Costs 23.2 18.2 Peak Demand Reduction/Energy Efficiency 14.1 13.1 Other Regulatory Assets Pending Final Regulatory Approval 35.4 31.7 Total Regulatory Assets Pending Final Regulatory Approval $ 178.1 $ 167.9 APCo March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Earning a Return Plant Retirement Costs - Materials and Supplies $ 9.2 $ 9.3 Regulatory Assets Currently Not Earning a Return Plant Retirement Costs - Asset Retirement Obligation Costs 32.7 32.7 Peak Demand Reduction/Energy Efficiency - Virginia 13.6 12.7 Amos Plant Transfer Costs - West Virginia 2.0 2.0 Other Regulatory Assets Pending Final Regulatory Approval 0.6 0.6 Total Regulatory Assets Pending Final Regulatory Approval $ 58.1 $ 57.3 I&M March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Earning a Return Plant Retirement Costs - Materials and Supplies $ 11.6 $ 11.6 Regulatory Assets Currently Not Earning a Return Plant Retirement Costs - Asset Retirement Obligation Costs - Indiana 27.1 27.1 Cook Plant Turbine 10.4 9.7 Deferred Cook Plant Life Cycle Management Project Costs - Michigan 5.4 4.2 Stranded Costs on Abandoned Plants 3.9 3.9 Rockport Dry Sorbent Injection System - Indiana 3.6 2.8 Other Regulatory Assets Pending Final Regulatory Approval 0.2 — Total Regulatory Assets Pending Final Regulatory Approval $ 62.2 $ 59.3 OPCo March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Not Earning a Return gridSMART ® Costs $ 1.8 $ 1.3 Total Regulatory Assets Pending Final Regulatory Approval $ 1.8 $ 1.3 PSO March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Not Earning a Return Storm Related Costs $ 17.0 $ 12.3 Other Regulatory Assets Pending Final Regulatory Approval 1.1 1.1 Total Regulatory Assets Pending Final Regulatory Approval $ 18.1 $ 13.4 SWEPCo March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Not Earning a Return Shipe Road Transmission Project - FERC $ 3.1 $ 3.1 Asset Retirement Obligation - Arkansas, Louisiana 1.9 1.7 Other Regulatory Assets Pending Final Regulatory Approval 1.4 1.1 Total Regulatory Assets Pending Final Regulatory Approval $ 6.4 $ 5.9 If these costs are ultimately determined not to be recoverable, it could reduce future net income and cash flows and impact financial condition. APCo and WPCo Rate Matters (Applies to AEP and APCo) 2016 West Virginia Expanded Net Energy Charge Filing In March 2016, APCo and WPCo filed their combined annual ENEC filing with the WVPSC which requested an increase in ENEC rates of $108 million ( $86 million related to APCo) to be effective July 2016. The increase primarily relates to recovery of the December 2015 under-recovered ENEC deferral balance and the recovery of costs associated with the continuation and expansion of certain transmission and generation construction projects. If any of these costs are not recoverable, it could reduce future net income and cash flows and impact financial condition. West Virginia Deferred Base Rate Increase In May 2015, the WVPSC issued an order on APCo and WPCo’s combined base rate case. The order included a delayed billing of $25 million ( $22 million related to APCo) of the annual base rate increase to residential customers until July 2016. The order provided for carrying charges based upon a weighted average cost of capital (WACC) rate for the $25 million annual delayed billing through June 2016, and stated recovery would be addressed concurrent with the next ENEC change in rates. In February 2016, APCo and WPCo filed a petition with the WVPSC to implement recovery of the unrecognized delayed billing totaling $29 million ( $26 million related to APCo), which includes carrying charges through June 2016. Recovery of the delayed billing was requested over two years, beginning July 2016, with the unpaid principal subject to carrying charges. An order from the WVPSC is pending. 2015 Virginia Regulatory Asset Proceeding In 2015, the Virginia SCC initiated a proceeding to address the proper treatment of APCo’s authorized regulatory assets. Briefs related to this proceeding were filed by various parties. The Virginia SCC has no statutory deadline to issue its decision in this proceeding. As of March 31, 2016 , APCo’s authorized regulatory assets under review in this proceeding were $8 million . If any of these costs, or any additional costs that may be subject to review, are not recoverable, it could reduce future net income and cash flows and impact financial condition. Virginia Legislation Affecting Biennial Reviews In February 2015, amendments to Virginia law governing the regulation of investor-owned electric utilities were enacted. Under the amended Virginia law, APCo’s existing generation and distribution base rates are frozen until after the Virginia SCC rules on APCo’s next biennial review, which APCo will file in March 2020 for the 2018 and 2019 test years. These amendments also preclude the Virginia SCC from performing biennial reviews of APCo’s earnings for the years 2014 through 2017. APCo’s financial statements adequately address the impact of these amendments. The amendments provide that APCo will absorb its Virginia jurisdictional share of incremental generation and distribution costs incurred during 2014 through 2017 that are associated with severe weather events and/or natural disasters and costs associated with potential asset impairments related to new carbon emission guidelines issued by the Federal EPA. In February 2016, certain APCo industrial customers filed a petition with the Virginia SCC requesting the issuance of a declaratory order that finds the amendments to Virginia law suspending biennial reviews unconstitutional and, accordingly, directs APCo to make biennial review filings beginning in 2016. In February 2016, APCo filed a motion to stay the Virginia SCC’s consideration of the petition due to a pending appeal at the Supreme Court of Virginia by industrial customers of a non-related utility regarding the constitutionality of the amendments. APCo and other parties have filed their responses to the petition. Oral arguments at the Virginia SCC were held in March 2016. Management is unable to predict the outcome of these challenges. If the biennial review process is reinstated in advance of March 2020, it could reduce future net income and cash flows and impact financial condition. ETT Rate Matters (Applies to AEP) ETT Interim Transmission Rates Parent has a 50% equity ownership interest in ETT. Predominantly all of ETT’s revenues are based on interim rate changes that can be filed twice annually and are subject to review and possible true-up in the next filed base rate proceeding. As of March 31, 2016 , AEP’s share of ETT’s cumulative revenues, subject to review, is estimated to be $468 million based upon interim rate increases received from 2009 through 2015. In November 2015, the PUCT ordered ETT to file a base rate case by February 2017. A base rate review could produce a refund if ETT incurs a disallowance of the transmission investment on which an interim increase was based. Management is unable to determine a range of potential losses that are reasonably possible of occurring. A refund of interim transmission rates could reduce future net income and cash flows and impact financial condition. KGPCo Rate Matters (Applies to AEP) Kingsport Base Rate Case In January 2016, KGPCo filed a request with the TRA to increase base rates by $12 million annually based upon a proposed return on common equity of 10.66% . A hearing at the TRA is scheduled for August 2016. If KGPCo does not recover its costs, it could reduce future net income and cash flows and impact financial condition. OPCo Rate Matters (Applies to AEP and OPCo) Ohio Electric Security Plan Filings 2009 – 2011 ESP The PUCO issued an order in March 2009 that modified and approved the ESP which established rates at the start of the April 2009 billing cycle through 2011. The order also provided a phase-in FAC, which was authorized to be recovered through a non-bypassable surcharge over the period 2012 through 2018. In 2012, the PUCO issued an order in a separate proceeding which implemented a PIRR to recover deferred fuel costs in rates beginning September 2012. The PUCO ruled that carrying charges should be calculated without an offset for accumulated deferred income taxes and that a long-term debt rate should be applied when collections begin. In November 2012, OPCo appealed that PUCO order to the Supreme Court of Ohio claiming a long-term debt rate modified the previously adjudicated 2009 - 2011 ESP order, which granted a WACC rate. In June 2015, the Supreme Court of Ohio issued a decision that reversed the PUCO order on the carrying cost rate issue. In October 2015 this matter was remanded back to the PUCO for reinstatement of the WACC rate. A decision from the PUCO is pending. June 2012 – May 2015 ESP Including Capacity Charge In August 2012, the PUCO issued an order which adopted and modified a new ESP that established base generation rates through May 2015. In 2013, this ruling was generally upheld in rehearing orders. In July 2012, the PUCO issued an order in a separate capacity proceeding which stated that OPCo must charge CRES providers the RPM price and authorized OPCo to defer a portion of its incurred capacity costs not recovered from CRES providers up to $188.88 /MW day. The OPCo RPM price collected from CRES providers, which included reserve margins, was approximately $34 /MW day through May 2014 and $150 /MW day from June 2014 through May 2015. In December 2012, various parties filed notices of appeal of the capacity costs decision with the Supreme Court of Ohio. Oral arguments at the Supreme Court of Ohio were held in December 2015. As part of the August 2012 ESP order, the PUCO established a non-bypassable RSR, effective September 2012. The RSR was collected from customers at $3.50 /MWh through May 2014 and at $4.00 /MWh for the period June 2014 through May 2015, with $1.00 /MWh applied to the recovery of deferred capacity costs. In April 2015, the PUCO issued an order that approved, with modifications, OPCo’s July 2014 application to collect the unrecovered portion of the deferred capacity costs. The order included approval to continue the collection of deferred capacity costs at a rate of $4.00 /MWh beginning June 1, 2015 for approximately 32 months, with carrying costs at a long-term cost of debt rate. Additionally, the order stated that an audit will be conducted of the May 31, 2015 capacity deferral balance, which was $444 million . In May 2015, the PUCO granted intervenors requests for rehearing. As of March 31, 2016 , OPCo’s net deferred capacity costs balance of $320 million , including debt carrying costs, was recorded in Regulatory Assets on the balance sheet. Through March 31, 2016 , OPCo has collected $266 million in deferred capacity costs, and related carrying charges. In 2013, the PUCO issued its Orders on Rehearing for the ESP which generally upheld its August 2012 order. The PUCO clarified that a final reconciliation of revenues and expenses would be permitted for any over- or under-recovery on several riders including fuel. In addition, the PUCO addressed certain issues around the energy auctions while other SSO issues related to the energy auctions were deferred to a separate docket related to the competitive bid process (CBP). In 2013, OPCo and various intervenors filed appeals with the Supreme Court of Ohio challenging portions of the PUCO’s ESP order. Oral arguments at the Supreme Court of Ohio were held in May 2015. In November 2013, the PUCO issued an order approving OPCo’s CBP with modifications. The PUCO also approved the unbundling of the FAC into fixed and energy-related components and an intervenor proposal to blend the $188.88/MW day capacity price in proportion to the percentage of energy planned to be auctioned. Additionally, the PUCO ordered that intervenor concerns related to the recovery of the fixed fuel costs through potentially both the FAC and the approved capacity charges be addressed in subsequent FAC proceedings. In January 2014, the PUCO denied all rehearing requests and agreed to issue a supplemental request for an independent auditor in the 2012 - 2013 FAC proceeding to separately examine the recovery of the fixed fuel costs, including OVEC. In March 2014, the PUCO approved OPCo’s request to implement riders related to the unbundling of the FAC. In October 2014, the independent auditor, selected by the PUCO, filed its report with the PUCO for the period August 2012 through May 2015. If the PUCO ultimately concludes that a portion of the fixed fuel costs are also recovered through OPCo’s $188.88/MW day capacity charge, the independent auditor has recommended a methodology for calculating a refund of a portion of certain fixed fuel costs. The retail share of these fixed fuel costs is approximately $90 million annually. A hearing related to this matter has not been scheduled. Management believes that no over-recovery of costs has occurred and disagrees with the findings in the audit report. In April 2016, the Supreme Court of Ohio issued two opinions related to the deferral of OPCo’s capacity charges. The Supreme Court of Ohio ruled that the PUCO must reconsider an energy credit that was used to determine OPCo’s authorized capacity deferral threshold of $188.88/MW day during the August 2012 through May 2015 period. The PUCO reduced OPCo’s authorized capacity deferral threshold to $188.88/MW day largely due to an offset for an energy credit of $147.41 /MW day. The Supreme Court of Ohio directed the PUCO to substantively address OPCo’s arguments that the $147.41/MW day credit was overstated by approximately $100.00 /MW day due to various inaccuracies affecting input data and assumptions. The Supreme Court of Ohio also rejected a portion of OPCo’s RSR revenues collected during the period September 2012 through May 2015 and directed the PUCO to apply these RSR revenues against OPCo’s deferred capacity costs. The Supreme Court of Ohio was not able to determine the amount of the reduction to OPCo’s deferred capacity costs and remanded the issue to the PUCO to determine the appropriate reduction. Due to the interrelated nature of these two Supreme Court of Ohio opinions that directly relate to OPCo’s deferred capacity costs, management believes that the PUCO will rule upon both issues together. Further, management believes that the net impact of these issues will largely offset and will not result in a material future reduction of OPCo’s net income. Additionally, the Supreme Court of Ohio agreed with OPCo’s cross-appeal assertion that the 12% threshold was not based on a comparison of OPCo’s return on equity to the returns during the same period of comparable publicly traded companies, including utilities, that face comparable business and financial risk. The Supreme Court of Ohio reversed the 12% threshold and remanded this issue to the PUCO. See “Significantly Excessive Earnings Test Filings” section below. If OPCo is ultimately not permitted to fully collect all components of its ESP rates, it could reduce future net income and cash flows and impact financial condition. June 2015 - May 2018 ESP Including PPA Application In December 2013, OPCo filed an application with the PUCO to approve an ESP that included proposed rate adjustments and the continuation and modification of certain existing riders, including the Distribution Investment Rider (DIR), effective June 2015 through May 2018. The proposal also included a PPA rider that would allow retail customers to receive a rate stabilizing charge or credit by hedging market-based prices with a cost-based PPA. The PPA would initially be based upon the OVEC contractual entitlement and could, upon further approval, be expanded to include other contracts involving other Ohio legacy generation assets. In February 2015, the PUCO issued an order approving OPCo’s ESP application, subject to certain modifications, with a return on common equity of 10.2% on capital costs for certain riders. The order included (a) approval of the DIR, with modified rate caps established by the PUCO, (b) authorization to establish a zero rate rider for OPCo’s proposed PPA, (c) the option for OPCo to reapply in a future proceeding with a more detailed PPA proposal and (d) a directive to continue to pursue the transfer of the OVEC contractual entitlement to AGR or to otherwise divest of its interest in OVEC. In May 2015, the PUCO issued an order on rehearing that increased the DIR rate caps and deferred ruling on all requests for rehearing related to the establishment of the PPA rider. In July 2015, the PUCO granted OPCo’s and various intervenors’ requests for rehearing related to the May 2015 order. In May 2015, OPCo filed an amended PPA application that (a) included OPCo’s OVEC contractual entitlement, (b) addressed the PPA requirements set forth in the PUCO’s February 2015 order, (c) updated supporting testimony to reflect a current analysis of the PPA proposal and (d) included the 2,671 MW to be available for capacity, energy and ancillary services, produced by AGR over the lives of the respective generating units. In December 2015, a contested stipulation agreement related to the PPA rider application was filed with the PUCO. The stipulation agreement provided for a 10.38% return on common equity, for AGR, with the PPA rider term extending through May 2024. The stipulation agreement included (a) an affiliate PPA between OPCo and AGR to be included in the PPA rider, (b) OPCo’s OVEC contractual entitlement to be included in the PPA rider, (c) potential additional contingent customer credits of up to $100 million to be included in the PPA rider over the final four years of the PPA rider, (d) annual compliance reviews before the PUCO, (e) an agreement to retire, refuel or repower to 100% natural gas, Conesville Plant, Units 5 and 6 and Cardinal Plant, Unit 1 by 2029 and 2030, respectively, and (f) a commitment by OPCo to submit an amended ESP filing by April 30, 2016 which would extend all ESP riders through May 2024. Additionally, subject to cost recovery and PUCO approval, OPCo agreed to develop and implement, by 2021, a solar energy project(s) of at least 400 MW and a wind energy project(s) of at least 500 MW, with 100% of all output to be received by OPCo. AEP affiliates could own up to 50% of these solar and wind projects. OPCo agreed to file a carbon reduction plan with the PUCO by December 2016 that will focus on fuel diversification and carbon emission reductions. In March 2016, the PUCO modified and approved the stipulation agreement. The PPA is effective April 2016 through May 2024, with quarterly PPA rider reconciliations to actual PPA costs compared to PJM market revenues, subject to audit and review by the PUCO. PUCO modifications to the stipulation agreement included (a) a temporary customer-specific rate impact cap of 5% through May 2018, (b) a directive that OPCo will not seek recovery from customers for any costs associated with the retirement, refueling, co-firing or repowering of PPA units, (c) the limitation that OPCo will not flow through any capacity performance penalties or bonuses through the PPA rider, (d) the right for the PUCO to exclude costs associated with a forced outage lasting longer than 90 days, (e) the limitation that OPCo will not flow through any net costs or revenues associated with AGR’s obligations or entitlements related to Cardinal Plant, Units 2 and 3 and (f) the right for the PUCO to re-evaluate or modify the PPA rider if there is a change to PJM’s tariffs or rules that prohibits the PPA units from being bid into PJM auctions. The PUCO order did not modify OPCo’s agreement to provide potential additional customer credits of up to $100 million during the final four years of the PPA rider, which are shown in the following table: PJM Planning Year Potential Credit June 2020 through May 2021 $10 million June 2021 through May 2022 $20 million June 2022 through May 2023 $30 million June 2023 through May 2024 $40 million In accordance with accounting guidance for “Contingencies,” management will perform ongoing reviews of projected PPA plant costs compared to related market prices for energy and capacity to determine if additional credits to customers are probable. Management is unable to determine a range of potential losses that are reasonably possible of occurring. Potential PPA credits could reduce future net income and cash flows and impact financial condition. In January 2016, a complaint was filed at the FERC against AGR and OPCo related to the PPA. The complaint asserts that the affiliate PPA between AGR and OPCo is reviewable by the FERC under its standards for affiliate transactions. In March 2016, a group of merchant generation owners filed a complaint at the FERC against PJM seeking revisions to the Minimum Offer Price Rule (MOPR) in PJM’s tariff. The complaint against PJM requested the FERC act in advance of the May 2016 Base Residual Auction for the 2019/2020 delivery year to expand the MOPR to certain existing generating units that receive revenues from sources other than the PJM market and are entered into on or after January 1, 2016. If approved as proposed, the revised MOPR would apply to the PPA units and could affect bidding into PJM. In April 2016, the FERC issued an order granting the January 2016 complaint filed against AGR and OPCo. The FERC order rescinded the waivers of the FERC’s affiliate rules as to the affiliate PPA between AGR and OPCo. As a result, AGR and OPCo are required to submit the affiliate PPA to the FERC for review in accordance with FERC’s rules governing affiliate transactions. The affiliate PPA is not effective until the FERC review is completed and the affiliate PPA is approved. Management is evaluating its alternatives in response to this order. If OPCo is ultimately not permitted to fully collect all components of its ESP rates, it could reduce future net income and cash flows and impact financial condition. Significantly Excessive Earnings Test Filings In 2011, the PUCO issued an order on the 2009 SEET filing. The order gave consideration for a future commitment to invest $20 million to support the development of a large solar farm. In 2013, the PUCO found there was not a need for the large solar farm. The PUCO noted that OPCo remains obligated to spend $20 million on this solar project or another project. In September 2013, a proposed second phase of OPCo’s gridSMART ® ( gridSMART ® Phase II) program was filed with the PUCO which included a proposed project to satisfy the PUCO 2009 SEET directive. In April 2016, a stipulation agreement related to the gridSMART ® Phase II program was filed with the PUCO. As part of the stipulation agreement, OPCo will invest at least $20 million over a six-year period for the installation of Volt VAR Optimization (VVO) technology on selected circuits throughout OPCo’s service territory. All parties to the stipulation agree that OPCo’s proposed VVO investment resolves OPCo’s outstanding obligation for renewable or similar investment associated with the PUCO’s 2009 SEET directive. A decision from the PUCO is pending. In June 2015, OPCo submitted its 2014 SEET filing with the PUCO. Management believes its financial statements adequately address the impact of 2014 SEET requirements. 2009 Fuel Adjustment Clause Audit In January 2012, the PUCO issued an order in OPCo’s 2009 FAC that the remaining $65 million in proceeds from a 2008 coal contract settlement agreement be applied against OPCo’s under-recovered fuel balance. In April 2012, on rehearing, the PUCO ordered that the settlement credit only needed to reflect the Ohio retail jurisdictional share of the gain not already flowed through the FAC with carrying charges. As a result, OPCo recorded a $30 million net favorable adjustment on the statement of income in 2012. The January 2012 PUCO order also stated that a consultant should be hired to review the coal reserve valuation and recommend whether any additional value should benefit ratepayers. In September 2014, the Supreme Court of Ohio upheld the PUCO order on appeal. A review of the coal reserve valuation by an outside consultant has not been initiated by the PUCO. If the PUCO ultimately determines that additional amounts should benefit ratepayers as a result of the consultant’s review of the coal reserve valuation, it could reduce future net income and cash flows and impact financial condition. 2012 and 2013 Fuel Adjustment Clause Audits In May 2014, the PUCO-selected outside consultant provided its final report related to its 2012 and 2013 FAC audit which included certain unfavorable recommendations related to the FAC recovery for 2012 and 2013. These recommendations are opposed by OPCo. In addition, the PUCO will consider the results of the final audit of the recovery of fixed fuel costs that was issued in October 2014. See the “June 2012 - May 2015 ESP Including Capacity Charge” section above. If the PUCO orders a reduction to the FAC deferral or a refund to customers, it could reduce future net income and cash flows and impact financial condition. Ormet Ormet, a large aluminum company, had a contract to purchase power from OPCo. In OPCo’s 2009 - 2011 ESP proceeding, intervenors requested that OPCo be required to refund the Ormet-related revenues under a previous interim arrangement (effective from January 2009 through September 2009) and requested that the PUCO prevent OPCo from collecting Ormet-related revenues in the future. Through September 2009, the last month of the interim arrangement, OPCo had $64 million of deferred FAC costs related to the interim arrangement, excluding $2 million of unrecognized equity carrying costs. The PUCO did not take any action on this request. The intervenors raised this issue again in response to OPCo’s filing to approve recovery of the deferral under the interim agreement. To the extent amounts discussed above are refunded to customers, it could reduce future net income and cash flows and impact financial condition. PSO Rate Matters (Applies to AEP and PSO) 2015 Oklahoma Base Rate Case In July 2015, PSO filed a request with the OCC to increase annual revenues by $137 million to recover costs associated with its environmental compliance plan for the Federal EPA’s Regional Haze Rule and Mercury and Air Toxics Standards, and to recover investments and other costs that have increased since the last base rate case. The annual increase consists of (a) a base rate increase of $89 million , which includes $48 million in increased depreciation expense that reflects, among other things, recovery through June 2026 of Northeastern Plant, Units 3 and 4, (b) a rider or base rate increase of $44 million to recover costs for the environmental controls being installed on Northeastern Plant, Unit 3 and the Comanche Plant and (c) a request to include environmental consumable costs in the FAC, estimated to be $4 million annually. The rate increase includes a proposed return on common equity of 10.5% effective in January 2016. The proposed $44 million increase related to environmental investments was effective in March 2016, after the Northeastern Plant, Unit 3 environmental controls were placed in service. The total estimated cost of the environmental controls to be installed at Northeastern Plant, Unit 3 and the Comanche Plant is $219 million , excluding AFUDC. As of March 31, 2016 , PSO had incurred costs of $208 million related to these projects, including AFUDC. In addition, the filing also notified the OCC that the incremental replacement capacity and energy costs, including the first year effects of new PPAs, estimated to be $35 million , will be incurred related to the environmental compliance plan due to the closure of Northeastern Plant, Unit 4, which would be recovered through the FAC. As of March 31, 2016 , the net book value of Northeastern Plant, Unit 4 was $94 million , before cost of removal, including materials and supplies inventory and CWIP. Northeastern Plant, Unit 4 was considered probable of abandonment and was retired in April 2016. In October 2015, testimony was filed by OCC staff and intervenors with recommendations that included increases to base rates and/or the proposed environmental rider ranging from $10 million to $31 million , based upon returns on common equity ranging from 8.75% to 9.3% , and increases to depreciation expense ranging from $23 million to $46 million . Additionally, recommendations by certain intervenors included (a) no recovery of PSO’s investment in Northeastern Plant, Unit 3 environmental controls, (b) no recovery of the plant balances at the time the units are retired in 2016 and 2026, (c) denial of returns on the book values after the retirement dates, or to be set at only the cost of debt, and (d) the disallowance of the capacity costs associated with the PPAs. Additionally, some intervenors recommended no change in depreciation rates for Northeastern Plant, Units 3 and 4. These units are currently being depreciated through 2040. Hearings at the OCC were held in December 2015. In January 2016, PSO implemented an interim annual base rate increase of $75 million . These interim rates are subject to refund pending a final order from the OCC related to the initial $137 million request. An order from the OCC is anticipated by the end of the third quarter of 2016. If any of these costs are not recoverable, it could reduce future net income and cash flows and impact financial condition. SWEPCo Rate Matters (Applies to AEP and SWEPCo) 2012 Texas Base Rate Case In 2012, SWEPCo filed a request with the PUCT to increase annual base rates primarily due to the completion of the Turk Plant. In 2013, the PUCT issued an order affirming the prudence of the Turk Plant but determined that the Turk Plant’s Texas jurisdictional capital cost cap established in a previous Certificate of Convenience and Necessity case also limited SWEPCo’s recovery of AFUDC in addition to limits on its recovery of cash construction costs. Additionally, the PUCT deferred consideration of the requested increase in depreciation expense related to the change in the 2016 retirement date of the Welsh Plant, Unit 2. Upon rehearing in 2014, the PUCT reversed its initial ruling and determined that AFUDC was excluded from the Turk Plant’s Texas jurisdictional capital cost cap. As a result, in the fourth quarter of 2013, SWEPCo reversed $114 million of previously recorded regulatory disallowances. The resulting annual base rate increase was approximately $52 million . In May 2014, intervenors filed appeals of that order with the Texas District Court. In June 2014, SWEPCo intervened in those appeals. If certain parts of the PUCT order are overturned or if SWEPCo cannot ultimately recover its Texas jurisdictional share of the Turk Plant investment, including AFUDC, it could reduce future net income and cash flows and impact financial condition. 2012 Louisiana Formula Rate Filing In 2012, SWEPCo initiated a proceeding to establish new formula base rates in Louisiana, including recovery of the Louisiana jurisdictional share (approximately 29% ) of the Turk Plant. In February 2013, a settlement was filed and approved by the LPSC. The settlement increased SWEPCo’s Louisiana total rates by approximately $2 million annually, effective March 2013, which consisted of an increase in base rates of approximately $85 million annually offset by a decrease in fuel and other rates o |
Indiana Michigan Power Co [Member] | |
Rate Matters | RATE MATTERS The disclosures in this note apply to all Registrants unless indicated otherwise. As discussed in the 2015 Annual Report, the Registrants are involved in rate and regulatory proceedings at the FERC and their state commissions. The Rate Matters note within the 2015 Annual Report should be read in conjunction with this report to gain a complete understanding of material rate matters still pending that could impact net income, cash flows and possibly financial condition. The following discusses ratemaking developments in 2016 and updates the 2015 Annual Report. Regulatory Assets Pending Final Regulatory Approval AEP March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Earning a Return Storm Related Costs $ 24.8 $ 24.2 Plant Retirement Costs - Materials and Supplies 20.8 20.9 Regulatory Assets Currently Not Earning a Return Plant Retirement Costs - Asset Retirement Obligation Costs 59.8 59.8 Storm Related Costs 23.2 18.2 Peak Demand Reduction/Energy Efficiency 14.1 13.1 Other Regulatory Assets Pending Final Regulatory Approval 35.4 31.7 Total Regulatory Assets Pending Final Regulatory Approval $ 178.1 $ 167.9 APCo March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Earning a Return Plant Retirement Costs - Materials and Supplies $ 9.2 $ 9.3 Regulatory Assets Currently Not Earning a Return Plant Retirement Costs - Asset Retirement Obligation Costs 32.7 32.7 Peak Demand Reduction/Energy Efficiency - Virginia 13.6 12.7 Amos Plant Transfer Costs - West Virginia 2.0 2.0 Other Regulatory Assets Pending Final Regulatory Approval 0.6 0.6 Total Regulatory Assets Pending Final Regulatory Approval $ 58.1 $ 57.3 I&M March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Earning a Return Plant Retirement Costs - Materials and Supplies $ 11.6 $ 11.6 Regulatory Assets Currently Not Earning a Return Plant Retirement Costs - Asset Retirement Obligation Costs - Indiana 27.1 27.1 Cook Plant Turbine 10.4 9.7 Deferred Cook Plant Life Cycle Management Project Costs - Michigan 5.4 4.2 Stranded Costs on Abandoned Plants 3.9 3.9 Rockport Dry Sorbent Injection System - Indiana 3.6 2.8 Other Regulatory Assets Pending Final Regulatory Approval 0.2 — Total Regulatory Assets Pending Final Regulatory Approval $ 62.2 $ 59.3 OPCo March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Not Earning a Return gridSMART ® Costs $ 1.8 $ 1.3 Total Regulatory Assets Pending Final Regulatory Approval $ 1.8 $ 1.3 PSO March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Not Earning a Return Storm Related Costs $ 17.0 $ 12.3 Other Regulatory Assets Pending Final Regulatory Approval 1.1 1.1 Total Regulatory Assets Pending Final Regulatory Approval $ 18.1 $ 13.4 SWEPCo March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Not Earning a Return Shipe Road Transmission Project - FERC $ 3.1 $ 3.1 Asset Retirement Obligation - Arkansas, Louisiana 1.9 1.7 Other Regulatory Assets Pending Final Regulatory Approval 1.4 1.1 Total Regulatory Assets Pending Final Regulatory Approval $ 6.4 $ 5.9 If these costs are ultimately determined not to be recoverable, it could reduce future net income and cash flows and impact financial condition. APCo and WPCo Rate Matters (Applies to AEP and APCo) 2016 West Virginia Expanded Net Energy Charge Filing In March 2016, APCo and WPCo filed their combined annual ENEC filing with the WVPSC which requested an increase in ENEC rates of $108 million ( $86 million related to APCo) to be effective July 2016. The increase primarily relates to recovery of the December 2015 under-recovered ENEC deferral balance and the recovery of costs associated with the continuation and expansion of certain transmission and generation construction projects. If any of these costs are not recoverable, it could reduce future net income and cash flows and impact financial condition. West Virginia Deferred Base Rate Increase In May 2015, the WVPSC issued an order on APCo and WPCo’s combined base rate case. The order included a delayed billing of $25 million ( $22 million related to APCo) of the annual base rate increase to residential customers until July 2016. The order provided for carrying charges based upon a weighted average cost of capital (WACC) rate for the $25 million annual delayed billing through June 2016, and stated recovery would be addressed concurrent with the next ENEC change in rates. In February 2016, APCo and WPCo filed a petition with the WVPSC to implement recovery of the unrecognized delayed billing totaling $29 million ( $26 million related to APCo), which includes carrying charges through June 2016. Recovery of the delayed billing was requested over two years, beginning July 2016, with the unpaid principal subject to carrying charges. An order from the WVPSC is pending. 2015 Virginia Regulatory Asset Proceeding In 2015, the Virginia SCC initiated a proceeding to address the proper treatment of APCo’s authorized regulatory assets. Briefs related to this proceeding were filed by various parties. The Virginia SCC has no statutory deadline to issue its decision in this proceeding. As of March 31, 2016 , APCo’s authorized regulatory assets under review in this proceeding were $8 million . If any of these costs, or any additional costs that may be subject to review, are not recoverable, it could reduce future net income and cash flows and impact financial condition. Virginia Legislation Affecting Biennial Reviews In February 2015, amendments to Virginia law governing the regulation of investor-owned electric utilities were enacted. Under the amended Virginia law, APCo’s existing generation and distribution base rates are frozen until after the Virginia SCC rules on APCo’s next biennial review, which APCo will file in March 2020 for the 2018 and 2019 test years. These amendments also preclude the Virginia SCC from performing biennial reviews of APCo’s earnings for the years 2014 through 2017. APCo’s financial statements adequately address the impact of these amendments. The amendments provide that APCo will absorb its Virginia jurisdictional share of incremental generation and distribution costs incurred during 2014 through 2017 that are associated with severe weather events and/or natural disasters and costs associated with potential asset impairments related to new carbon emission guidelines issued by the Federal EPA. In February 2016, certain APCo industrial customers filed a petition with the Virginia SCC requesting the issuance of a declaratory order that finds the amendments to Virginia law suspending biennial reviews unconstitutional and, accordingly, directs APCo to make biennial review filings beginning in 2016. In February 2016, APCo filed a motion to stay the Virginia SCC’s consideration of the petition due to a pending appeal at the Supreme Court of Virginia by industrial customers of a non-related utility regarding the constitutionality of the amendments. APCo and other parties have filed their responses to the petition. Oral arguments at the Virginia SCC were held in March 2016. Management is unable to predict the outcome of these challenges. If the biennial review process is reinstated in advance of March 2020, it could reduce future net income and cash flows and impact financial condition. ETT Rate Matters (Applies to AEP) ETT Interim Transmission Rates Parent has a 50% equity ownership interest in ETT. Predominantly all of ETT’s revenues are based on interim rate changes that can be filed twice annually and are subject to review and possible true-up in the next filed base rate proceeding. As of March 31, 2016 , AEP’s share of ETT’s cumulative revenues, subject to review, is estimated to be $468 million based upon interim rate increases received from 2009 through 2015. In November 2015, the PUCT ordered ETT to file a base rate case by February 2017. A base rate review could produce a refund if ETT incurs a disallowance of the transmission investment on which an interim increase was based. Management is unable to determine a range of potential losses that are reasonably possible of occurring. A refund of interim transmission rates could reduce future net income and cash flows and impact financial condition. KGPCo Rate Matters (Applies to AEP) Kingsport Base Rate Case In January 2016, KGPCo filed a request with the TRA to increase base rates by $12 million annually based upon a proposed return on common equity of 10.66% . A hearing at the TRA is scheduled for August 2016. If KGPCo does not recover its costs, it could reduce future net income and cash flows and impact financial condition. OPCo Rate Matters (Applies to AEP and OPCo) Ohio Electric Security Plan Filings 2009 – 2011 ESP The PUCO issued an order in March 2009 that modified and approved the ESP which established rates at the start of the April 2009 billing cycle through 2011. The order also provided a phase-in FAC, which was authorized to be recovered through a non-bypassable surcharge over the period 2012 through 2018. In 2012, the PUCO issued an order in a separate proceeding which implemented a PIRR to recover deferred fuel costs in rates beginning September 2012. The PUCO ruled that carrying charges should be calculated without an offset for accumulated deferred income taxes and that a long-term debt rate should be applied when collections begin. In November 2012, OPCo appealed that PUCO order to the Supreme Court of Ohio claiming a long-term debt rate modified the previously adjudicated 2009 - 2011 ESP order, which granted a WACC rate. In June 2015, the Supreme Court of Ohio issued a decision that reversed the PUCO order on the carrying cost rate issue. In October 2015 this matter was remanded back to the PUCO for reinstatement of the WACC rate. A decision from the PUCO is pending. June 2012 – May 2015 ESP Including Capacity Charge In August 2012, the PUCO issued an order which adopted and modified a new ESP that established base generation rates through May 2015. In 2013, this ruling was generally upheld in rehearing orders. In July 2012, the PUCO issued an order in a separate capacity proceeding which stated that OPCo must charge CRES providers the RPM price and authorized OPCo to defer a portion of its incurred capacity costs not recovered from CRES providers up to $188.88 /MW day. The OPCo RPM price collected from CRES providers, which included reserve margins, was approximately $34 /MW day through May 2014 and $150 /MW day from June 2014 through May 2015. In December 2012, various parties filed notices of appeal of the capacity costs decision with the Supreme Court of Ohio. Oral arguments at the Supreme Court of Ohio were held in December 2015. As part of the August 2012 ESP order, the PUCO established a non-bypassable RSR, effective September 2012. The RSR was collected from customers at $3.50 /MWh through May 2014 and at $4.00 /MWh for the period June 2014 through May 2015, with $1.00 /MWh applied to the recovery of deferred capacity costs. In April 2015, the PUCO issued an order that approved, with modifications, OPCo’s July 2014 application to collect the unrecovered portion of the deferred capacity costs. The order included approval to continue the collection of deferred capacity costs at a rate of $4.00 /MWh beginning June 1, 2015 for approximately 32 months, with carrying costs at a long-term cost of debt rate. Additionally, the order stated that an audit will be conducted of the May 31, 2015 capacity deferral balance, which was $444 million . In May 2015, the PUCO granted intervenors requests for rehearing. As of March 31, 2016 , OPCo’s net deferred capacity costs balance of $320 million , including debt carrying costs, was recorded in Regulatory Assets on the balance sheet. Through March 31, 2016 , OPCo has collected $266 million in deferred capacity costs, and related carrying charges. In 2013, the PUCO issued its Orders on Rehearing for the ESP which generally upheld its August 2012 order. The PUCO clarified that a final reconciliation of revenues and expenses would be permitted for any over- or under-recovery on several riders including fuel. In addition, the PUCO addressed certain issues around the energy auctions while other SSO issues related to the energy auctions were deferred to a separate docket related to the competitive bid process (CBP). In 2013, OPCo and various intervenors filed appeals with the Supreme Court of Ohio challenging portions of the PUCO’s ESP order. Oral arguments at the Supreme Court of Ohio were held in May 2015. In November 2013, the PUCO issued an order approving OPCo’s CBP with modifications. The PUCO also approved the unbundling of the FAC into fixed and energy-related components and an intervenor proposal to blend the $188.88/MW day capacity price in proportion to the percentage of energy planned to be auctioned. Additionally, the PUCO ordered that intervenor concerns related to the recovery of the fixed fuel costs through potentially both the FAC and the approved capacity charges be addressed in subsequent FAC proceedings. In January 2014, the PUCO denied all rehearing requests and agreed to issue a supplemental request for an independent auditor in the 2012 - 2013 FAC proceeding to separately examine the recovery of the fixed fuel costs, including OVEC. In March 2014, the PUCO approved OPCo’s request to implement riders related to the unbundling of the FAC. In October 2014, the independent auditor, selected by the PUCO, filed its report with the PUCO for the period August 2012 through May 2015. If the PUCO ultimately concludes that a portion of the fixed fuel costs are also recovered through OPCo’s $188.88/MW day capacity charge, the independent auditor has recommended a methodology for calculating a refund of a portion of certain fixed fuel costs. The retail share of these fixed fuel costs is approximately $90 million annually. A hearing related to this matter has not been scheduled. Management believes that no over-recovery of costs has occurred and disagrees with the findings in the audit report. In April 2016, the Supreme Court of Ohio issued two opinions related to the deferral of OPCo’s capacity charges. The Supreme Court of Ohio ruled that the PUCO must reconsider an energy credit that was used to determine OPCo’s authorized capacity deferral threshold of $188.88/MW day during the August 2012 through May 2015 period. The PUCO reduced OPCo’s authorized capacity deferral threshold to $188.88/MW day largely due to an offset for an energy credit of $147.41 /MW day. The Supreme Court of Ohio directed the PUCO to substantively address OPCo’s arguments that the $147.41/MW day credit was overstated by approximately $100.00 /MW day due to various inaccuracies affecting input data and assumptions. The Supreme Court of Ohio also rejected a portion of OPCo’s RSR revenues collected during the period September 2012 through May 2015 and directed the PUCO to apply these RSR revenues against OPCo’s deferred capacity costs. The Supreme Court of Ohio was not able to determine the amount of the reduction to OPCo’s deferred capacity costs and remanded the issue to the PUCO to determine the appropriate reduction. Due to the interrelated nature of these two Supreme Court of Ohio opinions that directly relate to OPCo’s deferred capacity costs, management believes that the PUCO will rule upon both issues together. Further, management believes that the net impact of these issues will largely offset and will not result in a material future reduction of OPCo’s net income. Additionally, the Supreme Court of Ohio agreed with OPCo’s cross-appeal assertion that the 12% threshold was not based on a comparison of OPCo’s return on equity to the returns during the same period of comparable publicly traded companies, including utilities, that face comparable business and financial risk. The Supreme Court of Ohio reversed the 12% threshold and remanded this issue to the PUCO. See “Significantly Excessive Earnings Test Filings” section below. If OPCo is ultimately not permitted to fully collect all components of its ESP rates, it could reduce future net income and cash flows and impact financial condition. June 2015 - May 2018 ESP Including PPA Application In December 2013, OPCo filed an application with the PUCO to approve an ESP that included proposed rate adjustments and the continuation and modification of certain existing riders, including the Distribution Investment Rider (DIR), effective June 2015 through May 2018. The proposal also included a PPA rider that would allow retail customers to receive a rate stabilizing charge or credit by hedging market-based prices with a cost-based PPA. The PPA would initially be based upon the OVEC contractual entitlement and could, upon further approval, be expanded to include other contracts involving other Ohio legacy generation assets. In February 2015, the PUCO issued an order approving OPCo’s ESP application, subject to certain modifications, with a return on common equity of 10.2% on capital costs for certain riders. The order included (a) approval of the DIR, with modified rate caps established by the PUCO, (b) authorization to establish a zero rate rider for OPCo’s proposed PPA, (c) the option for OPCo to reapply in a future proceeding with a more detailed PPA proposal and (d) a directive to continue to pursue the transfer of the OVEC contractual entitlement to AGR or to otherwise divest of its interest in OVEC. In May 2015, the PUCO issued an order on rehearing that increased the DIR rate caps and deferred ruling on all requests for rehearing related to the establishment of the PPA rider. In July 2015, the PUCO granted OPCo’s and various intervenors’ requests for rehearing related to the May 2015 order. In May 2015, OPCo filed an amended PPA application that (a) included OPCo’s OVEC contractual entitlement, (b) addressed the PPA requirements set forth in the PUCO’s February 2015 order, (c) updated supporting testimony to reflect a current analysis of the PPA proposal and (d) included the 2,671 MW to be available for capacity, energy and ancillary services, produced by AGR over the lives of the respective generating units. In December 2015, a contested stipulation agreement related to the PPA rider application was filed with the PUCO. The stipulation agreement provided for a 10.38% return on common equity, for AGR, with the PPA rider term extending through May 2024. The stipulation agreement included (a) an affiliate PPA between OPCo and AGR to be included in the PPA rider, (b) OPCo’s OVEC contractual entitlement to be included in the PPA rider, (c) potential additional contingent customer credits of up to $100 million to be included in the PPA rider over the final four years of the PPA rider, (d) annual compliance reviews before the PUCO, (e) an agreement to retire, refuel or repower to 100% natural gas, Conesville Plant, Units 5 and 6 and Cardinal Plant, Unit 1 by 2029 and 2030, respectively, and (f) a commitment by OPCo to submit an amended ESP filing by April 30, 2016 which would extend all ESP riders through May 2024. Additionally, subject to cost recovery and PUCO approval, OPCo agreed to develop and implement, by 2021, a solar energy project(s) of at least 400 MW and a wind energy project(s) of at least 500 MW, with 100% of all output to be received by OPCo. AEP affiliates could own up to 50% of these solar and wind projects. OPCo agreed to file a carbon reduction plan with the PUCO by December 2016 that will focus on fuel diversification and carbon emission reductions. In March 2016, the PUCO modified and approved the stipulation agreement. The PPA is effective April 2016 through May 2024, with quarterly PPA rider reconciliations to actual PPA costs compared to PJM market revenues, subject to audit and review by the PUCO. PUCO modifications to the stipulation agreement included (a) a temporary customer-specific rate impact cap of 5% through May 2018, (b) a directive that OPCo will not seek recovery from customers for any costs associated with the retirement, refueling, co-firing or repowering of PPA units, (c) the limitation that OPCo will not flow through any capacity performance penalties or bonuses through the PPA rider, (d) the right for the PUCO to exclude costs associated with a forced outage lasting longer than 90 days, (e) the limitation that OPCo will not flow through any net costs or revenues associated with AGR’s obligations or entitlements related to Cardinal Plant, Units 2 and 3 and (f) the right for the PUCO to re-evaluate or modify the PPA rider if there is a change to PJM’s tariffs or rules that prohibits the PPA units from being bid into PJM auctions. The PUCO order did not modify OPCo’s agreement to provide potential additional customer credits of up to $100 million during the final four years of the PPA rider, which are shown in the following table: PJM Planning Year Potential Credit June 2020 through May 2021 $10 million June 2021 through May 2022 $20 million June 2022 through May 2023 $30 million June 2023 through May 2024 $40 million In accordance with accounting guidance for “Contingencies,” management will perform ongoing reviews of projected PPA plant costs compared to related market prices for energy and capacity to determine if additional credits to customers are probable. Management is unable to determine a range of potential losses that are reasonably possible of occurring. Potential PPA credits could reduce future net income and cash flows and impact financial condition. In January 2016, a complaint was filed at the FERC against AGR and OPCo related to the PPA. The complaint asserts that the affiliate PPA between AGR and OPCo is reviewable by the FERC under its standards for affiliate transactions. In March 2016, a group of merchant generation owners filed a complaint at the FERC against PJM seeking revisions to the Minimum Offer Price Rule (MOPR) in PJM’s tariff. The complaint against PJM requested the FERC act in advance of the May 2016 Base Residual Auction for the 2019/2020 delivery year to expand the MOPR to certain existing generating units that receive revenues from sources other than the PJM market and are entered into on or after January 1, 2016. If approved as proposed, the revised MOPR would apply to the PPA units and could affect bidding into PJM. In April 2016, the FERC issued an order granting the January 2016 complaint filed against AGR and OPCo. The FERC order rescinded the waivers of the FERC’s affiliate rules as to the affiliate PPA between AGR and OPCo. As a result, AGR and OPCo are required to submit the affiliate PPA to the FERC for review in accordance with FERC’s rules governing affiliate transactions. The affiliate PPA is not effective until the FERC review is completed and the affiliate PPA is approved. Management is evaluating its alternatives in response to this order. If OPCo is ultimately not permitted to fully collect all components of its ESP rates, it could reduce future net income and cash flows and impact financial condition. Significantly Excessive Earnings Test Filings In 2011, the PUCO issued an order on the 2009 SEET filing. The order gave consideration for a future commitment to invest $20 million to support the development of a large solar farm. In 2013, the PUCO found there was not a need for the large solar farm. The PUCO noted that OPCo remains obligated to spend $20 million on this solar project or another project. In September 2013, a proposed second phase of OPCo’s gridSMART ® ( gridSMART ® Phase II) program was filed with the PUCO which included a proposed project to satisfy the PUCO 2009 SEET directive. In April 2016, a stipulation agreement related to the gridSMART ® Phase II program was filed with the PUCO. As part of the stipulation agreement, OPCo will invest at least $20 million over a six-year period for the installation of Volt VAR Optimization (VVO) technology on selected circuits throughout OPCo’s service territory. All parties to the stipulation agree that OPCo’s proposed VVO investment resolves OPCo’s outstanding obligation for renewable or similar investment associated with the PUCO’s 2009 SEET directive. A decision from the PUCO is pending. In June 2015, OPCo submitted its 2014 SEET filing with the PUCO. Management believes its financial statements adequately address the impact of 2014 SEET requirements. 2009 Fuel Adjustment Clause Audit In January 2012, the PUCO issued an order in OPCo’s 2009 FAC that the remaining $65 million in proceeds from a 2008 coal contract settlement agreement be applied against OPCo’s under-recovered fuel balance. In April 2012, on rehearing, the PUCO ordered that the settlement credit only needed to reflect the Ohio retail jurisdictional share of the gain not already flowed through the FAC with carrying charges. As a result, OPCo recorded a $30 million net favorable adjustment on the statement of income in 2012. The January 2012 PUCO order also stated that a consultant should be hired to review the coal reserve valuation and recommend whether any additional value should benefit ratepayers. In September 2014, the Supreme Court of Ohio upheld the PUCO order on appeal. A review of the coal reserve valuation by an outside consultant has not been initiated by the PUCO. If the PUCO ultimately determines that additional amounts should benefit ratepayers as a result of the consultant’s review of the coal reserve valuation, it could reduce future net income and cash flows and impact financial condition. 2012 and 2013 Fuel Adjustment Clause Audits In May 2014, the PUCO-selected outside consultant provided its final report related to its 2012 and 2013 FAC audit which included certain unfavorable recommendations related to the FAC recovery for 2012 and 2013. These recommendations are opposed by OPCo. In addition, the PUCO will consider the results of the final audit of the recovery of fixed fuel costs that was issued in October 2014. See the “June 2012 - May 2015 ESP Including Capacity Charge” section above. If the PUCO orders a reduction to the FAC deferral or a refund to customers, it could reduce future net income and cash flows and impact financial condition. Ormet Ormet, a large aluminum company, had a contract to purchase power from OPCo. In OPCo’s 2009 - 2011 ESP proceeding, intervenors requested that OPCo be required to refund the Ormet-related revenues under a previous interim arrangement (effective from January 2009 through September 2009) and requested that the PUCO prevent OPCo from collecting Ormet-related revenues in the future. Through September 2009, the last month of the interim arrangement, OPCo had $64 million of deferred FAC costs related to the interim arrangement, excluding $2 million of unrecognized equity carrying costs. The PUCO did not take any action on this request. The intervenors raised this issue again in response to OPCo’s filing to approve recovery of the deferral under the interim agreement. To the extent amounts discussed above are refunded to customers, it could reduce future net income and cash flows and impact financial condition. PSO Rate Matters (Applies to AEP and PSO) 2015 Oklahoma Base Rate Case In July 2015, PSO filed a request with the OCC to increase annual revenues by $137 million to recover costs associated with its environmental compliance plan for the Federal EPA’s Regional Haze Rule and Mercury and Air Toxics Standards, and to recover investments and other costs that have increased since the last base rate case. The annual increase consists of (a) a base rate increase of $89 million , which includes $48 million in increased depreciation expense that reflects, among other things, recovery through June 2026 of Northeastern Plant, Units 3 and 4, (b) a rider or base rate increase of $44 million to recover costs for the environmental controls being installed on Northeastern Plant, Unit 3 and the Comanche Plant and (c) a request to include environmental consumable costs in the FAC, estimated to be $4 million annually. The rate increase includes a proposed return on common equity of 10.5% effective in January 2016. The proposed $44 million increase related to environmental investments was effective in March 2016, after the Northeastern Plant, Unit 3 environmental controls were placed in service. The total estimated cost of the environmental controls to be installed at Northeastern Plant, Unit 3 and the Comanche Plant is $219 million , excluding AFUDC. As of March 31, 2016 , PSO had incurred costs of $208 million related to these projects, including AFUDC. In addition, the filing also notified the OCC that the incremental replacement capacity and energy costs, including the first year effects of new PPAs, estimated to be $35 million , will be incurred related to the environmental compliance plan due to the closure of Northeastern Plant, Unit 4, which would be recovered through the FAC. As of March 31, 2016 , the net book value of Northeastern Plant, Unit 4 was $94 million , before cost of removal, including materials and supplies inventory and CWIP. Northeastern Plant, Unit 4 was considered probable of abandonment and was retired in April 2016. In October 2015, testimony was filed by OCC staff and intervenors with recommendations that included increases to base rates and/or the proposed environmental rider ranging from $10 million to $31 million , based upon returns on common equity ranging from 8.75% to 9.3% , and increases to depreciation expense ranging from $23 million to $46 million . Additionally, recommendations by certain intervenors included (a) no recovery of PSO’s investment in Northeastern Plant, Unit 3 environmental controls, (b) no recovery of the plant balances at the time the units are retired in 2016 and 2026, (c) denial of returns on the book values after the retirement dates, or to be set at only the cost of debt, and (d) the disallowance of the capacity costs associated with the PPAs. Additionally, some intervenors recommended no change in depreciation rates for Northeastern Plant, Units 3 and 4. These units are currently being depreciated through 2040. Hearings at the OCC were held in December 2015. In January 2016, PSO implemented an interim annual base rate increase of $75 million . These interim rates are subject to refund pending a final order from the OCC related to the initial $137 million request. An order from the OCC is anticipated by the end of the third quarter of 2016. If any of these costs are not recoverable, it could reduce future net income and cash flows and impact financial condition. SWEPCo Rate Matters (Applies to AEP and SWEPCo) 2012 Texas Base Rate Case In 2012, SWEPCo filed a request with the PUCT to increase annual base rates primarily due to the completion of the Turk Plant. In 2013, the PUCT issued an order affirming the prudence of the Turk Plant but determined that the Turk Plant’s Texas jurisdictional capital cost cap established in a previous Certificate of Convenience and Necessity case also limited SWEPCo’s recovery of AFUDC in addition to limits on its recovery of cash construction costs. Additionally, the PUCT deferred consideration of the requested increase in depreciation expense related to the change in the 2016 retirement date of the Welsh Plant, Unit 2. Upon rehearing in 2014, the PUCT reversed its initial ruling and determined that AFUDC was excluded from the Turk Plant’s Texas jurisdictional capital cost cap. As a result, in the fourth quarter of 2013, SWEPCo reversed $114 million of previously recorded regulatory disallowances. The resulting annual base rate increase was approximately $52 million . In May 2014, intervenors filed appeals of that order with the Texas District Court. In June 2014, SWEPCo intervened in those appeals. If certain parts of the PUCT order are overturned or if SWEPCo cannot ultimately recover its Texas jurisdictional share of the Turk Plant investment, including AFUDC, it could reduce future net income and cash flows and impact financial condition. 2012 Louisiana Formula Rate Filing In 2012, SWEPCo initiated a proceeding to establish new formula base rates in Louisiana, including recovery of the Louisiana jurisdictional share (approximately 29% ) of the Turk Plant. In February 2013, a settlement was filed and approved by the LPSC. The settlement increased SWEPCo’s Louisiana total rates by approximately $2 million annually, effective March 2013, which consisted of an increase in base rates of approximately $85 million annually offset by a decrease in fuel and other rates o |
Ohio Power Co [Member] | |
Rate Matters | RATE MATTERS The disclosures in this note apply to all Registrants unless indicated otherwise. As discussed in the 2015 Annual Report, the Registrants are involved in rate and regulatory proceedings at the FERC and their state commissions. The Rate Matters note within the 2015 Annual Report should be read in conjunction with this report to gain a complete understanding of material rate matters still pending that could impact net income, cash flows and possibly financial condition. The following discusses ratemaking developments in 2016 and updates the 2015 Annual Report. Regulatory Assets Pending Final Regulatory Approval AEP March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Earning a Return Storm Related Costs $ 24.8 $ 24.2 Plant Retirement Costs - Materials and Supplies 20.8 20.9 Regulatory Assets Currently Not Earning a Return Plant Retirement Costs - Asset Retirement Obligation Costs 59.8 59.8 Storm Related Costs 23.2 18.2 Peak Demand Reduction/Energy Efficiency 14.1 13.1 Other Regulatory Assets Pending Final Regulatory Approval 35.4 31.7 Total Regulatory Assets Pending Final Regulatory Approval $ 178.1 $ 167.9 APCo March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Earning a Return Plant Retirement Costs - Materials and Supplies $ 9.2 $ 9.3 Regulatory Assets Currently Not Earning a Return Plant Retirement Costs - Asset Retirement Obligation Costs 32.7 32.7 Peak Demand Reduction/Energy Efficiency - Virginia 13.6 12.7 Amos Plant Transfer Costs - West Virginia 2.0 2.0 Other Regulatory Assets Pending Final Regulatory Approval 0.6 0.6 Total Regulatory Assets Pending Final Regulatory Approval $ 58.1 $ 57.3 I&M March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Earning a Return Plant Retirement Costs - Materials and Supplies $ 11.6 $ 11.6 Regulatory Assets Currently Not Earning a Return Plant Retirement Costs - Asset Retirement Obligation Costs - Indiana 27.1 27.1 Cook Plant Turbine 10.4 9.7 Deferred Cook Plant Life Cycle Management Project Costs - Michigan 5.4 4.2 Stranded Costs on Abandoned Plants 3.9 3.9 Rockport Dry Sorbent Injection System - Indiana 3.6 2.8 Other Regulatory Assets Pending Final Regulatory Approval 0.2 — Total Regulatory Assets Pending Final Regulatory Approval $ 62.2 $ 59.3 OPCo March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Not Earning a Return gridSMART ® Costs $ 1.8 $ 1.3 Total Regulatory Assets Pending Final Regulatory Approval $ 1.8 $ 1.3 PSO March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Not Earning a Return Storm Related Costs $ 17.0 $ 12.3 Other Regulatory Assets Pending Final Regulatory Approval 1.1 1.1 Total Regulatory Assets Pending Final Regulatory Approval $ 18.1 $ 13.4 SWEPCo March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Not Earning a Return Shipe Road Transmission Project - FERC $ 3.1 $ 3.1 Asset Retirement Obligation - Arkansas, Louisiana 1.9 1.7 Other Regulatory Assets Pending Final Regulatory Approval 1.4 1.1 Total Regulatory Assets Pending Final Regulatory Approval $ 6.4 $ 5.9 If these costs are ultimately determined not to be recoverable, it could reduce future net income and cash flows and impact financial condition. APCo and WPCo Rate Matters (Applies to AEP and APCo) 2016 West Virginia Expanded Net Energy Charge Filing In March 2016, APCo and WPCo filed their combined annual ENEC filing with the WVPSC which requested an increase in ENEC rates of $108 million ( $86 million related to APCo) to be effective July 2016. The increase primarily relates to recovery of the December 2015 under-recovered ENEC deferral balance and the recovery of costs associated with the continuation and expansion of certain transmission and generation construction projects. If any of these costs are not recoverable, it could reduce future net income and cash flows and impact financial condition. West Virginia Deferred Base Rate Increase In May 2015, the WVPSC issued an order on APCo and WPCo’s combined base rate case. The order included a delayed billing of $25 million ( $22 million related to APCo) of the annual base rate increase to residential customers until July 2016. The order provided for carrying charges based upon a weighted average cost of capital (WACC) rate for the $25 million annual delayed billing through June 2016, and stated recovery would be addressed concurrent with the next ENEC change in rates. In February 2016, APCo and WPCo filed a petition with the WVPSC to implement recovery of the unrecognized delayed billing totaling $29 million ( $26 million related to APCo), which includes carrying charges through June 2016. Recovery of the delayed billing was requested over two years, beginning July 2016, with the unpaid principal subject to carrying charges. An order from the WVPSC is pending. 2015 Virginia Regulatory Asset Proceeding In 2015, the Virginia SCC initiated a proceeding to address the proper treatment of APCo’s authorized regulatory assets. Briefs related to this proceeding were filed by various parties. The Virginia SCC has no statutory deadline to issue its decision in this proceeding. As of March 31, 2016 , APCo’s authorized regulatory assets under review in this proceeding were $8 million . If any of these costs, or any additional costs that may be subject to review, are not recoverable, it could reduce future net income and cash flows and impact financial condition. Virginia Legislation Affecting Biennial Reviews In February 2015, amendments to Virginia law governing the regulation of investor-owned electric utilities were enacted. Under the amended Virginia law, APCo’s existing generation and distribution base rates are frozen until after the Virginia SCC rules on APCo’s next biennial review, which APCo will file in March 2020 for the 2018 and 2019 test years. These amendments also preclude the Virginia SCC from performing biennial reviews of APCo’s earnings for the years 2014 through 2017. APCo’s financial statements adequately address the impact of these amendments. The amendments provide that APCo will absorb its Virginia jurisdictional share of incremental generation and distribution costs incurred during 2014 through 2017 that are associated with severe weather events and/or natural disasters and costs associated with potential asset impairments related to new carbon emission guidelines issued by the Federal EPA. In February 2016, certain APCo industrial customers filed a petition with the Virginia SCC requesting the issuance of a declaratory order that finds the amendments to Virginia law suspending biennial reviews unconstitutional and, accordingly, directs APCo to make biennial review filings beginning in 2016. In February 2016, APCo filed a motion to stay the Virginia SCC’s consideration of the petition due to a pending appeal at the Supreme Court of Virginia by industrial customers of a non-related utility regarding the constitutionality of the amendments. APCo and other parties have filed their responses to the petition. Oral arguments at the Virginia SCC were held in March 2016. Management is unable to predict the outcome of these challenges. If the biennial review process is reinstated in advance of March 2020, it could reduce future net income and cash flows and impact financial condition. ETT Rate Matters (Applies to AEP) ETT Interim Transmission Rates Parent has a 50% equity ownership interest in ETT. Predominantly all of ETT’s revenues are based on interim rate changes that can be filed twice annually and are subject to review and possible true-up in the next filed base rate proceeding. As of March 31, 2016 , AEP’s share of ETT’s cumulative revenues, subject to review, is estimated to be $468 million based upon interim rate increases received from 2009 through 2015. In November 2015, the PUCT ordered ETT to file a base rate case by February 2017. A base rate review could produce a refund if ETT incurs a disallowance of the transmission investment on which an interim increase was based. Management is unable to determine a range of potential losses that are reasonably possible of occurring. A refund of interim transmission rates could reduce future net income and cash flows and impact financial condition. KGPCo Rate Matters (Applies to AEP) Kingsport Base Rate Case In January 2016, KGPCo filed a request with the TRA to increase base rates by $12 million annually based upon a proposed return on common equity of 10.66% . A hearing at the TRA is scheduled for August 2016. If KGPCo does not recover its costs, it could reduce future net income and cash flows and impact financial condition. OPCo Rate Matters (Applies to AEP and OPCo) Ohio Electric Security Plan Filings 2009 – 2011 ESP The PUCO issued an order in March 2009 that modified and approved the ESP which established rates at the start of the April 2009 billing cycle through 2011. The order also provided a phase-in FAC, which was authorized to be recovered through a non-bypassable surcharge over the period 2012 through 2018. In 2012, the PUCO issued an order in a separate proceeding which implemented a PIRR to recover deferred fuel costs in rates beginning September 2012. The PUCO ruled that carrying charges should be calculated without an offset for accumulated deferred income taxes and that a long-term debt rate should be applied when collections begin. In November 2012, OPCo appealed that PUCO order to the Supreme Court of Ohio claiming a long-term debt rate modified the previously adjudicated 2009 - 2011 ESP order, which granted a WACC rate. In June 2015, the Supreme Court of Ohio issued a decision that reversed the PUCO order on the carrying cost rate issue. In October 2015 this matter was remanded back to the PUCO for reinstatement of the WACC rate. A decision from the PUCO is pending. June 2012 – May 2015 ESP Including Capacity Charge In August 2012, the PUCO issued an order which adopted and modified a new ESP that established base generation rates through May 2015. In 2013, this ruling was generally upheld in rehearing orders. In July 2012, the PUCO issued an order in a separate capacity proceeding which stated that OPCo must charge CRES providers the RPM price and authorized OPCo to defer a portion of its incurred capacity costs not recovered from CRES providers up to $188.88 /MW day. The OPCo RPM price collected from CRES providers, which included reserve margins, was approximately $34 /MW day through May 2014 and $150 /MW day from June 2014 through May 2015. In December 2012, various parties filed notices of appeal of the capacity costs decision with the Supreme Court of Ohio. Oral arguments at the Supreme Court of Ohio were held in December 2015. As part of the August 2012 ESP order, the PUCO established a non-bypassable RSR, effective September 2012. The RSR was collected from customers at $3.50 /MWh through May 2014 and at $4.00 /MWh for the period June 2014 through May 2015, with $1.00 /MWh applied to the recovery of deferred capacity costs. In April 2015, the PUCO issued an order that approved, with modifications, OPCo’s July 2014 application to collect the unrecovered portion of the deferred capacity costs. The order included approval to continue the collection of deferred capacity costs at a rate of $4.00 /MWh beginning June 1, 2015 for approximately 32 months, with carrying costs at a long-term cost of debt rate. Additionally, the order stated that an audit will be conducted of the May 31, 2015 capacity deferral balance, which was $444 million . In May 2015, the PUCO granted intervenors requests for rehearing. As of March 31, 2016 , OPCo’s net deferred capacity costs balance of $320 million , including debt carrying costs, was recorded in Regulatory Assets on the balance sheet. Through March 31, 2016 , OPCo has collected $266 million in deferred capacity costs, and related carrying charges. In 2013, the PUCO issued its Orders on Rehearing for the ESP which generally upheld its August 2012 order. The PUCO clarified that a final reconciliation of revenues and expenses would be permitted for any over- or under-recovery on several riders including fuel. In addition, the PUCO addressed certain issues around the energy auctions while other SSO issues related to the energy auctions were deferred to a separate docket related to the competitive bid process (CBP). In 2013, OPCo and various intervenors filed appeals with the Supreme Court of Ohio challenging portions of the PUCO’s ESP order. Oral arguments at the Supreme Court of Ohio were held in May 2015. In November 2013, the PUCO issued an order approving OPCo’s CBP with modifications. The PUCO also approved the unbundling of the FAC into fixed and energy-related components and an intervenor proposal to blend the $188.88/MW day capacity price in proportion to the percentage of energy planned to be auctioned. Additionally, the PUCO ordered that intervenor concerns related to the recovery of the fixed fuel costs through potentially both the FAC and the approved capacity charges be addressed in subsequent FAC proceedings. In January 2014, the PUCO denied all rehearing requests and agreed to issue a supplemental request for an independent auditor in the 2012 - 2013 FAC proceeding to separately examine the recovery of the fixed fuel costs, including OVEC. In March 2014, the PUCO approved OPCo’s request to implement riders related to the unbundling of the FAC. In October 2014, the independent auditor, selected by the PUCO, filed its report with the PUCO for the period August 2012 through May 2015. If the PUCO ultimately concludes that a portion of the fixed fuel costs are also recovered through OPCo’s $188.88/MW day capacity charge, the independent auditor has recommended a methodology for calculating a refund of a portion of certain fixed fuel costs. The retail share of these fixed fuel costs is approximately $90 million annually. A hearing related to this matter has not been scheduled. Management believes that no over-recovery of costs has occurred and disagrees with the findings in the audit report. In April 2016, the Supreme Court of Ohio issued two opinions related to the deferral of OPCo’s capacity charges. The Supreme Court of Ohio ruled that the PUCO must reconsider an energy credit that was used to determine OPCo’s authorized capacity deferral threshold of $188.88/MW day during the August 2012 through May 2015 period. The PUCO reduced OPCo’s authorized capacity deferral threshold to $188.88/MW day largely due to an offset for an energy credit of $147.41 /MW day. The Supreme Court of Ohio directed the PUCO to substantively address OPCo’s arguments that the $147.41/MW day credit was overstated by approximately $100.00 /MW day due to various inaccuracies affecting input data and assumptions. The Supreme Court of Ohio also rejected a portion of OPCo’s RSR revenues collected during the period September 2012 through May 2015 and directed the PUCO to apply these RSR revenues against OPCo’s deferred capacity costs. The Supreme Court of Ohio was not able to determine the amount of the reduction to OPCo’s deferred capacity costs and remanded the issue to the PUCO to determine the appropriate reduction. Due to the interrelated nature of these two Supreme Court of Ohio opinions that directly relate to OPCo’s deferred capacity costs, management believes that the PUCO will rule upon both issues together. Further, management believes that the net impact of these issues will largely offset and will not result in a material future reduction of OPCo’s net income. Additionally, the Supreme Court of Ohio agreed with OPCo’s cross-appeal assertion that the 12% threshold was not based on a comparison of OPCo’s return on equity to the returns during the same period of comparable publicly traded companies, including utilities, that face comparable business and financial risk. The Supreme Court of Ohio reversed the 12% threshold and remanded this issue to the PUCO. See “Significantly Excessive Earnings Test Filings” section below. If OPCo is ultimately not permitted to fully collect all components of its ESP rates, it could reduce future net income and cash flows and impact financial condition. June 2015 - May 2018 ESP Including PPA Application In December 2013, OPCo filed an application with the PUCO to approve an ESP that included proposed rate adjustments and the continuation and modification of certain existing riders, including the Distribution Investment Rider (DIR), effective June 2015 through May 2018. The proposal also included a PPA rider that would allow retail customers to receive a rate stabilizing charge or credit by hedging market-based prices with a cost-based PPA. The PPA would initially be based upon the OVEC contractual entitlement and could, upon further approval, be expanded to include other contracts involving other Ohio legacy generation assets. In February 2015, the PUCO issued an order approving OPCo’s ESP application, subject to certain modifications, with a return on common equity of 10.2% on capital costs for certain riders. The order included (a) approval of the DIR, with modified rate caps established by the PUCO, (b) authorization to establish a zero rate rider for OPCo’s proposed PPA, (c) the option for OPCo to reapply in a future proceeding with a more detailed PPA proposal and (d) a directive to continue to pursue the transfer of the OVEC contractual entitlement to AGR or to otherwise divest of its interest in OVEC. In May 2015, the PUCO issued an order on rehearing that increased the DIR rate caps and deferred ruling on all requests for rehearing related to the establishment of the PPA rider. In July 2015, the PUCO granted OPCo’s and various intervenors’ requests for rehearing related to the May 2015 order. In May 2015, OPCo filed an amended PPA application that (a) included OPCo’s OVEC contractual entitlement, (b) addressed the PPA requirements set forth in the PUCO’s February 2015 order, (c) updated supporting testimony to reflect a current analysis of the PPA proposal and (d) included the 2,671 MW to be available for capacity, energy and ancillary services, produced by AGR over the lives of the respective generating units. In December 2015, a contested stipulation agreement related to the PPA rider application was filed with the PUCO. The stipulation agreement provided for a 10.38% return on common equity, for AGR, with the PPA rider term extending through May 2024. The stipulation agreement included (a) an affiliate PPA between OPCo and AGR to be included in the PPA rider, (b) OPCo’s OVEC contractual entitlement to be included in the PPA rider, (c) potential additional contingent customer credits of up to $100 million to be included in the PPA rider over the final four years of the PPA rider, (d) annual compliance reviews before the PUCO, (e) an agreement to retire, refuel or repower to 100% natural gas, Conesville Plant, Units 5 and 6 and Cardinal Plant, Unit 1 by 2029 and 2030, respectively, and (f) a commitment by OPCo to submit an amended ESP filing by April 30, 2016 which would extend all ESP riders through May 2024. Additionally, subject to cost recovery and PUCO approval, OPCo agreed to develop and implement, by 2021, a solar energy project(s) of at least 400 MW and a wind energy project(s) of at least 500 MW, with 100% of all output to be received by OPCo. AEP affiliates could own up to 50% of these solar and wind projects. OPCo agreed to file a carbon reduction plan with the PUCO by December 2016 that will focus on fuel diversification and carbon emission reductions. In March 2016, the PUCO modified and approved the stipulation agreement. The PPA is effective April 2016 through May 2024, with quarterly PPA rider reconciliations to actual PPA costs compared to PJM market revenues, subject to audit and review by the PUCO. PUCO modifications to the stipulation agreement included (a) a temporary customer-specific rate impact cap of 5% through May 2018, (b) a directive that OPCo will not seek recovery from customers for any costs associated with the retirement, refueling, co-firing or repowering of PPA units, (c) the limitation that OPCo will not flow through any capacity performance penalties or bonuses through the PPA rider, (d) the right for the PUCO to exclude costs associated with a forced outage lasting longer than 90 days, (e) the limitation that OPCo will not flow through any net costs or revenues associated with AGR’s obligations or entitlements related to Cardinal Plant, Units 2 and 3 and (f) the right for the PUCO to re-evaluate or modify the PPA rider if there is a change to PJM’s tariffs or rules that prohibits the PPA units from being bid into PJM auctions. The PUCO order did not modify OPCo’s agreement to provide potential additional customer credits of up to $100 million during the final four years of the PPA rider, which are shown in the following table: PJM Planning Year Potential Credit June 2020 through May 2021 $10 million June 2021 through May 2022 $20 million June 2022 through May 2023 $30 million June 2023 through May 2024 $40 million In accordance with accounting guidance for “Contingencies,” management will perform ongoing reviews of projected PPA plant costs compared to related market prices for energy and capacity to determine if additional credits to customers are probable. Management is unable to determine a range of potential losses that are reasonably possible of occurring. Potential PPA credits could reduce future net income and cash flows and impact financial condition. In January 2016, a complaint was filed at the FERC against AGR and OPCo related to the PPA. The complaint asserts that the affiliate PPA between AGR and OPCo is reviewable by the FERC under its standards for affiliate transactions. In March 2016, a group of merchant generation owners filed a complaint at the FERC against PJM seeking revisions to the Minimum Offer Price Rule (MOPR) in PJM’s tariff. The complaint against PJM requested the FERC act in advance of the May 2016 Base Residual Auction for the 2019/2020 delivery year to expand the MOPR to certain existing generating units that receive revenues from sources other than the PJM market and are entered into on or after January 1, 2016. If approved as proposed, the revised MOPR would apply to the PPA units and could affect bidding into PJM. In April 2016, the FERC issued an order granting the January 2016 complaint filed against AGR and OPCo. The FERC order rescinded the waivers of the FERC’s affiliate rules as to the affiliate PPA between AGR and OPCo. As a result, AGR and OPCo are required to submit the affiliate PPA to the FERC for review in accordance with FERC’s rules governing affiliate transactions. The affiliate PPA is not effective until the FERC review is completed and the affiliate PPA is approved. Management is evaluating its alternatives in response to this order. If OPCo is ultimately not permitted to fully collect all components of its ESP rates, it could reduce future net income and cash flows and impact financial condition. Significantly Excessive Earnings Test Filings In 2011, the PUCO issued an order on the 2009 SEET filing. The order gave consideration for a future commitment to invest $20 million to support the development of a large solar farm. In 2013, the PUCO found there was not a need for the large solar farm. The PUCO noted that OPCo remains obligated to spend $20 million on this solar project or another project. In September 2013, a proposed second phase of OPCo’s gridSMART ® ( gridSMART ® Phase II) program was filed with the PUCO which included a proposed project to satisfy the PUCO 2009 SEET directive. In April 2016, a stipulation agreement related to the gridSMART ® Phase II program was filed with the PUCO. As part of the stipulation agreement, OPCo will invest at least $20 million over a six-year period for the installation of Volt VAR Optimization (VVO) technology on selected circuits throughout OPCo’s service territory. All parties to the stipulation agree that OPCo’s proposed VVO investment resolves OPCo’s outstanding obligation for renewable or similar investment associated with the PUCO’s 2009 SEET directive. A decision from the PUCO is pending. In June 2015, OPCo submitted its 2014 SEET filing with the PUCO. Management believes its financial statements adequately address the impact of 2014 SEET requirements. 2009 Fuel Adjustment Clause Audit In January 2012, the PUCO issued an order in OPCo’s 2009 FAC that the remaining $65 million in proceeds from a 2008 coal contract settlement agreement be applied against OPCo’s under-recovered fuel balance. In April 2012, on rehearing, the PUCO ordered that the settlement credit only needed to reflect the Ohio retail jurisdictional share of the gain not already flowed through the FAC with carrying charges. As a result, OPCo recorded a $30 million net favorable adjustment on the statement of income in 2012. The January 2012 PUCO order also stated that a consultant should be hired to review the coal reserve valuation and recommend whether any additional value should benefit ratepayers. In September 2014, the Supreme Court of Ohio upheld the PUCO order on appeal. A review of the coal reserve valuation by an outside consultant has not been initiated by the PUCO. If the PUCO ultimately determines that additional amounts should benefit ratepayers as a result of the consultant’s review of the coal reserve valuation, it could reduce future net income and cash flows and impact financial condition. 2012 and 2013 Fuel Adjustment Clause Audits In May 2014, the PUCO-selected outside consultant provided its final report related to its 2012 and 2013 FAC audit which included certain unfavorable recommendations related to the FAC recovery for 2012 and 2013. These recommendations are opposed by OPCo. In addition, the PUCO will consider the results of the final audit of the recovery of fixed fuel costs that was issued in October 2014. See the “June 2012 - May 2015 ESP Including Capacity Charge” section above. If the PUCO orders a reduction to the FAC deferral or a refund to customers, it could reduce future net income and cash flows and impact financial condition. Ormet Ormet, a large aluminum company, had a contract to purchase power from OPCo. In OPCo’s 2009 - 2011 ESP proceeding, intervenors requested that OPCo be required to refund the Ormet-related revenues under a previous interim arrangement (effective from January 2009 through September 2009) and requested that the PUCO prevent OPCo from collecting Ormet-related revenues in the future. Through September 2009, the last month of the interim arrangement, OPCo had $64 million of deferred FAC costs related to the interim arrangement, excluding $2 million of unrecognized equity carrying costs. The PUCO did not take any action on this request. The intervenors raised this issue again in response to OPCo’s filing to approve recovery of the deferral under the interim agreement. To the extent amounts discussed above are refunded to customers, it could reduce future net income and cash flows and impact financial condition. PSO Rate Matters (Applies to AEP and PSO) 2015 Oklahoma Base Rate Case In July 2015, PSO filed a request with the OCC to increase annual revenues by $137 million to recover costs associated with its environmental compliance plan for the Federal EPA’s Regional Haze Rule and Mercury and Air Toxics Standards, and to recover investments and other costs that have increased since the last base rate case. The annual increase consists of (a) a base rate increase of $89 million , which includes $48 million in increased depreciation expense that reflects, among other things, recovery through June 2026 of Northeastern Plant, Units 3 and 4, (b) a rider or base rate increase of $44 million to recover costs for the environmental controls being installed on Northeastern Plant, Unit 3 and the Comanche Plant and (c) a request to include environmental consumable costs in the FAC, estimated to be $4 million annually. The rate increase includes a proposed return on common equity of 10.5% effective in January 2016. The proposed $44 million increase related to environmental investments was effective in March 2016, after the Northeastern Plant, Unit 3 environmental controls were placed in service. The total estimated cost of the environmental controls to be installed at Northeastern Plant, Unit 3 and the Comanche Plant is $219 million , excluding AFUDC. As of March 31, 2016 , PSO had incurred costs of $208 million related to these projects, including AFUDC. In addition, the filing also notified the OCC that the incremental replacement capacity and energy costs, including the first year effects of new PPAs, estimated to be $35 million , will be incurred related to the environmental compliance plan due to the closure of Northeastern Plant, Unit 4, which would be recovered through the FAC. As of March 31, 2016 , the net book value of Northeastern Plant, Unit 4 was $94 million , before cost of removal, including materials and supplies inventory and CWIP. Northeastern Plant, Unit 4 was considered probable of abandonment and was retired in April 2016. In October 2015, testimony was filed by OCC staff and intervenors with recommendations that included increases to base rates and/or the proposed environmental rider ranging from $10 million to $31 million , based upon returns on common equity ranging from 8.75% to 9.3% , and increases to depreciation expense ranging from $23 million to $46 million . Additionally, recommendations by certain intervenors included (a) no recovery of PSO’s investment in Northeastern Plant, Unit 3 environmental controls, (b) no recovery of the plant balances at the time the units are retired in 2016 and 2026, (c) denial of returns on the book values after the retirement dates, or to be set at only the cost of debt, and (d) the disallowance of the capacity costs associated with the PPAs. Additionally, some intervenors recommended no change in depreciation rates for Northeastern Plant, Units 3 and 4. These units are currently being depreciated through 2040. Hearings at the OCC were held in December 2015. In January 2016, PSO implemented an interim annual base rate increase of $75 million . These interim rates are subject to refund pending a final order from the OCC related to the initial $137 million request. An order from the OCC is anticipated by the end of the third quarter of 2016. If any of these costs are not recoverable, it could reduce future net income and cash flows and impact financial condition. SWEPCo Rate Matters (Applies to AEP and SWEPCo) 2012 Texas Base Rate Case In 2012, SWEPCo filed a request with the PUCT to increase annual base rates primarily due to the completion of the Turk Plant. In 2013, the PUCT issued an order affirming the prudence of the Turk Plant but determined that the Turk Plant’s Texas jurisdictional capital cost cap established in a previous Certificate of Convenience and Necessity case also limited SWEPCo’s recovery of AFUDC in addition to limits on its recovery of cash construction costs. Additionally, the PUCT deferred consideration of the requested increase in depreciation expense related to the change in the 2016 retirement date of the Welsh Plant, Unit 2. Upon rehearing in 2014, the PUCT reversed its initial ruling and determined that AFUDC was excluded from the Turk Plant’s Texas jurisdictional capital cost cap. As a result, in the fourth quarter of 2013, SWEPCo reversed $114 million of previously recorded regulatory disallowances. The resulting annual base rate increase was approximately $52 million . In May 2014, intervenors filed appeals of that order with the Texas District Court. In June 2014, SWEPCo intervened in those appeals. If certain parts of the PUCT order are overturned or if SWEPCo cannot ultimately recover its Texas jurisdictional share of the Turk Plant investment, including AFUDC, it could reduce future net income and cash flows and impact financial condition. 2012 Louisiana Formula Rate Filing In 2012, SWEPCo initiated a proceeding to establish new formula base rates in Louisiana, including recovery of the Louisiana jurisdictional share (approximately 29% ) of the Turk Plant. In February 2013, a settlement was filed and approved by the LPSC. The settlement increased SWEPCo’s Louisiana total rates by approximately $2 million annually, effective March 2013, which consisted of an increase in base rates of approximately $85 million annually offset by a decrease in fuel and other rates o |
Public Service Co Of Oklahoma [Member] | |
Rate Matters | RATE MATTERS The disclosures in this note apply to all Registrants unless indicated otherwise. As discussed in the 2015 Annual Report, the Registrants are involved in rate and regulatory proceedings at the FERC and their state commissions. The Rate Matters note within the 2015 Annual Report should be read in conjunction with this report to gain a complete understanding of material rate matters still pending that could impact net income, cash flows and possibly financial condition. The following discusses ratemaking developments in 2016 and updates the 2015 Annual Report. Regulatory Assets Pending Final Regulatory Approval AEP March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Earning a Return Storm Related Costs $ 24.8 $ 24.2 Plant Retirement Costs - Materials and Supplies 20.8 20.9 Regulatory Assets Currently Not Earning a Return Plant Retirement Costs - Asset Retirement Obligation Costs 59.8 59.8 Storm Related Costs 23.2 18.2 Peak Demand Reduction/Energy Efficiency 14.1 13.1 Other Regulatory Assets Pending Final Regulatory Approval 35.4 31.7 Total Regulatory Assets Pending Final Regulatory Approval $ 178.1 $ 167.9 APCo March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Earning a Return Plant Retirement Costs - Materials and Supplies $ 9.2 $ 9.3 Regulatory Assets Currently Not Earning a Return Plant Retirement Costs - Asset Retirement Obligation Costs 32.7 32.7 Peak Demand Reduction/Energy Efficiency - Virginia 13.6 12.7 Amos Plant Transfer Costs - West Virginia 2.0 2.0 Other Regulatory Assets Pending Final Regulatory Approval 0.6 0.6 Total Regulatory Assets Pending Final Regulatory Approval $ 58.1 $ 57.3 I&M March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Earning a Return Plant Retirement Costs - Materials and Supplies $ 11.6 $ 11.6 Regulatory Assets Currently Not Earning a Return Plant Retirement Costs - Asset Retirement Obligation Costs - Indiana 27.1 27.1 Cook Plant Turbine 10.4 9.7 Deferred Cook Plant Life Cycle Management Project Costs - Michigan 5.4 4.2 Stranded Costs on Abandoned Plants 3.9 3.9 Rockport Dry Sorbent Injection System - Indiana 3.6 2.8 Other Regulatory Assets Pending Final Regulatory Approval 0.2 — Total Regulatory Assets Pending Final Regulatory Approval $ 62.2 $ 59.3 OPCo March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Not Earning a Return gridSMART ® Costs $ 1.8 $ 1.3 Total Regulatory Assets Pending Final Regulatory Approval $ 1.8 $ 1.3 PSO March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Not Earning a Return Storm Related Costs $ 17.0 $ 12.3 Other Regulatory Assets Pending Final Regulatory Approval 1.1 1.1 Total Regulatory Assets Pending Final Regulatory Approval $ 18.1 $ 13.4 SWEPCo March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Not Earning a Return Shipe Road Transmission Project - FERC $ 3.1 $ 3.1 Asset Retirement Obligation - Arkansas, Louisiana 1.9 1.7 Other Regulatory Assets Pending Final Regulatory Approval 1.4 1.1 Total Regulatory Assets Pending Final Regulatory Approval $ 6.4 $ 5.9 If these costs are ultimately determined not to be recoverable, it could reduce future net income and cash flows and impact financial condition. APCo and WPCo Rate Matters (Applies to AEP and APCo) 2016 West Virginia Expanded Net Energy Charge Filing In March 2016, APCo and WPCo filed their combined annual ENEC filing with the WVPSC which requested an increase in ENEC rates of $108 million ( $86 million related to APCo) to be effective July 2016. The increase primarily relates to recovery of the December 2015 under-recovered ENEC deferral balance and the recovery of costs associated with the continuation and expansion of certain transmission and generation construction projects. If any of these costs are not recoverable, it could reduce future net income and cash flows and impact financial condition. West Virginia Deferred Base Rate Increase In May 2015, the WVPSC issued an order on APCo and WPCo’s combined base rate case. The order included a delayed billing of $25 million ( $22 million related to APCo) of the annual base rate increase to residential customers until July 2016. The order provided for carrying charges based upon a weighted average cost of capital (WACC) rate for the $25 million annual delayed billing through June 2016, and stated recovery would be addressed concurrent with the next ENEC change in rates. In February 2016, APCo and WPCo filed a petition with the WVPSC to implement recovery of the unrecognized delayed billing totaling $29 million ( $26 million related to APCo), which includes carrying charges through June 2016. Recovery of the delayed billing was requested over two years, beginning July 2016, with the unpaid principal subject to carrying charges. An order from the WVPSC is pending. 2015 Virginia Regulatory Asset Proceeding In 2015, the Virginia SCC initiated a proceeding to address the proper treatment of APCo’s authorized regulatory assets. Briefs related to this proceeding were filed by various parties. The Virginia SCC has no statutory deadline to issue its decision in this proceeding. As of March 31, 2016 , APCo’s authorized regulatory assets under review in this proceeding were $8 million . If any of these costs, or any additional costs that may be subject to review, are not recoverable, it could reduce future net income and cash flows and impact financial condition. Virginia Legislation Affecting Biennial Reviews In February 2015, amendments to Virginia law governing the regulation of investor-owned electric utilities were enacted. Under the amended Virginia law, APCo’s existing generation and distribution base rates are frozen until after the Virginia SCC rules on APCo’s next biennial review, which APCo will file in March 2020 for the 2018 and 2019 test years. These amendments also preclude the Virginia SCC from performing biennial reviews of APCo’s earnings for the years 2014 through 2017. APCo’s financial statements adequately address the impact of these amendments. The amendments provide that APCo will absorb its Virginia jurisdictional share of incremental generation and distribution costs incurred during 2014 through 2017 that are associated with severe weather events and/or natural disasters and costs associated with potential asset impairments related to new carbon emission guidelines issued by the Federal EPA. In February 2016, certain APCo industrial customers filed a petition with the Virginia SCC requesting the issuance of a declaratory order that finds the amendments to Virginia law suspending biennial reviews unconstitutional and, accordingly, directs APCo to make biennial review filings beginning in 2016. In February 2016, APCo filed a motion to stay the Virginia SCC’s consideration of the petition due to a pending appeal at the Supreme Court of Virginia by industrial customers of a non-related utility regarding the constitutionality of the amendments. APCo and other parties have filed their responses to the petition. Oral arguments at the Virginia SCC were held in March 2016. Management is unable to predict the outcome of these challenges. If the biennial review process is reinstated in advance of March 2020, it could reduce future net income and cash flows and impact financial condition. ETT Rate Matters (Applies to AEP) ETT Interim Transmission Rates Parent has a 50% equity ownership interest in ETT. Predominantly all of ETT’s revenues are based on interim rate changes that can be filed twice annually and are subject to review and possible true-up in the next filed base rate proceeding. As of March 31, 2016 , AEP’s share of ETT’s cumulative revenues, subject to review, is estimated to be $468 million based upon interim rate increases received from 2009 through 2015. In November 2015, the PUCT ordered ETT to file a base rate case by February 2017. A base rate review could produce a refund if ETT incurs a disallowance of the transmission investment on which an interim increase was based. Management is unable to determine a range of potential losses that are reasonably possible of occurring. A refund of interim transmission rates could reduce future net income and cash flows and impact financial condition. KGPCo Rate Matters (Applies to AEP) Kingsport Base Rate Case In January 2016, KGPCo filed a request with the TRA to increase base rates by $12 million annually based upon a proposed return on common equity of 10.66% . A hearing at the TRA is scheduled for August 2016. If KGPCo does not recover its costs, it could reduce future net income and cash flows and impact financial condition. OPCo Rate Matters (Applies to AEP and OPCo) Ohio Electric Security Plan Filings 2009 – 2011 ESP The PUCO issued an order in March 2009 that modified and approved the ESP which established rates at the start of the April 2009 billing cycle through 2011. The order also provided a phase-in FAC, which was authorized to be recovered through a non-bypassable surcharge over the period 2012 through 2018. In 2012, the PUCO issued an order in a separate proceeding which implemented a PIRR to recover deferred fuel costs in rates beginning September 2012. The PUCO ruled that carrying charges should be calculated without an offset for accumulated deferred income taxes and that a long-term debt rate should be applied when collections begin. In November 2012, OPCo appealed that PUCO order to the Supreme Court of Ohio claiming a long-term debt rate modified the previously adjudicated 2009 - 2011 ESP order, which granted a WACC rate. In June 2015, the Supreme Court of Ohio issued a decision that reversed the PUCO order on the carrying cost rate issue. In October 2015 this matter was remanded back to the PUCO for reinstatement of the WACC rate. A decision from the PUCO is pending. June 2012 – May 2015 ESP Including Capacity Charge In August 2012, the PUCO issued an order which adopted and modified a new ESP that established base generation rates through May 2015. In 2013, this ruling was generally upheld in rehearing orders. In July 2012, the PUCO issued an order in a separate capacity proceeding which stated that OPCo must charge CRES providers the RPM price and authorized OPCo to defer a portion of its incurred capacity costs not recovered from CRES providers up to $188.88 /MW day. The OPCo RPM price collected from CRES providers, which included reserve margins, was approximately $34 /MW day through May 2014 and $150 /MW day from June 2014 through May 2015. In December 2012, various parties filed notices of appeal of the capacity costs decision with the Supreme Court of Ohio. Oral arguments at the Supreme Court of Ohio were held in December 2015. As part of the August 2012 ESP order, the PUCO established a non-bypassable RSR, effective September 2012. The RSR was collected from customers at $3.50 /MWh through May 2014 and at $4.00 /MWh for the period June 2014 through May 2015, with $1.00 /MWh applied to the recovery of deferred capacity costs. In April 2015, the PUCO issued an order that approved, with modifications, OPCo’s July 2014 application to collect the unrecovered portion of the deferred capacity costs. The order included approval to continue the collection of deferred capacity costs at a rate of $4.00 /MWh beginning June 1, 2015 for approximately 32 months, with carrying costs at a long-term cost of debt rate. Additionally, the order stated that an audit will be conducted of the May 31, 2015 capacity deferral balance, which was $444 million . In May 2015, the PUCO granted intervenors requests for rehearing. As of March 31, 2016 , OPCo’s net deferred capacity costs balance of $320 million , including debt carrying costs, was recorded in Regulatory Assets on the balance sheet. Through March 31, 2016 , OPCo has collected $266 million in deferred capacity costs, and related carrying charges. In 2013, the PUCO issued its Orders on Rehearing for the ESP which generally upheld its August 2012 order. The PUCO clarified that a final reconciliation of revenues and expenses would be permitted for any over- or under-recovery on several riders including fuel. In addition, the PUCO addressed certain issues around the energy auctions while other SSO issues related to the energy auctions were deferred to a separate docket related to the competitive bid process (CBP). In 2013, OPCo and various intervenors filed appeals with the Supreme Court of Ohio challenging portions of the PUCO’s ESP order. Oral arguments at the Supreme Court of Ohio were held in May 2015. In November 2013, the PUCO issued an order approving OPCo’s CBP with modifications. The PUCO also approved the unbundling of the FAC into fixed and energy-related components and an intervenor proposal to blend the $188.88/MW day capacity price in proportion to the percentage of energy planned to be auctioned. Additionally, the PUCO ordered that intervenor concerns related to the recovery of the fixed fuel costs through potentially both the FAC and the approved capacity charges be addressed in subsequent FAC proceedings. In January 2014, the PUCO denied all rehearing requests and agreed to issue a supplemental request for an independent auditor in the 2012 - 2013 FAC proceeding to separately examine the recovery of the fixed fuel costs, including OVEC. In March 2014, the PUCO approved OPCo’s request to implement riders related to the unbundling of the FAC. In October 2014, the independent auditor, selected by the PUCO, filed its report with the PUCO for the period August 2012 through May 2015. If the PUCO ultimately concludes that a portion of the fixed fuel costs are also recovered through OPCo’s $188.88/MW day capacity charge, the independent auditor has recommended a methodology for calculating a refund of a portion of certain fixed fuel costs. The retail share of these fixed fuel costs is approximately $90 million annually. A hearing related to this matter has not been scheduled. Management believes that no over-recovery of costs has occurred and disagrees with the findings in the audit report. In April 2016, the Supreme Court of Ohio issued two opinions related to the deferral of OPCo’s capacity charges. The Supreme Court of Ohio ruled that the PUCO must reconsider an energy credit that was used to determine OPCo’s authorized capacity deferral threshold of $188.88/MW day during the August 2012 through May 2015 period. The PUCO reduced OPCo’s authorized capacity deferral threshold to $188.88/MW day largely due to an offset for an energy credit of $147.41 /MW day. The Supreme Court of Ohio directed the PUCO to substantively address OPCo’s arguments that the $147.41/MW day credit was overstated by approximately $100.00 /MW day due to various inaccuracies affecting input data and assumptions. The Supreme Court of Ohio also rejected a portion of OPCo’s RSR revenues collected during the period September 2012 through May 2015 and directed the PUCO to apply these RSR revenues against OPCo’s deferred capacity costs. The Supreme Court of Ohio was not able to determine the amount of the reduction to OPCo’s deferred capacity costs and remanded the issue to the PUCO to determine the appropriate reduction. Due to the interrelated nature of these two Supreme Court of Ohio opinions that directly relate to OPCo’s deferred capacity costs, management believes that the PUCO will rule upon both issues together. Further, management believes that the net impact of these issues will largely offset and will not result in a material future reduction of OPCo’s net income. Additionally, the Supreme Court of Ohio agreed with OPCo’s cross-appeal assertion that the 12% threshold was not based on a comparison of OPCo’s return on equity to the returns during the same period of comparable publicly traded companies, including utilities, that face comparable business and financial risk. The Supreme Court of Ohio reversed the 12% threshold and remanded this issue to the PUCO. See “Significantly Excessive Earnings Test Filings” section below. If OPCo is ultimately not permitted to fully collect all components of its ESP rates, it could reduce future net income and cash flows and impact financial condition. June 2015 - May 2018 ESP Including PPA Application In December 2013, OPCo filed an application with the PUCO to approve an ESP that included proposed rate adjustments and the continuation and modification of certain existing riders, including the Distribution Investment Rider (DIR), effective June 2015 through May 2018. The proposal also included a PPA rider that would allow retail customers to receive a rate stabilizing charge or credit by hedging market-based prices with a cost-based PPA. The PPA would initially be based upon the OVEC contractual entitlement and could, upon further approval, be expanded to include other contracts involving other Ohio legacy generation assets. In February 2015, the PUCO issued an order approving OPCo’s ESP application, subject to certain modifications, with a return on common equity of 10.2% on capital costs for certain riders. The order included (a) approval of the DIR, with modified rate caps established by the PUCO, (b) authorization to establish a zero rate rider for OPCo’s proposed PPA, (c) the option for OPCo to reapply in a future proceeding with a more detailed PPA proposal and (d) a directive to continue to pursue the transfer of the OVEC contractual entitlement to AGR or to otherwise divest of its interest in OVEC. In May 2015, the PUCO issued an order on rehearing that increased the DIR rate caps and deferred ruling on all requests for rehearing related to the establishment of the PPA rider. In July 2015, the PUCO granted OPCo’s and various intervenors’ requests for rehearing related to the May 2015 order. In May 2015, OPCo filed an amended PPA application that (a) included OPCo’s OVEC contractual entitlement, (b) addressed the PPA requirements set forth in the PUCO’s February 2015 order, (c) updated supporting testimony to reflect a current analysis of the PPA proposal and (d) included the 2,671 MW to be available for capacity, energy and ancillary services, produced by AGR over the lives of the respective generating units. In December 2015, a contested stipulation agreement related to the PPA rider application was filed with the PUCO. The stipulation agreement provided for a 10.38% return on common equity, for AGR, with the PPA rider term extending through May 2024. The stipulation agreement included (a) an affiliate PPA between OPCo and AGR to be included in the PPA rider, (b) OPCo’s OVEC contractual entitlement to be included in the PPA rider, (c) potential additional contingent customer credits of up to $100 million to be included in the PPA rider over the final four years of the PPA rider, (d) annual compliance reviews before the PUCO, (e) an agreement to retire, refuel or repower to 100% natural gas, Conesville Plant, Units 5 and 6 and Cardinal Plant, Unit 1 by 2029 and 2030, respectively, and (f) a commitment by OPCo to submit an amended ESP filing by April 30, 2016 which would extend all ESP riders through May 2024. Additionally, subject to cost recovery and PUCO approval, OPCo agreed to develop and implement, by 2021, a solar energy project(s) of at least 400 MW and a wind energy project(s) of at least 500 MW, with 100% of all output to be received by OPCo. AEP affiliates could own up to 50% of these solar and wind projects. OPCo agreed to file a carbon reduction plan with the PUCO by December 2016 that will focus on fuel diversification and carbon emission reductions. In March 2016, the PUCO modified and approved the stipulation agreement. The PPA is effective April 2016 through May 2024, with quarterly PPA rider reconciliations to actual PPA costs compared to PJM market revenues, subject to audit and review by the PUCO. PUCO modifications to the stipulation agreement included (a) a temporary customer-specific rate impact cap of 5% through May 2018, (b) a directive that OPCo will not seek recovery from customers for any costs associated with the retirement, refueling, co-firing or repowering of PPA units, (c) the limitation that OPCo will not flow through any capacity performance penalties or bonuses through the PPA rider, (d) the right for the PUCO to exclude costs associated with a forced outage lasting longer than 90 days, (e) the limitation that OPCo will not flow through any net costs or revenues associated with AGR’s obligations or entitlements related to Cardinal Plant, Units 2 and 3 and (f) the right for the PUCO to re-evaluate or modify the PPA rider if there is a change to PJM’s tariffs or rules that prohibits the PPA units from being bid into PJM auctions. The PUCO order did not modify OPCo’s agreement to provide potential additional customer credits of up to $100 million during the final four years of the PPA rider, which are shown in the following table: PJM Planning Year Potential Credit June 2020 through May 2021 $10 million June 2021 through May 2022 $20 million June 2022 through May 2023 $30 million June 2023 through May 2024 $40 million In accordance with accounting guidance for “Contingencies,” management will perform ongoing reviews of projected PPA plant costs compared to related market prices for energy and capacity to determine if additional credits to customers are probable. Management is unable to determine a range of potential losses that are reasonably possible of occurring. Potential PPA credits could reduce future net income and cash flows and impact financial condition. In January 2016, a complaint was filed at the FERC against AGR and OPCo related to the PPA. The complaint asserts that the affiliate PPA between AGR and OPCo is reviewable by the FERC under its standards for affiliate transactions. In March 2016, a group of merchant generation owners filed a complaint at the FERC against PJM seeking revisions to the Minimum Offer Price Rule (MOPR) in PJM’s tariff. The complaint against PJM requested the FERC act in advance of the May 2016 Base Residual Auction for the 2019/2020 delivery year to expand the MOPR to certain existing generating units that receive revenues from sources other than the PJM market and are entered into on or after January 1, 2016. If approved as proposed, the revised MOPR would apply to the PPA units and could affect bidding into PJM. In April 2016, the FERC issued an order granting the January 2016 complaint filed against AGR and OPCo. The FERC order rescinded the waivers of the FERC’s affiliate rules as to the affiliate PPA between AGR and OPCo. As a result, AGR and OPCo are required to submit the affiliate PPA to the FERC for review in accordance with FERC’s rules governing affiliate transactions. The affiliate PPA is not effective until the FERC review is completed and the affiliate PPA is approved. Management is evaluating its alternatives in response to this order. If OPCo is ultimately not permitted to fully collect all components of its ESP rates, it could reduce future net income and cash flows and impact financial condition. Significantly Excessive Earnings Test Filings In 2011, the PUCO issued an order on the 2009 SEET filing. The order gave consideration for a future commitment to invest $20 million to support the development of a large solar farm. In 2013, the PUCO found there was not a need for the large solar farm. The PUCO noted that OPCo remains obligated to spend $20 million on this solar project or another project. In September 2013, a proposed second phase of OPCo’s gridSMART ® ( gridSMART ® Phase II) program was filed with the PUCO which included a proposed project to satisfy the PUCO 2009 SEET directive. In April 2016, a stipulation agreement related to the gridSMART ® Phase II program was filed with the PUCO. As part of the stipulation agreement, OPCo will invest at least $20 million over a six-year period for the installation of Volt VAR Optimization (VVO) technology on selected circuits throughout OPCo’s service territory. All parties to the stipulation agree that OPCo’s proposed VVO investment resolves OPCo’s outstanding obligation for renewable or similar investment associated with the PUCO’s 2009 SEET directive. A decision from the PUCO is pending. In June 2015, OPCo submitted its 2014 SEET filing with the PUCO. Management believes its financial statements adequately address the impact of 2014 SEET requirements. 2009 Fuel Adjustment Clause Audit In January 2012, the PUCO issued an order in OPCo’s 2009 FAC that the remaining $65 million in proceeds from a 2008 coal contract settlement agreement be applied against OPCo’s under-recovered fuel balance. In April 2012, on rehearing, the PUCO ordered that the settlement credit only needed to reflect the Ohio retail jurisdictional share of the gain not already flowed through the FAC with carrying charges. As a result, OPCo recorded a $30 million net favorable adjustment on the statement of income in 2012. The January 2012 PUCO order also stated that a consultant should be hired to review the coal reserve valuation and recommend whether any additional value should benefit ratepayers. In September 2014, the Supreme Court of Ohio upheld the PUCO order on appeal. A review of the coal reserve valuation by an outside consultant has not been initiated by the PUCO. If the PUCO ultimately determines that additional amounts should benefit ratepayers as a result of the consultant’s review of the coal reserve valuation, it could reduce future net income and cash flows and impact financial condition. 2012 and 2013 Fuel Adjustment Clause Audits In May 2014, the PUCO-selected outside consultant provided its final report related to its 2012 and 2013 FAC audit which included certain unfavorable recommendations related to the FAC recovery for 2012 and 2013. These recommendations are opposed by OPCo. In addition, the PUCO will consider the results of the final audit of the recovery of fixed fuel costs that was issued in October 2014. See the “June 2012 - May 2015 ESP Including Capacity Charge” section above. If the PUCO orders a reduction to the FAC deferral or a refund to customers, it could reduce future net income and cash flows and impact financial condition. Ormet Ormet, a large aluminum company, had a contract to purchase power from OPCo. In OPCo’s 2009 - 2011 ESP proceeding, intervenors requested that OPCo be required to refund the Ormet-related revenues under a previous interim arrangement (effective from January 2009 through September 2009) and requested that the PUCO prevent OPCo from collecting Ormet-related revenues in the future. Through September 2009, the last month of the interim arrangement, OPCo had $64 million of deferred FAC costs related to the interim arrangement, excluding $2 million of unrecognized equity carrying costs. The PUCO did not take any action on this request. The intervenors raised this issue again in response to OPCo’s filing to approve recovery of the deferral under the interim agreement. To the extent amounts discussed above are refunded to customers, it could reduce future net income and cash flows and impact financial condition. PSO Rate Matters (Applies to AEP and PSO) 2015 Oklahoma Base Rate Case In July 2015, PSO filed a request with the OCC to increase annual revenues by $137 million to recover costs associated with its environmental compliance plan for the Federal EPA’s Regional Haze Rule and Mercury and Air Toxics Standards, and to recover investments and other costs that have increased since the last base rate case. The annual increase consists of (a) a base rate increase of $89 million , which includes $48 million in increased depreciation expense that reflects, among other things, recovery through June 2026 of Northeastern Plant, Units 3 and 4, (b) a rider or base rate increase of $44 million to recover costs for the environmental controls being installed on Northeastern Plant, Unit 3 and the Comanche Plant and (c) a request to include environmental consumable costs in the FAC, estimated to be $4 million annually. The rate increase includes a proposed return on common equity of 10.5% effective in January 2016. The proposed $44 million increase related to environmental investments was effective in March 2016, after the Northeastern Plant, Unit 3 environmental controls were placed in service. The total estimated cost of the environmental controls to be installed at Northeastern Plant, Unit 3 and the Comanche Plant is $219 million , excluding AFUDC. As of March 31, 2016 , PSO had incurred costs of $208 million related to these projects, including AFUDC. In addition, the filing also notified the OCC that the incremental replacement capacity and energy costs, including the first year effects of new PPAs, estimated to be $35 million , will be incurred related to the environmental compliance plan due to the closure of Northeastern Plant, Unit 4, which would be recovered through the FAC. As of March 31, 2016 , the net book value of Northeastern Plant, Unit 4 was $94 million , before cost of removal, including materials and supplies inventory and CWIP. Northeastern Plant, Unit 4 was considered probable of abandonment and was retired in April 2016. In October 2015, testimony was filed by OCC staff and intervenors with recommendations that included increases to base rates and/or the proposed environmental rider ranging from $10 million to $31 million , based upon returns on common equity ranging from 8.75% to 9.3% , and increases to depreciation expense ranging from $23 million to $46 million . Additionally, recommendations by certain intervenors included (a) no recovery of PSO’s investment in Northeastern Plant, Unit 3 environmental controls, (b) no recovery of the plant balances at the time the units are retired in 2016 and 2026, (c) denial of returns on the book values after the retirement dates, or to be set at only the cost of debt, and (d) the disallowance of the capacity costs associated with the PPAs. Additionally, some intervenors recommended no change in depreciation rates for Northeastern Plant, Units 3 and 4. These units are currently being depreciated through 2040. Hearings at the OCC were held in December 2015. In January 2016, PSO implemented an interim annual base rate increase of $75 million . These interim rates are subject to refund pending a final order from the OCC related to the initial $137 million request. An order from the OCC is anticipated by the end of the third quarter of 2016. If any of these costs are not recoverable, it could reduce future net income and cash flows and impact financial condition. SWEPCo Rate Matters (Applies to AEP and SWEPCo) 2012 Texas Base Rate Case In 2012, SWEPCo filed a request with the PUCT to increase annual base rates primarily due to the completion of the Turk Plant. In 2013, the PUCT issued an order affirming the prudence of the Turk Plant but determined that the Turk Plant’s Texas jurisdictional capital cost cap established in a previous Certificate of Convenience and Necessity case also limited SWEPCo’s recovery of AFUDC in addition to limits on its recovery of cash construction costs. Additionally, the PUCT deferred consideration of the requested increase in depreciation expense related to the change in the 2016 retirement date of the Welsh Plant, Unit 2. Upon rehearing in 2014, the PUCT reversed its initial ruling and determined that AFUDC was excluded from the Turk Plant’s Texas jurisdictional capital cost cap. As a result, in the fourth quarter of 2013, SWEPCo reversed $114 million of previously recorded regulatory disallowances. The resulting annual base rate increase was approximately $52 million . In May 2014, intervenors filed appeals of that order with the Texas District Court. In June 2014, SWEPCo intervened in those appeals. If certain parts of the PUCT order are overturned or if SWEPCo cannot ultimately recover its Texas jurisdictional share of the Turk Plant investment, including AFUDC, it could reduce future net income and cash flows and impact financial condition. 2012 Louisiana Formula Rate Filing In 2012, SWEPCo initiated a proceeding to establish new formula base rates in Louisiana, including recovery of the Louisiana jurisdictional share (approximately 29% ) of the Turk Plant. In February 2013, a settlement was filed and approved by the LPSC. The settlement increased SWEPCo’s Louisiana total rates by approximately $2 million annually, effective March 2013, which consisted of an increase in base rates of approximately $85 million annually offset by a decrease in fuel and other rates o |
Southwestern Electric Power Co [Member] | |
Rate Matters | RATE MATTERS The disclosures in this note apply to all Registrants unless indicated otherwise. As discussed in the 2015 Annual Report, the Registrants are involved in rate and regulatory proceedings at the FERC and their state commissions. The Rate Matters note within the 2015 Annual Report should be read in conjunction with this report to gain a complete understanding of material rate matters still pending that could impact net income, cash flows and possibly financial condition. The following discusses ratemaking developments in 2016 and updates the 2015 Annual Report. Regulatory Assets Pending Final Regulatory Approval AEP March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Earning a Return Storm Related Costs $ 24.8 $ 24.2 Plant Retirement Costs - Materials and Supplies 20.8 20.9 Regulatory Assets Currently Not Earning a Return Plant Retirement Costs - Asset Retirement Obligation Costs 59.8 59.8 Storm Related Costs 23.2 18.2 Peak Demand Reduction/Energy Efficiency 14.1 13.1 Other Regulatory Assets Pending Final Regulatory Approval 35.4 31.7 Total Regulatory Assets Pending Final Regulatory Approval $ 178.1 $ 167.9 APCo March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Earning a Return Plant Retirement Costs - Materials and Supplies $ 9.2 $ 9.3 Regulatory Assets Currently Not Earning a Return Plant Retirement Costs - Asset Retirement Obligation Costs 32.7 32.7 Peak Demand Reduction/Energy Efficiency - Virginia 13.6 12.7 Amos Plant Transfer Costs - West Virginia 2.0 2.0 Other Regulatory Assets Pending Final Regulatory Approval 0.6 0.6 Total Regulatory Assets Pending Final Regulatory Approval $ 58.1 $ 57.3 I&M March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Earning a Return Plant Retirement Costs - Materials and Supplies $ 11.6 $ 11.6 Regulatory Assets Currently Not Earning a Return Plant Retirement Costs - Asset Retirement Obligation Costs - Indiana 27.1 27.1 Cook Plant Turbine 10.4 9.7 Deferred Cook Plant Life Cycle Management Project Costs - Michigan 5.4 4.2 Stranded Costs on Abandoned Plants 3.9 3.9 Rockport Dry Sorbent Injection System - Indiana 3.6 2.8 Other Regulatory Assets Pending Final Regulatory Approval 0.2 — Total Regulatory Assets Pending Final Regulatory Approval $ 62.2 $ 59.3 OPCo March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Not Earning a Return gridSMART ® Costs $ 1.8 $ 1.3 Total Regulatory Assets Pending Final Regulatory Approval $ 1.8 $ 1.3 PSO March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Not Earning a Return Storm Related Costs $ 17.0 $ 12.3 Other Regulatory Assets Pending Final Regulatory Approval 1.1 1.1 Total Regulatory Assets Pending Final Regulatory Approval $ 18.1 $ 13.4 SWEPCo March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Not Earning a Return Shipe Road Transmission Project - FERC $ 3.1 $ 3.1 Asset Retirement Obligation - Arkansas, Louisiana 1.9 1.7 Other Regulatory Assets Pending Final Regulatory Approval 1.4 1.1 Total Regulatory Assets Pending Final Regulatory Approval $ 6.4 $ 5.9 If these costs are ultimately determined not to be recoverable, it could reduce future net income and cash flows and impact financial condition. APCo and WPCo Rate Matters (Applies to AEP and APCo) 2016 West Virginia Expanded Net Energy Charge Filing In March 2016, APCo and WPCo filed their combined annual ENEC filing with the WVPSC which requested an increase in ENEC rates of $108 million ( $86 million related to APCo) to be effective July 2016. The increase primarily relates to recovery of the December 2015 under-recovered ENEC deferral balance and the recovery of costs associated with the continuation and expansion of certain transmission and generation construction projects. If any of these costs are not recoverable, it could reduce future net income and cash flows and impact financial condition. West Virginia Deferred Base Rate Increase In May 2015, the WVPSC issued an order on APCo and WPCo’s combined base rate case. The order included a delayed billing of $25 million ( $22 million related to APCo) of the annual base rate increase to residential customers until July 2016. The order provided for carrying charges based upon a weighted average cost of capital (WACC) rate for the $25 million annual delayed billing through June 2016, and stated recovery would be addressed concurrent with the next ENEC change in rates. In February 2016, APCo and WPCo filed a petition with the WVPSC to implement recovery of the unrecognized delayed billing totaling $29 million ( $26 million related to APCo), which includes carrying charges through June 2016. Recovery of the delayed billing was requested over two years, beginning July 2016, with the unpaid principal subject to carrying charges. An order from the WVPSC is pending. 2015 Virginia Regulatory Asset Proceeding In 2015, the Virginia SCC initiated a proceeding to address the proper treatment of APCo’s authorized regulatory assets. Briefs related to this proceeding were filed by various parties. The Virginia SCC has no statutory deadline to issue its decision in this proceeding. As of March 31, 2016 , APCo’s authorized regulatory assets under review in this proceeding were $8 million . If any of these costs, or any additional costs that may be subject to review, are not recoverable, it could reduce future net income and cash flows and impact financial condition. Virginia Legislation Affecting Biennial Reviews In February 2015, amendments to Virginia law governing the regulation of investor-owned electric utilities were enacted. Under the amended Virginia law, APCo’s existing generation and distribution base rates are frozen until after the Virginia SCC rules on APCo’s next biennial review, which APCo will file in March 2020 for the 2018 and 2019 test years. These amendments also preclude the Virginia SCC from performing biennial reviews of APCo’s earnings for the years 2014 through 2017. APCo’s financial statements adequately address the impact of these amendments. The amendments provide that APCo will absorb its Virginia jurisdictional share of incremental generation and distribution costs incurred during 2014 through 2017 that are associated with severe weather events and/or natural disasters and costs associated with potential asset impairments related to new carbon emission guidelines issued by the Federal EPA. In February 2016, certain APCo industrial customers filed a petition with the Virginia SCC requesting the issuance of a declaratory order that finds the amendments to Virginia law suspending biennial reviews unconstitutional and, accordingly, directs APCo to make biennial review filings beginning in 2016. In February 2016, APCo filed a motion to stay the Virginia SCC’s consideration of the petition due to a pending appeal at the Supreme Court of Virginia by industrial customers of a non-related utility regarding the constitutionality of the amendments. APCo and other parties have filed their responses to the petition. Oral arguments at the Virginia SCC were held in March 2016. Management is unable to predict the outcome of these challenges. If the biennial review process is reinstated in advance of March 2020, it could reduce future net income and cash flows and impact financial condition. ETT Rate Matters (Applies to AEP) ETT Interim Transmission Rates Parent has a 50% equity ownership interest in ETT. Predominantly all of ETT’s revenues are based on interim rate changes that can be filed twice annually and are subject to review and possible true-up in the next filed base rate proceeding. As of March 31, 2016 , AEP’s share of ETT’s cumulative revenues, subject to review, is estimated to be $468 million based upon interim rate increases received from 2009 through 2015. In November 2015, the PUCT ordered ETT to file a base rate case by February 2017. A base rate review could produce a refund if ETT incurs a disallowance of the transmission investment on which an interim increase was based. Management is unable to determine a range of potential losses that are reasonably possible of occurring. A refund of interim transmission rates could reduce future net income and cash flows and impact financial condition. KGPCo Rate Matters (Applies to AEP) Kingsport Base Rate Case In January 2016, KGPCo filed a request with the TRA to increase base rates by $12 million annually based upon a proposed return on common equity of 10.66% . A hearing at the TRA is scheduled for August 2016. If KGPCo does not recover its costs, it could reduce future net income and cash flows and impact financial condition. OPCo Rate Matters (Applies to AEP and OPCo) Ohio Electric Security Plan Filings 2009 – 2011 ESP The PUCO issued an order in March 2009 that modified and approved the ESP which established rates at the start of the April 2009 billing cycle through 2011. The order also provided a phase-in FAC, which was authorized to be recovered through a non-bypassable surcharge over the period 2012 through 2018. In 2012, the PUCO issued an order in a separate proceeding which implemented a PIRR to recover deferred fuel costs in rates beginning September 2012. The PUCO ruled that carrying charges should be calculated without an offset for accumulated deferred income taxes and that a long-term debt rate should be applied when collections begin. In November 2012, OPCo appealed that PUCO order to the Supreme Court of Ohio claiming a long-term debt rate modified the previously adjudicated 2009 - 2011 ESP order, which granted a WACC rate. In June 2015, the Supreme Court of Ohio issued a decision that reversed the PUCO order on the carrying cost rate issue. In October 2015 this matter was remanded back to the PUCO for reinstatement of the WACC rate. A decision from the PUCO is pending. June 2012 – May 2015 ESP Including Capacity Charge In August 2012, the PUCO issued an order which adopted and modified a new ESP that established base generation rates through May 2015. In 2013, this ruling was generally upheld in rehearing orders. In July 2012, the PUCO issued an order in a separate capacity proceeding which stated that OPCo must charge CRES providers the RPM price and authorized OPCo to defer a portion of its incurred capacity costs not recovered from CRES providers up to $188.88 /MW day. The OPCo RPM price collected from CRES providers, which included reserve margins, was approximately $34 /MW day through May 2014 and $150 /MW day from June 2014 through May 2015. In December 2012, various parties filed notices of appeal of the capacity costs decision with the Supreme Court of Ohio. Oral arguments at the Supreme Court of Ohio were held in December 2015. As part of the August 2012 ESP order, the PUCO established a non-bypassable RSR, effective September 2012. The RSR was collected from customers at $3.50 /MWh through May 2014 and at $4.00 /MWh for the period June 2014 through May 2015, with $1.00 /MWh applied to the recovery of deferred capacity costs. In April 2015, the PUCO issued an order that approved, with modifications, OPCo’s July 2014 application to collect the unrecovered portion of the deferred capacity costs. The order included approval to continue the collection of deferred capacity costs at a rate of $4.00 /MWh beginning June 1, 2015 for approximately 32 months, with carrying costs at a long-term cost of debt rate. Additionally, the order stated that an audit will be conducted of the May 31, 2015 capacity deferral balance, which was $444 million . In May 2015, the PUCO granted intervenors requests for rehearing. As of March 31, 2016 , OPCo’s net deferred capacity costs balance of $320 million , including debt carrying costs, was recorded in Regulatory Assets on the balance sheet. Through March 31, 2016 , OPCo has collected $266 million in deferred capacity costs, and related carrying charges. In 2013, the PUCO issued its Orders on Rehearing for the ESP which generally upheld its August 2012 order. The PUCO clarified that a final reconciliation of revenues and expenses would be permitted for any over- or under-recovery on several riders including fuel. In addition, the PUCO addressed certain issues around the energy auctions while other SSO issues related to the energy auctions were deferred to a separate docket related to the competitive bid process (CBP). In 2013, OPCo and various intervenors filed appeals with the Supreme Court of Ohio challenging portions of the PUCO’s ESP order. Oral arguments at the Supreme Court of Ohio were held in May 2015. In November 2013, the PUCO issued an order approving OPCo’s CBP with modifications. The PUCO also approved the unbundling of the FAC into fixed and energy-related components and an intervenor proposal to blend the $188.88/MW day capacity price in proportion to the percentage of energy planned to be auctioned. Additionally, the PUCO ordered that intervenor concerns related to the recovery of the fixed fuel costs through potentially both the FAC and the approved capacity charges be addressed in subsequent FAC proceedings. In January 2014, the PUCO denied all rehearing requests and agreed to issue a supplemental request for an independent auditor in the 2012 - 2013 FAC proceeding to separately examine the recovery of the fixed fuel costs, including OVEC. In March 2014, the PUCO approved OPCo’s request to implement riders related to the unbundling of the FAC. In October 2014, the independent auditor, selected by the PUCO, filed its report with the PUCO for the period August 2012 through May 2015. If the PUCO ultimately concludes that a portion of the fixed fuel costs are also recovered through OPCo’s $188.88/MW day capacity charge, the independent auditor has recommended a methodology for calculating a refund of a portion of certain fixed fuel costs. The retail share of these fixed fuel costs is approximately $90 million annually. A hearing related to this matter has not been scheduled. Management believes that no over-recovery of costs has occurred and disagrees with the findings in the audit report. In April 2016, the Supreme Court of Ohio issued two opinions related to the deferral of OPCo’s capacity charges. The Supreme Court of Ohio ruled that the PUCO must reconsider an energy credit that was used to determine OPCo’s authorized capacity deferral threshold of $188.88/MW day during the August 2012 through May 2015 period. The PUCO reduced OPCo’s authorized capacity deferral threshold to $188.88/MW day largely due to an offset for an energy credit of $147.41 /MW day. The Supreme Court of Ohio directed the PUCO to substantively address OPCo’s arguments that the $147.41/MW day credit was overstated by approximately $100.00 /MW day due to various inaccuracies affecting input data and assumptions. The Supreme Court of Ohio also rejected a portion of OPCo’s RSR revenues collected during the period September 2012 through May 2015 and directed the PUCO to apply these RSR revenues against OPCo’s deferred capacity costs. The Supreme Court of Ohio was not able to determine the amount of the reduction to OPCo’s deferred capacity costs and remanded the issue to the PUCO to determine the appropriate reduction. Due to the interrelated nature of these two Supreme Court of Ohio opinions that directly relate to OPCo’s deferred capacity costs, management believes that the PUCO will rule upon both issues together. Further, management believes that the net impact of these issues will largely offset and will not result in a material future reduction of OPCo’s net income. Additionally, the Supreme Court of Ohio agreed with OPCo’s cross-appeal assertion that the 12% threshold was not based on a comparison of OPCo’s return on equity to the returns during the same period of comparable publicly traded companies, including utilities, that face comparable business and financial risk. The Supreme Court of Ohio reversed the 12% threshold and remanded this issue to the PUCO. See “Significantly Excessive Earnings Test Filings” section below. If OPCo is ultimately not permitted to fully collect all components of its ESP rates, it could reduce future net income and cash flows and impact financial condition. June 2015 - May 2018 ESP Including PPA Application In December 2013, OPCo filed an application with the PUCO to approve an ESP that included proposed rate adjustments and the continuation and modification of certain existing riders, including the Distribution Investment Rider (DIR), effective June 2015 through May 2018. The proposal also included a PPA rider that would allow retail customers to receive a rate stabilizing charge or credit by hedging market-based prices with a cost-based PPA. The PPA would initially be based upon the OVEC contractual entitlement and could, upon further approval, be expanded to include other contracts involving other Ohio legacy generation assets. In February 2015, the PUCO issued an order approving OPCo’s ESP application, subject to certain modifications, with a return on common equity of 10.2% on capital costs for certain riders. The order included (a) approval of the DIR, with modified rate caps established by the PUCO, (b) authorization to establish a zero rate rider for OPCo’s proposed PPA, (c) the option for OPCo to reapply in a future proceeding with a more detailed PPA proposal and (d) a directive to continue to pursue the transfer of the OVEC contractual entitlement to AGR or to otherwise divest of its interest in OVEC. In May 2015, the PUCO issued an order on rehearing that increased the DIR rate caps and deferred ruling on all requests for rehearing related to the establishment of the PPA rider. In July 2015, the PUCO granted OPCo’s and various intervenors’ requests for rehearing related to the May 2015 order. In May 2015, OPCo filed an amended PPA application that (a) included OPCo’s OVEC contractual entitlement, (b) addressed the PPA requirements set forth in the PUCO’s February 2015 order, (c) updated supporting testimony to reflect a current analysis of the PPA proposal and (d) included the 2,671 MW to be available for capacity, energy and ancillary services, produced by AGR over the lives of the respective generating units. In December 2015, a contested stipulation agreement related to the PPA rider application was filed with the PUCO. The stipulation agreement provided for a 10.38% return on common equity, for AGR, with the PPA rider term extending through May 2024. The stipulation agreement included (a) an affiliate PPA between OPCo and AGR to be included in the PPA rider, (b) OPCo’s OVEC contractual entitlement to be included in the PPA rider, (c) potential additional contingent customer credits of up to $100 million to be included in the PPA rider over the final four years of the PPA rider, (d) annual compliance reviews before the PUCO, (e) an agreement to retire, refuel or repower to 100% natural gas, Conesville Plant, Units 5 and 6 and Cardinal Plant, Unit 1 by 2029 and 2030, respectively, and (f) a commitment by OPCo to submit an amended ESP filing by April 30, 2016 which would extend all ESP riders through May 2024. Additionally, subject to cost recovery and PUCO approval, OPCo agreed to develop and implement, by 2021, a solar energy project(s) of at least 400 MW and a wind energy project(s) of at least 500 MW, with 100% of all output to be received by OPCo. AEP affiliates could own up to 50% of these solar and wind projects. OPCo agreed to file a carbon reduction plan with the PUCO by December 2016 that will focus on fuel diversification and carbon emission reductions. In March 2016, the PUCO modified and approved the stipulation agreement. The PPA is effective April 2016 through May 2024, with quarterly PPA rider reconciliations to actual PPA costs compared to PJM market revenues, subject to audit and review by the PUCO. PUCO modifications to the stipulation agreement included (a) a temporary customer-specific rate impact cap of 5% through May 2018, (b) a directive that OPCo will not seek recovery from customers for any costs associated with the retirement, refueling, co-firing or repowering of PPA units, (c) the limitation that OPCo will not flow through any capacity performance penalties or bonuses through the PPA rider, (d) the right for the PUCO to exclude costs associated with a forced outage lasting longer than 90 days, (e) the limitation that OPCo will not flow through any net costs or revenues associated with AGR’s obligations or entitlements related to Cardinal Plant, Units 2 and 3 and (f) the right for the PUCO to re-evaluate or modify the PPA rider if there is a change to PJM’s tariffs or rules that prohibits the PPA units from being bid into PJM auctions. The PUCO order did not modify OPCo’s agreement to provide potential additional customer credits of up to $100 million during the final four years of the PPA rider, which are shown in the following table: PJM Planning Year Potential Credit June 2020 through May 2021 $10 million June 2021 through May 2022 $20 million June 2022 through May 2023 $30 million June 2023 through May 2024 $40 million In accordance with accounting guidance for “Contingencies,” management will perform ongoing reviews of projected PPA plant costs compared to related market prices for energy and capacity to determine if additional credits to customers are probable. Management is unable to determine a range of potential losses that are reasonably possible of occurring. Potential PPA credits could reduce future net income and cash flows and impact financial condition. In January 2016, a complaint was filed at the FERC against AGR and OPCo related to the PPA. The complaint asserts that the affiliate PPA between AGR and OPCo is reviewable by the FERC under its standards for affiliate transactions. In March 2016, a group of merchant generation owners filed a complaint at the FERC against PJM seeking revisions to the Minimum Offer Price Rule (MOPR) in PJM’s tariff. The complaint against PJM requested the FERC act in advance of the May 2016 Base Residual Auction for the 2019/2020 delivery year to expand the MOPR to certain existing generating units that receive revenues from sources other than the PJM market and are entered into on or after January 1, 2016. If approved as proposed, the revised MOPR would apply to the PPA units and could affect bidding into PJM. In April 2016, the FERC issued an order granting the January 2016 complaint filed against AGR and OPCo. The FERC order rescinded the waivers of the FERC’s affiliate rules as to the affiliate PPA between AGR and OPCo. As a result, AGR and OPCo are required to submit the affiliate PPA to the FERC for review in accordance with FERC’s rules governing affiliate transactions. The affiliate PPA is not effective until the FERC review is completed and the affiliate PPA is approved. Management is evaluating its alternatives in response to this order. If OPCo is ultimately not permitted to fully collect all components of its ESP rates, it could reduce future net income and cash flows and impact financial condition. Significantly Excessive Earnings Test Filings In 2011, the PUCO issued an order on the 2009 SEET filing. The order gave consideration for a future commitment to invest $20 million to support the development of a large solar farm. In 2013, the PUCO found there was not a need for the large solar farm. The PUCO noted that OPCo remains obligated to spend $20 million on this solar project or another project. In September 2013, a proposed second phase of OPCo’s gridSMART ® ( gridSMART ® Phase II) program was filed with the PUCO which included a proposed project to satisfy the PUCO 2009 SEET directive. In April 2016, a stipulation agreement related to the gridSMART ® Phase II program was filed with the PUCO. As part of the stipulation agreement, OPCo will invest at least $20 million over a six-year period for the installation of Volt VAR Optimization (VVO) technology on selected circuits throughout OPCo’s service territory. All parties to the stipulation agree that OPCo’s proposed VVO investment resolves OPCo’s outstanding obligation for renewable or similar investment associated with the PUCO’s 2009 SEET directive. A decision from the PUCO is pending. In June 2015, OPCo submitted its 2014 SEET filing with the PUCO. Management believes its financial statements adequately address the impact of 2014 SEET requirements. 2009 Fuel Adjustment Clause Audit In January 2012, the PUCO issued an order in OPCo’s 2009 FAC that the remaining $65 million in proceeds from a 2008 coal contract settlement agreement be applied against OPCo’s under-recovered fuel balance. In April 2012, on rehearing, the PUCO ordered that the settlement credit only needed to reflect the Ohio retail jurisdictional share of the gain not already flowed through the FAC with carrying charges. As a result, OPCo recorded a $30 million net favorable adjustment on the statement of income in 2012. The January 2012 PUCO order also stated that a consultant should be hired to review the coal reserve valuation and recommend whether any additional value should benefit ratepayers. In September 2014, the Supreme Court of Ohio upheld the PUCO order on appeal. A review of the coal reserve valuation by an outside consultant has not been initiated by the PUCO. If the PUCO ultimately determines that additional amounts should benefit ratepayers as a result of the consultant’s review of the coal reserve valuation, it could reduce future net income and cash flows and impact financial condition. 2012 and 2013 Fuel Adjustment Clause Audits In May 2014, the PUCO-selected outside consultant provided its final report related to its 2012 and 2013 FAC audit which included certain unfavorable recommendations related to the FAC recovery for 2012 and 2013. These recommendations are opposed by OPCo. In addition, the PUCO will consider the results of the final audit of the recovery of fixed fuel costs that was issued in October 2014. See the “June 2012 - May 2015 ESP Including Capacity Charge” section above. If the PUCO orders a reduction to the FAC deferral or a refund to customers, it could reduce future net income and cash flows and impact financial condition. Ormet Ormet, a large aluminum company, had a contract to purchase power from OPCo. In OPCo’s 2009 - 2011 ESP proceeding, intervenors requested that OPCo be required to refund the Ormet-related revenues under a previous interim arrangement (effective from January 2009 through September 2009) and requested that the PUCO prevent OPCo from collecting Ormet-related revenues in the future. Through September 2009, the last month of the interim arrangement, OPCo had $64 million of deferred FAC costs related to the interim arrangement, excluding $2 million of unrecognized equity carrying costs. The PUCO did not take any action on this request. The intervenors raised this issue again in response to OPCo’s filing to approve recovery of the deferral under the interim agreement. To the extent amounts discussed above are refunded to customers, it could reduce future net income and cash flows and impact financial condition. PSO Rate Matters (Applies to AEP and PSO) 2015 Oklahoma Base Rate Case In July 2015, PSO filed a request with the OCC to increase annual revenues by $137 million to recover costs associated with its environmental compliance plan for the Federal EPA’s Regional Haze Rule and Mercury and Air Toxics Standards, and to recover investments and other costs that have increased since the last base rate case. The annual increase consists of (a) a base rate increase of $89 million , which includes $48 million in increased depreciation expense that reflects, among other things, recovery through June 2026 of Northeastern Plant, Units 3 and 4, (b) a rider or base rate increase of $44 million to recover costs for the environmental controls being installed on Northeastern Plant, Unit 3 and the Comanche Plant and (c) a request to include environmental consumable costs in the FAC, estimated to be $4 million annually. The rate increase includes a proposed return on common equity of 10.5% effective in January 2016. The proposed $44 million increase related to environmental investments was effective in March 2016, after the Northeastern Plant, Unit 3 environmental controls were placed in service. The total estimated cost of the environmental controls to be installed at Northeastern Plant, Unit 3 and the Comanche Plant is $219 million , excluding AFUDC. As of March 31, 2016 , PSO had incurred costs of $208 million related to these projects, including AFUDC. In addition, the filing also notified the OCC that the incremental replacement capacity and energy costs, including the first year effects of new PPAs, estimated to be $35 million , will be incurred related to the environmental compliance plan due to the closure of Northeastern Plant, Unit 4, which would be recovered through the FAC. As of March 31, 2016 , the net book value of Northeastern Plant, Unit 4 was $94 million , before cost of removal, including materials and supplies inventory and CWIP. Northeastern Plant, Unit 4 was considered probable of abandonment and was retired in April 2016. In October 2015, testimony was filed by OCC staff and intervenors with recommendations that included increases to base rates and/or the proposed environmental rider ranging from $10 million to $31 million , based upon returns on common equity ranging from 8.75% to 9.3% , and increases to depreciation expense ranging from $23 million to $46 million . Additionally, recommendations by certain intervenors included (a) no recovery of PSO’s investment in Northeastern Plant, Unit 3 environmental controls, (b) no recovery of the plant balances at the time the units are retired in 2016 and 2026, (c) denial of returns on the book values after the retirement dates, or to be set at only the cost of debt, and (d) the disallowance of the capacity costs associated with the PPAs. Additionally, some intervenors recommended no change in depreciation rates for Northeastern Plant, Units 3 and 4. These units are currently being depreciated through 2040. Hearings at the OCC were held in December 2015. In January 2016, PSO implemented an interim annual base rate increase of $75 million . These interim rates are subject to refund pending a final order from the OCC related to the initial $137 million request. An order from the OCC is anticipated by the end of the third quarter of 2016. If any of these costs are not recoverable, it could reduce future net income and cash flows and impact financial condition. SWEPCo Rate Matters (Applies to AEP and SWEPCo) 2012 Texas Base Rate Case In 2012, SWEPCo filed a request with the PUCT to increase annual base rates primarily due to the completion of the Turk Plant. In 2013, the PUCT issued an order affirming the prudence of the Turk Plant but determined that the Turk Plant’s Texas jurisdictional capital cost cap established in a previous Certificate of Convenience and Necessity case also limited SWEPCo’s recovery of AFUDC in addition to limits on its recovery of cash construction costs. Additionally, the PUCT deferred consideration of the requested increase in depreciation expense related to the change in the 2016 retirement date of the Welsh Plant, Unit 2. Upon rehearing in 2014, the PUCT reversed its initial ruling and determined that AFUDC was excluded from the Turk Plant’s Texas jurisdictional capital cost cap. As a result, in the fourth quarter of 2013, SWEPCo reversed $114 million of previously recorded regulatory disallowances. The resulting annual base rate increase was approximately $52 million . In May 2014, intervenors filed appeals of that order with the Texas District Court. In June 2014, SWEPCo intervened in those appeals. If certain parts of the PUCT order are overturned or if SWEPCo cannot ultimately recover its Texas jurisdictional share of the Turk Plant investment, including AFUDC, it could reduce future net income and cash flows and impact financial condition. 2012 Louisiana Formula Rate Filing In 2012, SWEPCo initiated a proceeding to establish new formula base rates in Louisiana, including recovery of the Louisiana jurisdictional share (approximately 29% ) of the Turk Plant. In February 2013, a settlement was filed and approved by the LPSC. The settlement increased SWEPCo’s Louisiana total rates by approximately $2 million annually, effective March 2013, which consisted of an increase in base rates of approximately $85 million annually offset by a decrease in fuel and other rates o |
Commitments, Guarantees and Con
Commitments, Guarantees and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments, Guarantees and Contingencies | COMMITMENTS, GUARANTEES AND CONTINGENCIES The disclosures in this note apply to all Registrants unless indicated otherwise. The Registrants are subject to certain claims and legal actions arising in the ordinary course of business. In addition, the Registrants’ business activities are subject to extensive governmental regulation related to public health and the environment. The ultimate outcome of such pending or potential litigation against the Registrants cannot be predicted. Management accrues contingent liabilities only when management concludes that it is both probable that a liability has been incurred at the date of the financial statements and the amount of loss can be reasonably estimated. When management determines that it is not probable, but rather reasonably possible that a liability has been incurred at the date of the financial statements, management discloses such contingencies and the possible loss or range of loss if such estimate can be made. Any estimated range is based on currently available information and involves elements of judgment and significant uncertainties. Any estimated range of possible loss may not represent the maximum possible loss exposure. Circumstances change over time and actual results may vary significantly from estimates. For current proceedings not specifically discussed below, management does not anticipate that the liabilities, if any, arising from such proceedings would have a material effect on the financial statements. The Commitments, Guarantees and Contingencies note within the 2015 Annual Report should be read in conjunction with this report. GUARANTEES Liabilities for guarantees are recorded in accordance with the accounting guidance for “Guarantees.” There is no collateral held in relation to any guarantees unless specified below. In the event any guarantee is drawn, there is no recourse to third parties unless specified below. Letters of Credit (Applies to AEP, APCo, I&M and OPCo) Standby letters of credit are entered into with third parties. These letters of credit are issued in the ordinary course of business and cover items such as natural gas and electricity risk management contracts, construction contracts, insurance programs, security deposits and debt service reserves. AEP has two revolving credit facilities totaling $3.5 billion , under which up to $1.2 billion may be issued as letters of credit on behalf of subsidiaries. As of March 31, 2016 , AEP’s maximum future payments for letters of credit issued under the revolving credit facilities were $2 million with maturities ranging from October 2016 to December 2016. An uncommitted facility gives the issuer of the facility the right to accept or decline each request made under the facility. AEP also issues letters of credit on behalf of subsidiaries under three uncommitted facilities totaling $225 million . As of March 31, 2016 , the Registrants’ maximum future payments for letters of credit issued under the uncommitted facilities were as follows: Company Amount Maturity (in millions) AEP $ 190.2 June 2016 to March 2017 OPCo 4.2 September 2016 The Registrants have $351 million of variable rate Pollution Control Bonds supported by $355 million of bilateral letters of credit as follows: Company Pollution Control Bonds Bilateral Letters of Credit Maturity of Bilateral Letters of Credit (in millions) AEP $ 351.4 $ 355.4 June 2016 to July 2017 APCo 104.4 105.6 March 2017 I&M 77.0 77.9 March 2017 Guarantees of Third-Party Obligations (Applies to AEP and SWEPCo) As part of the process to receive a renewal of a Texas Railroad Commission permit for lignite mining, SWEPCo provides guarantees of mine reclamation of $115 million . Since SWEPCo uses self-bonding, the guarantee provides for SWEPCo to commit to use its resources to complete the reclamation in the event the work is not completed by Sabine. This guarantee ends upon depletion of reserves and completion of final reclamation. Based on the latest study completed in 2010, it is estimated the reserves will be depleted in 2036 with final reclamation completed by 2046 at an estimated cost of $58 million . Actual reclamation costs could vary due to period inflation and any changes to actual mine reclamation. As of March 31, 2016 , SWEPCo has collected $67 million through a rider for final mine closure and reclamation costs, of which $15 million is recorded in Deferred Credits and Other Noncurrent Liabilities and $52 million is recorded in Asset Retirement Obligations on SWEPCo’s condensed balance sheet. Sabine charges SWEPCo, its only customer, all of its costs. SWEPCo passes these costs to customers through its fuel clause. Indemnifications and Other Guarantees Contracts The Registrants enter into certain types of contracts which require indemnifications. Typically these contracts include, but are not limited to, sale agreements, lease agreements, purchase agreements and financing agreements. Generally, these agreements may include, but are not limited to, indemnifications around certain tax, contractual and environmental matters. With respect to sale agreements, exposure generally does not exceed the sale price. As of March 31, 2016 , there were no material liabilities recorded for any indemnifications. APCo, I&M and OPCo are jointly and severally liable for activity conducted by AEPSC on behalf of AEP companies related to power purchase and sale activity. PSO and SWEPCo are jointly and severally liable for activity conducted by AEPSC on behalf of PSO and SWEPCo related to power purchase and sale activity. Master Lease Agreements The Registrants lease certain equipment under master lease agreements. Under the lease agreements, the lessor is guaranteed a residual value up to a stated percentage of either the unamortized balance or the equipment cost at the end of the lease term. If the actual fair value of the leased equipment is below the guaranteed residual value at the end of the lease term, the Registrants are committed to pay the difference between the actual fair value and the residual value guarantee. Historically, at the end of the lease term the fair value has been in excess of the unamortized balance. As of March 31, 2016 , the maximum potential loss by Registrants for these lease agreements assuming the fair value of the equipment is zero at the end of the lease term is as follows: Company Maximum Potential Loss (in millions) AEP $ 33.6 APCo 4.9 I&M 3.0 OPCo 5.3 PSO 2.8 SWEPCo 3.1 Railcar Lease (Applies to AEP, I&M and SWEPCo) In June 2003, AEP Transportation LLC (AEP Transportation), a subsidiary of AEP, entered into an agreement with BTM Capital Corporation, as lessor, to lease 875 coal-transporting aluminum railcars. The lease is accounted for as an operating lease. In January 2008, AEP Transportation assigned the remaining 848 railcars under the original lease agreement to I&M ( 390 railcars) and SWEPCo ( 458 railcars). The assignments are accounted for as operating leases for I&M and SWEPCo. The initial lease term was five years with three consecutive five-year renewal periods for a maximum lease term of twenty years. I&M and SWEPCo intend to renew these leases for the full lease term of twenty years via the renewal options. The future minimum lease obligations are $9 million and $11 million for I&M and SWEPCo, respectively, for the remaining railcars as of March 31, 2016 . Under the lease agreement, the lessor is guaranteed that the sale proceeds under a return-and-sale option will equal at least a lessee obligation amount specified in the lease, which declines from 83% of the projected fair value of the equipment under the current five year lease term to 77% at the end of the 20 -year term. I&M and SWEPCo have assumed the guarantee under the return-and-sale option. The maximum potential losses related to the guarantee are $9 million and $10 million for I&M and SWEPCo, respectively, as of March 31, 2016 , assuming the fair value of the equipment is zero at the end of the current five -year lease term. However, management believes that the fair value would produce a sufficient sales price to avoid any loss. AEPRO Boat and Barge Leases (Applies to AEP) In October 2015, AEP signed a Purchase and Sale Agreement to sell its commercial barge transportation subsidiary, AEPRO, to a nonaffiliated party. The sale closed in November 2015. See “AEPRO (Corporate and Other)” section of Note 6 . Certain of the boat and barge leases acquired by the nonaffiliated party are subject to an AEP guarantee in favor of the lessor, ensuring future payments under such leases with maturities up to 2027. As of March 31, 2016 , the maximum potential amount of future payments required under the guaranteed leases was $93 million . In certain instances, AEP has no recourse against the nonaffiliated party if required to pay a lessor under a guarantee, but AEP would have access to sell the leased assets in order to recover payments made by AEP under the guarantee. As of March 31, 2016 , AEP’s boat and barge lease guarantee liability was $15 million . ENVIRONMENTAL CONTINGENCIES The Comprehensive Environmental Response Compensation and Liability Act (Superfund) and State Remediation By-products from the generation of electricity include materials such as ash, slag, sludge, low-level radioactive waste and SNF. Coal combustion by-products, which constitute the overwhelming percentage of these materials, are typically treated and deposited in captive disposal facilities or are beneficially utilized. In addition, the generation plants and transmission and distribution facilities have used asbestos, polychlorinated biphenyls and other hazardous and nonhazardous materials. The Registrants currently incur costs to dispose of these substances safely. In 2008, I&M received a letter from the Michigan Department of Environmental Quality (MDEQ) concerning conditions at a site under state law and requesting I&M take voluntary action necessary to prevent and/or mitigate public harm. I&M started remediation work in accordance with a plan approved by MDEQ. In 2014, I&M recorded an accrual for remediation at certain additional sites in Michigan. As a result of receiving approval of completed remediation work from the MDEQ in March 2015, I&M’s accrual was reduced. As of March 31, 2016 , I&M’s accrual for all of these sites is $8 million . As the remediation work is completed, I&M’s cost may change as new information becomes available concerning either the level of contamination at the sites or changes in the scope of remediation. Management cannot predict the amount of additional cost, if any. NUCLEAR CONTINGENCIES (APPLIES TO AEP AND I&M) I&M owns and operates the two-unit 2,191 MW Cook Plant under licenses granted by the Nuclear Regulatory Commission (NRC). I&M has a significant future financial commitment to dispose of SNF and to safely decommission and decontaminate the plant. The licenses to operate the two nuclear units at the Cook Plant expire in 2034 and 2037. The operation of a nuclear facility also involves special risks, potential liabilities and specific regulatory and safety requirements. By agreement, I&M is partially liable, together with all other electric utility companies that own nuclear generation units, for a nuclear power plant incident at any nuclear plant in the U.S. Should a nuclear incident occur at any nuclear power plant in the U.S., the resultant liability could be substantial. OPERATIONAL CONTINGENCIES Rockport Plant Litigation (Applies to AEP and I&M) In July 2013, the Wilmington Trust Company filed a complaint in U.S. District Court for the Southern District of New York against AEGCo and I&M alleging that it will be unlawfully burdened by the terms of the modified NSR consent decree after the Rockport Plant, Unit 2 lease expiration in December 2022. The terms of the consent decree allow the installation of environmental emission control equipment, repowering or retirement of the unit. The plaintiff further alleges that the defendants’ actions constitute breach of the lease and participation agreement. The plaintiff seeks a judgment declaring that the defendants breached the lease, must satisfy obligations related to installation of emission control equipment and indemnify the plaintiff. The New York court granted a motion to transfer this case to the U.S. District Court for the Southern District of Ohio. In October 2013, a motion to dismiss the case was filed on behalf of AEGCo and I&M. In January 2015, the court issued an opinion and order granting the motion in part and denying the motion in part. The court dismissed certain of the plaintiff’s claims. Several claims remained, including the claim for breach of the participation agreement and a claim alleging breach of an implied covenant of good faith and fair dealing. In June 2015, AEGCo and I&M filed a motion for partial judgment on the claims seeking dismissal of the breach of participation agreement claim as well as any claim for indemnification of costs associated with this case. The plaintiff subsequently filed an amended complaint to add another claim under the lease and also filed a motion for partial summary judgment. In November 2015, AEGCo and I&M filed a motion to strike the plaintiff’s motion for partial judgment and filed a motion to dismiss the case for failure to state a claim. In March 2016, the court entered an opinion and order in favor of AEGCo and I&M, dismissing certain of the plaintiffs’ claims for breach of contract and dismissing claims for breach of implied covenant of good faith and fair dealing, and further dismissing plaintiffs’ claim for indemnification of costs. By the same order, the court permitted plaintiffs to move forward with their claim that AEGCo and I&M failed to exercise prudent utility practices in the maintenance and operation of Rockport Plant, Unit 2. In April 2016, the plaintiffs filed a notice of voluntary dismissal of the other remaining claims with prejudice and the court subsequently entered a final judgment. Management is unable to determine a range of potential losses that are reasonably possible of occurring. Natural Gas Markets Lawsuits (Applies to AEP) In 2002, the Lieutenant Governor of California filed a lawsuit in Los Angeles County California Superior Court against numerous energy companies, including AEP, alleging violations of California law through alleged fraudulent reporting of false natural gas price and volume information with an intent to affect the market price of natural gas and electricity. AEP was dismissed from the case. A number of similar cases were also filed in California and in state and federal courts in several states making essentially the same allegations under federal or state laws against the same companies. AEP (or a subsidiary) is among the companies named as defendants in some of these cases. AEP settled, received summary judgment or was dismissed from all of these cases. The plaintiffs appealed the Nevada federal district court’s dismissal of several cases involving AEP companies to the U.S. Court of Appeals for the Ninth Circuit. In April 2013, the appellate court reversed in part, and affirmed in part, the district court’s orders in these cases. The appellate court reversed the district court’s holding that the state antitrust claims were preempted by the Natural Gas Act and the order dismissing AEP from two of the cases on personal jurisdiction grounds and affirmed the decision denying leave to the plaintiffs to amend their complaints in two of the cases. Defendants in these cases, including AEP, filed a petition seeking further review with the U.S. Supreme Court on the preemption issue. AEP also subsequently filed a separate petition with the U.S. Supreme Court seeking review of the personal jurisdiction issue. In July 2014, the U.S. Supreme Court granted the defendants’ previously filed petition for further review with the U.S. Supreme Court on the preemption issue. Oral argument occurred in January 2015. In April 2015, the U.S. Supreme Court affirmed the judgment of the U.S. Court of Appeals for the Ninth Circuit on the preemption issue, holding that the plaintiffs’ state antitrust claims were not preempted by the Natural Gas Act. The U.S. Supreme Court denied AEP’s petition for review of the personal jurisdiction issue shortly thereafter. The cases were remanded to the district court for further proceedings. There are four pending cases, of which three are class actions and one is a single plaintiff case. A tentative settlement has been reached in the three class actions. This settlement, once finalized, will be subject to court approval. Management will continue to defend the remaining case. Management is unable to determine the amount of potential additional loss that is reasonably possible of occurring. Wage and Hours Lawsuit (Applies to AEP and PSO) In August 2013, PSO received an amended complaint filed in the U.S. District Court for the Northern District of Oklahoma by 36 current and former line and warehouse employees alleging that they were denied overtime pay in violation of the Fair Labor Standards Act. Plaintiffs claim that they are entitled to overtime pay for “on call” time. They allege that restrictions placed on them during on call hours are burdensome enough that they are entitled to compensation for these hours as hours worked. Plaintiffs also filed a motion to conditionally certify this action as a class action, claiming there are an additional 70 individuals similarly situated to plaintiffs. Plaintiffs seek damages in the amount of unpaid overtime over a three-year period and liquidated damages in the same amount. In March 2014, the federal court granted plaintiffs’ motion to conditionally certify the action as a class action. Notice was given to all potential class members and an additional 44 individuals opted in to the class, bringing the plaintiff class to 80 current and former employees. Two plaintiffs have since dismissed their claims without prejudice, leaving 78 plaintiffs. In February 2016, PSO filed a motion for summary judgment. In April 2016, by opinion and order, the court granted PSO’s motion for summary judgment and dismissed the case. Management does not believe a loss is probable. If there is an unfavorable outcome contrary to expectations, management estimates possible losses of up to $30 million . Gavin Landfill Litigation (Applies to AEP and OPCo) In August 2014, a complaint was filed in the Mason County, West Virginia Circuit Court against AEP, AEPSC, OPCo and an individual supervisor alleging wrongful death and personal injury/illness claims arising out of purported exposure to coal combustion by-product waste at the Gavin Plant landfill. As a result of OPCo transferring its generation assets to AGR, the outcome of this complaint will be the responsibility of AGR. The lawsuit was filed on behalf of 77 plaintiffs, consisting of 39 current and former contractors of the landfill and 38 family members of those contractors. Eleven of the family members are pursuing personal injury/illness claims and the remainder are pursuing loss of consortium claims. The plaintiffs seek compensatory and punitive damages, as well as medical monitoring. In September 2014, management filed a motion to dismiss the complaint, contending the case should be filed in Ohio. In August 2015, the court denied the motion. Management appealed that decision to the West Virginia Supreme Court. In February 2016, a decision was issued by the court denying the appeal and remanding the case to the West Virginia Mass Litigation Panel, which typically handles multi-plaintiff cases, rather than back to the Mason County, West Virginia Circuit Court. Defendants’ petition for rehearing was denied by the West Virginia Supreme Court. Management will continue to defend against the claims. Management is unable to determine a range of potential losses that are reasonably possible of occurring. |
Appalachian Power Co [Member] | |
Commitments, Guarantees and Contingencies | COMMITMENTS, GUARANTEES AND CONTINGENCIES The disclosures in this note apply to all Registrants unless indicated otherwise. The Registrants are subject to certain claims and legal actions arising in the ordinary course of business. In addition, the Registrants’ business activities are subject to extensive governmental regulation related to public health and the environment. The ultimate outcome of such pending or potential litigation against the Registrants cannot be predicted. Management accrues contingent liabilities only when management concludes that it is both probable that a liability has been incurred at the date of the financial statements and the amount of loss can be reasonably estimated. When management determines that it is not probable, but rather reasonably possible that a liability has been incurred at the date of the financial statements, management discloses such contingencies and the possible loss or range of loss if such estimate can be made. Any estimated range is based on currently available information and involves elements of judgment and significant uncertainties. Any estimated range of possible loss may not represent the maximum possible loss exposure. Circumstances change over time and actual results may vary significantly from estimates. For current proceedings not specifically discussed below, management does not anticipate that the liabilities, if any, arising from such proceedings would have a material effect on the financial statements. The Commitments, Guarantees and Contingencies note within the 2015 Annual Report should be read in conjunction with this report. GUARANTEES Liabilities for guarantees are recorded in accordance with the accounting guidance for “Guarantees.” There is no collateral held in relation to any guarantees unless specified below. In the event any guarantee is drawn, there is no recourse to third parties unless specified below. Letters of Credit (Applies to AEP, APCo, I&M and OPCo) Standby letters of credit are entered into with third parties. These letters of credit are issued in the ordinary course of business and cover items such as natural gas and electricity risk management contracts, construction contracts, insurance programs, security deposits and debt service reserves. AEP has two revolving credit facilities totaling $3.5 billion , under which up to $1.2 billion may be issued as letters of credit on behalf of subsidiaries. As of March 31, 2016 , AEP’s maximum future payments for letters of credit issued under the revolving credit facilities were $2 million with maturities ranging from October 2016 to December 2016. An uncommitted facility gives the issuer of the facility the right to accept or decline each request made under the facility. AEP also issues letters of credit on behalf of subsidiaries under three uncommitted facilities totaling $225 million . As of March 31, 2016 , the Registrants’ maximum future payments for letters of credit issued under the uncommitted facilities were as follows: Company Amount Maturity (in millions) AEP $ 190.2 June 2016 to March 2017 OPCo 4.2 September 2016 The Registrants have $351 million of variable rate Pollution Control Bonds supported by $355 million of bilateral letters of credit as follows: Company Pollution Control Bonds Bilateral Letters of Credit Maturity of Bilateral Letters of Credit (in millions) AEP $ 351.4 $ 355.4 June 2016 to July 2017 APCo 104.4 105.6 March 2017 I&M 77.0 77.9 March 2017 Guarantees of Third-Party Obligations (Applies to AEP and SWEPCo) As part of the process to receive a renewal of a Texas Railroad Commission permit for lignite mining, SWEPCo provides guarantees of mine reclamation of $115 million . Since SWEPCo uses self-bonding, the guarantee provides for SWEPCo to commit to use its resources to complete the reclamation in the event the work is not completed by Sabine. This guarantee ends upon depletion of reserves and completion of final reclamation. Based on the latest study completed in 2010, it is estimated the reserves will be depleted in 2036 with final reclamation completed by 2046 at an estimated cost of $58 million . Actual reclamation costs could vary due to period inflation and any changes to actual mine reclamation. As of March 31, 2016 , SWEPCo has collected $67 million through a rider for final mine closure and reclamation costs, of which $15 million is recorded in Deferred Credits and Other Noncurrent Liabilities and $52 million is recorded in Asset Retirement Obligations on SWEPCo’s condensed balance sheet. Sabine charges SWEPCo, its only customer, all of its costs. SWEPCo passes these costs to customers through its fuel clause. Indemnifications and Other Guarantees Contracts The Registrants enter into certain types of contracts which require indemnifications. Typically these contracts include, but are not limited to, sale agreements, lease agreements, purchase agreements and financing agreements. Generally, these agreements may include, but are not limited to, indemnifications around certain tax, contractual and environmental matters. With respect to sale agreements, exposure generally does not exceed the sale price. As of March 31, 2016 , there were no material liabilities recorded for any indemnifications. APCo, I&M and OPCo are jointly and severally liable for activity conducted by AEPSC on behalf of AEP companies related to power purchase and sale activity. PSO and SWEPCo are jointly and severally liable for activity conducted by AEPSC on behalf of PSO and SWEPCo related to power purchase and sale activity. Master Lease Agreements The Registrants lease certain equipment under master lease agreements. Under the lease agreements, the lessor is guaranteed a residual value up to a stated percentage of either the unamortized balance or the equipment cost at the end of the lease term. If the actual fair value of the leased equipment is below the guaranteed residual value at the end of the lease term, the Registrants are committed to pay the difference between the actual fair value and the residual value guarantee. Historically, at the end of the lease term the fair value has been in excess of the unamortized balance. As of March 31, 2016 , the maximum potential loss by Registrants for these lease agreements assuming the fair value of the equipment is zero at the end of the lease term is as follows: Company Maximum Potential Loss (in millions) AEP $ 33.6 APCo 4.9 I&M 3.0 OPCo 5.3 PSO 2.8 SWEPCo 3.1 Railcar Lease (Applies to AEP, I&M and SWEPCo) In June 2003, AEP Transportation LLC (AEP Transportation), a subsidiary of AEP, entered into an agreement with BTM Capital Corporation, as lessor, to lease 875 coal-transporting aluminum railcars. The lease is accounted for as an operating lease. In January 2008, AEP Transportation assigned the remaining 848 railcars under the original lease agreement to I&M ( 390 railcars) and SWEPCo ( 458 railcars). The assignments are accounted for as operating leases for I&M and SWEPCo. The initial lease term was five years with three consecutive five-year renewal periods for a maximum lease term of twenty years. I&M and SWEPCo intend to renew these leases for the full lease term of twenty years via the renewal options. The future minimum lease obligations are $9 million and $11 million for I&M and SWEPCo, respectively, for the remaining railcars as of March 31, 2016 . Under the lease agreement, the lessor is guaranteed that the sale proceeds under a return-and-sale option will equal at least a lessee obligation amount specified in the lease, which declines from 83% of the projected fair value of the equipment under the current five year lease term to 77% at the end of the 20 -year term. I&M and SWEPCo have assumed the guarantee under the return-and-sale option. The maximum potential losses related to the guarantee are $9 million and $10 million for I&M and SWEPCo, respectively, as of March 31, 2016 , assuming the fair value of the equipment is zero at the end of the current five -year lease term. However, management believes that the fair value would produce a sufficient sales price to avoid any loss. AEPRO Boat and Barge Leases (Applies to AEP) In October 2015, AEP signed a Purchase and Sale Agreement to sell its commercial barge transportation subsidiary, AEPRO, to a nonaffiliated party. The sale closed in November 2015. See “AEPRO (Corporate and Other)” section of Note 6 . Certain of the boat and barge leases acquired by the nonaffiliated party are subject to an AEP guarantee in favor of the lessor, ensuring future payments under such leases with maturities up to 2027. As of March 31, 2016 , the maximum potential amount of future payments required under the guaranteed leases was $93 million . In certain instances, AEP has no recourse against the nonaffiliated party if required to pay a lessor under a guarantee, but AEP would have access to sell the leased assets in order to recover payments made by AEP under the guarantee. As of March 31, 2016 , AEP’s boat and barge lease guarantee liability was $15 million . ENVIRONMENTAL CONTINGENCIES The Comprehensive Environmental Response Compensation and Liability Act (Superfund) and State Remediation By-products from the generation of electricity include materials such as ash, slag, sludge, low-level radioactive waste and SNF. Coal combustion by-products, which constitute the overwhelming percentage of these materials, are typically treated and deposited in captive disposal facilities or are beneficially utilized. In addition, the generation plants and transmission and distribution facilities have used asbestos, polychlorinated biphenyls and other hazardous and nonhazardous materials. The Registrants currently incur costs to dispose of these substances safely. In 2008, I&M received a letter from the Michigan Department of Environmental Quality (MDEQ) concerning conditions at a site under state law and requesting I&M take voluntary action necessary to prevent and/or mitigate public harm. I&M started remediation work in accordance with a plan approved by MDEQ. In 2014, I&M recorded an accrual for remediation at certain additional sites in Michigan. As a result of receiving approval of completed remediation work from the MDEQ in March 2015, I&M’s accrual was reduced. As of March 31, 2016 , I&M’s accrual for all of these sites is $8 million . As the remediation work is completed, I&M’s cost may change as new information becomes available concerning either the level of contamination at the sites or changes in the scope of remediation. Management cannot predict the amount of additional cost, if any. NUCLEAR CONTINGENCIES (APPLIES TO AEP AND I&M) I&M owns and operates the two-unit 2,191 MW Cook Plant under licenses granted by the Nuclear Regulatory Commission (NRC). I&M has a significant future financial commitment to dispose of SNF and to safely decommission and decontaminate the plant. The licenses to operate the two nuclear units at the Cook Plant expire in 2034 and 2037. The operation of a nuclear facility also involves special risks, potential liabilities and specific regulatory and safety requirements. By agreement, I&M is partially liable, together with all other electric utility companies that own nuclear generation units, for a nuclear power plant incident at any nuclear plant in the U.S. Should a nuclear incident occur at any nuclear power plant in the U.S., the resultant liability could be substantial. OPERATIONAL CONTINGENCIES Rockport Plant Litigation (Applies to AEP and I&M) In July 2013, the Wilmington Trust Company filed a complaint in U.S. District Court for the Southern District of New York against AEGCo and I&M alleging that it will be unlawfully burdened by the terms of the modified NSR consent decree after the Rockport Plant, Unit 2 lease expiration in December 2022. The terms of the consent decree allow the installation of environmental emission control equipment, repowering or retirement of the unit. The plaintiff further alleges that the defendants’ actions constitute breach of the lease and participation agreement. The plaintiff seeks a judgment declaring that the defendants breached the lease, must satisfy obligations related to installation of emission control equipment and indemnify the plaintiff. The New York court granted a motion to transfer this case to the U.S. District Court for the Southern District of Ohio. In October 2013, a motion to dismiss the case was filed on behalf of AEGCo and I&M. In January 2015, the court issued an opinion and order granting the motion in part and denying the motion in part. The court dismissed certain of the plaintiff’s claims. Several claims remained, including the claim for breach of the participation agreement and a claim alleging breach of an implied covenant of good faith and fair dealing. In June 2015, AEGCo and I&M filed a motion for partial judgment on the claims seeking dismissal of the breach of participation agreement claim as well as any claim for indemnification of costs associated with this case. The plaintiff subsequently filed an amended complaint to add another claim under the lease and also filed a motion for partial summary judgment. In November 2015, AEGCo and I&M filed a motion to strike the plaintiff’s motion for partial judgment and filed a motion to dismiss the case for failure to state a claim. In March 2016, the court entered an opinion and order in favor of AEGCo and I&M, dismissing certain of the plaintiffs’ claims for breach of contract and dismissing claims for breach of implied covenant of good faith and fair dealing, and further dismissing plaintiffs’ claim for indemnification of costs. By the same order, the court permitted plaintiffs to move forward with their claim that AEGCo and I&M failed to exercise prudent utility practices in the maintenance and operation of Rockport Plant, Unit 2. In April 2016, the plaintiffs filed a notice of voluntary dismissal of the other remaining claims with prejudice and the court subsequently entered a final judgment. Management is unable to determine a range of potential losses that are reasonably possible of occurring. Natural Gas Markets Lawsuits (Applies to AEP) In 2002, the Lieutenant Governor of California filed a lawsuit in Los Angeles County California Superior Court against numerous energy companies, including AEP, alleging violations of California law through alleged fraudulent reporting of false natural gas price and volume information with an intent to affect the market price of natural gas and electricity. AEP was dismissed from the case. A number of similar cases were also filed in California and in state and federal courts in several states making essentially the same allegations under federal or state laws against the same companies. AEP (or a subsidiary) is among the companies named as defendants in some of these cases. AEP settled, received summary judgment or was dismissed from all of these cases. The plaintiffs appealed the Nevada federal district court’s dismissal of several cases involving AEP companies to the U.S. Court of Appeals for the Ninth Circuit. In April 2013, the appellate court reversed in part, and affirmed in part, the district court’s orders in these cases. The appellate court reversed the district court’s holding that the state antitrust claims were preempted by the Natural Gas Act and the order dismissing AEP from two of the cases on personal jurisdiction grounds and affirmed the decision denying leave to the plaintiffs to amend their complaints in two of the cases. Defendants in these cases, including AEP, filed a petition seeking further review with the U.S. Supreme Court on the preemption issue. AEP also subsequently filed a separate petition with the U.S. Supreme Court seeking review of the personal jurisdiction issue. In July 2014, the U.S. Supreme Court granted the defendants’ previously filed petition for further review with the U.S. Supreme Court on the preemption issue. Oral argument occurred in January 2015. In April 2015, the U.S. Supreme Court affirmed the judgment of the U.S. Court of Appeals for the Ninth Circuit on the preemption issue, holding that the plaintiffs’ state antitrust claims were not preempted by the Natural Gas Act. The U.S. Supreme Court denied AEP’s petition for review of the personal jurisdiction issue shortly thereafter. The cases were remanded to the district court for further proceedings. There are four pending cases, of which three are class actions and one is a single plaintiff case. A tentative settlement has been reached in the three class actions. This settlement, once finalized, will be subject to court approval. Management will continue to defend the remaining case. Management is unable to determine the amount of potential additional loss that is reasonably possible of occurring. Wage and Hours Lawsuit (Applies to AEP and PSO) In August 2013, PSO received an amended complaint filed in the U.S. District Court for the Northern District of Oklahoma by 36 current and former line and warehouse employees alleging that they were denied overtime pay in violation of the Fair Labor Standards Act. Plaintiffs claim that they are entitled to overtime pay for “on call” time. They allege that restrictions placed on them during on call hours are burdensome enough that they are entitled to compensation for these hours as hours worked. Plaintiffs also filed a motion to conditionally certify this action as a class action, claiming there are an additional 70 individuals similarly situated to plaintiffs. Plaintiffs seek damages in the amount of unpaid overtime over a three-year period and liquidated damages in the same amount. In March 2014, the federal court granted plaintiffs’ motion to conditionally certify the action as a class action. Notice was given to all potential class members and an additional 44 individuals opted in to the class, bringing the plaintiff class to 80 current and former employees. Two plaintiffs have since dismissed their claims without prejudice, leaving 78 plaintiffs. In February 2016, PSO filed a motion for summary judgment. In April 2016, by opinion and order, the court granted PSO’s motion for summary judgment and dismissed the case. Management does not believe a loss is probable. If there is an unfavorable outcome contrary to expectations, management estimates possible losses of up to $30 million . Gavin Landfill Litigation (Applies to AEP and OPCo) In August 2014, a complaint was filed in the Mason County, West Virginia Circuit Court against AEP, AEPSC, OPCo and an individual supervisor alleging wrongful death and personal injury/illness claims arising out of purported exposure to coal combustion by-product waste at the Gavin Plant landfill. As a result of OPCo transferring its generation assets to AGR, the outcome of this complaint will be the responsibility of AGR. The lawsuit was filed on behalf of 77 plaintiffs, consisting of 39 current and former contractors of the landfill and 38 family members of those contractors. Eleven of the family members are pursuing personal injury/illness claims and the remainder are pursuing loss of consortium claims. The plaintiffs seek compensatory and punitive damages, as well as medical monitoring. In September 2014, management filed a motion to dismiss the complaint, contending the case should be filed in Ohio. In August 2015, the court denied the motion. Management appealed that decision to the West Virginia Supreme Court. In February 2016, a decision was issued by the court denying the appeal and remanding the case to the West Virginia Mass Litigation Panel, which typically handles multi-plaintiff cases, rather than back to the Mason County, West Virginia Circuit Court. Defendants’ petition for rehearing was denied by the West Virginia Supreme Court. Management will continue to defend against the claims. Management is unable to determine a range of potential losses that are reasonably possible of occurring. |
Indiana Michigan Power Co [Member] | |
Commitments, Guarantees and Contingencies | COMMITMENTS, GUARANTEES AND CONTINGENCIES The disclosures in this note apply to all Registrants unless indicated otherwise. The Registrants are subject to certain claims and legal actions arising in the ordinary course of business. In addition, the Registrants’ business activities are subject to extensive governmental regulation related to public health and the environment. The ultimate outcome of such pending or potential litigation against the Registrants cannot be predicted. Management accrues contingent liabilities only when management concludes that it is both probable that a liability has been incurred at the date of the financial statements and the amount of loss can be reasonably estimated. When management determines that it is not probable, but rather reasonably possible that a liability has been incurred at the date of the financial statements, management discloses such contingencies and the possible loss or range of loss if such estimate can be made. Any estimated range is based on currently available information and involves elements of judgment and significant uncertainties. Any estimated range of possible loss may not represent the maximum possible loss exposure. Circumstances change over time and actual results may vary significantly from estimates. For current proceedings not specifically discussed below, management does not anticipate that the liabilities, if any, arising from such proceedings would have a material effect on the financial statements. The Commitments, Guarantees and Contingencies note within the 2015 Annual Report should be read in conjunction with this report. GUARANTEES Liabilities for guarantees are recorded in accordance with the accounting guidance for “Guarantees.” There is no collateral held in relation to any guarantees unless specified below. In the event any guarantee is drawn, there is no recourse to third parties unless specified below. Letters of Credit (Applies to AEP, APCo, I&M and OPCo) Standby letters of credit are entered into with third parties. These letters of credit are issued in the ordinary course of business and cover items such as natural gas and electricity risk management contracts, construction contracts, insurance programs, security deposits and debt service reserves. AEP has two revolving credit facilities totaling $3.5 billion , under which up to $1.2 billion may be issued as letters of credit on behalf of subsidiaries. As of March 31, 2016 , AEP’s maximum future payments for letters of credit issued under the revolving credit facilities were $2 million with maturities ranging from October 2016 to December 2016. An uncommitted facility gives the issuer of the facility the right to accept or decline each request made under the facility. AEP also issues letters of credit on behalf of subsidiaries under three uncommitted facilities totaling $225 million . As of March 31, 2016 , the Registrants’ maximum future payments for letters of credit issued under the uncommitted facilities were as follows: Company Amount Maturity (in millions) AEP $ 190.2 June 2016 to March 2017 OPCo 4.2 September 2016 The Registrants have $351 million of variable rate Pollution Control Bonds supported by $355 million of bilateral letters of credit as follows: Company Pollution Control Bonds Bilateral Letters of Credit Maturity of Bilateral Letters of Credit (in millions) AEP $ 351.4 $ 355.4 June 2016 to July 2017 APCo 104.4 105.6 March 2017 I&M 77.0 77.9 March 2017 Guarantees of Third-Party Obligations (Applies to AEP and SWEPCo) As part of the process to receive a renewal of a Texas Railroad Commission permit for lignite mining, SWEPCo provides guarantees of mine reclamation of $115 million . Since SWEPCo uses self-bonding, the guarantee provides for SWEPCo to commit to use its resources to complete the reclamation in the event the work is not completed by Sabine. This guarantee ends upon depletion of reserves and completion of final reclamation. Based on the latest study completed in 2010, it is estimated the reserves will be depleted in 2036 with final reclamation completed by 2046 at an estimated cost of $58 million . Actual reclamation costs could vary due to period inflation and any changes to actual mine reclamation. As of March 31, 2016 , SWEPCo has collected $67 million through a rider for final mine closure and reclamation costs, of which $15 million is recorded in Deferred Credits and Other Noncurrent Liabilities and $52 million is recorded in Asset Retirement Obligations on SWEPCo’s condensed balance sheet. Sabine charges SWEPCo, its only customer, all of its costs. SWEPCo passes these costs to customers through its fuel clause. Indemnifications and Other Guarantees Contracts The Registrants enter into certain types of contracts which require indemnifications. Typically these contracts include, but are not limited to, sale agreements, lease agreements, purchase agreements and financing agreements. Generally, these agreements may include, but are not limited to, indemnifications around certain tax, contractual and environmental matters. With respect to sale agreements, exposure generally does not exceed the sale price. As of March 31, 2016 , there were no material liabilities recorded for any indemnifications. APCo, I&M and OPCo are jointly and severally liable for activity conducted by AEPSC on behalf of AEP companies related to power purchase and sale activity. PSO and SWEPCo are jointly and severally liable for activity conducted by AEPSC on behalf of PSO and SWEPCo related to power purchase and sale activity. Master Lease Agreements The Registrants lease certain equipment under master lease agreements. Under the lease agreements, the lessor is guaranteed a residual value up to a stated percentage of either the unamortized balance or the equipment cost at the end of the lease term. If the actual fair value of the leased equipment is below the guaranteed residual value at the end of the lease term, the Registrants are committed to pay the difference between the actual fair value and the residual value guarantee. Historically, at the end of the lease term the fair value has been in excess of the unamortized balance. As of March 31, 2016 , the maximum potential loss by Registrants for these lease agreements assuming the fair value of the equipment is zero at the end of the lease term is as follows: Company Maximum Potential Loss (in millions) AEP $ 33.6 APCo 4.9 I&M 3.0 OPCo 5.3 PSO 2.8 SWEPCo 3.1 Railcar Lease (Applies to AEP, I&M and SWEPCo) In June 2003, AEP Transportation LLC (AEP Transportation), a subsidiary of AEP, entered into an agreement with BTM Capital Corporation, as lessor, to lease 875 coal-transporting aluminum railcars. The lease is accounted for as an operating lease. In January 2008, AEP Transportation assigned the remaining 848 railcars under the original lease agreement to I&M ( 390 railcars) and SWEPCo ( 458 railcars). The assignments are accounted for as operating leases for I&M and SWEPCo. The initial lease term was five years with three consecutive five-year renewal periods for a maximum lease term of twenty years. I&M and SWEPCo intend to renew these leases for the full lease term of twenty years via the renewal options. The future minimum lease obligations are $9 million and $11 million for I&M and SWEPCo, respectively, for the remaining railcars as of March 31, 2016 . Under the lease agreement, the lessor is guaranteed that the sale proceeds under a return-and-sale option will equal at least a lessee obligation amount specified in the lease, which declines from 83% of the projected fair value of the equipment under the current five year lease term to 77% at the end of the 20 -year term. I&M and SWEPCo have assumed the guarantee under the return-and-sale option. The maximum potential losses related to the guarantee are $9 million and $10 million for I&M and SWEPCo, respectively, as of March 31, 2016 , assuming the fair value of the equipment is zero at the end of the current five -year lease term. However, management believes that the fair value would produce a sufficient sales price to avoid any loss. AEPRO Boat and Barge Leases (Applies to AEP) In October 2015, AEP signed a Purchase and Sale Agreement to sell its commercial barge transportation subsidiary, AEPRO, to a nonaffiliated party. The sale closed in November 2015. See “AEPRO (Corporate and Other)” section of Note 6 . Certain of the boat and barge leases acquired by the nonaffiliated party are subject to an AEP guarantee in favor of the lessor, ensuring future payments under such leases with maturities up to 2027. As of March 31, 2016 , the maximum potential amount of future payments required under the guaranteed leases was $93 million . In certain instances, AEP has no recourse against the nonaffiliated party if required to pay a lessor under a guarantee, but AEP would have access to sell the leased assets in order to recover payments made by AEP under the guarantee. As of March 31, 2016 , AEP’s boat and barge lease guarantee liability was $15 million . ENVIRONMENTAL CONTINGENCIES The Comprehensive Environmental Response Compensation and Liability Act (Superfund) and State Remediation By-products from the generation of electricity include materials such as ash, slag, sludge, low-level radioactive waste and SNF. Coal combustion by-products, which constitute the overwhelming percentage of these materials, are typically treated and deposited in captive disposal facilities or are beneficially utilized. In addition, the generation plants and transmission and distribution facilities have used asbestos, polychlorinated biphenyls and other hazardous and nonhazardous materials. The Registrants currently incur costs to dispose of these substances safely. In 2008, I&M received a letter from the Michigan Department of Environmental Quality (MDEQ) concerning conditions at a site under state law and requesting I&M take voluntary action necessary to prevent and/or mitigate public harm. I&M started remediation work in accordance with a plan approved by MDEQ. In 2014, I&M recorded an accrual for remediation at certain additional sites in Michigan. As a result of receiving approval of completed remediation work from the MDEQ in March 2015, I&M’s accrual was reduced. As of March 31, 2016 , I&M’s accrual for all of these sites is $8 million . As the remediation work is completed, I&M’s cost may change as new information becomes available concerning either the level of contamination at the sites or changes in the scope of remediation. Management cannot predict the amount of additional cost, if any. NUCLEAR CONTINGENCIES (APPLIES TO AEP AND I&M) I&M owns and operates the two-unit 2,191 MW Cook Plant under licenses granted by the Nuclear Regulatory Commission (NRC). I&M has a significant future financial commitment to dispose of SNF and to safely decommission and decontaminate the plant. The licenses to operate the two nuclear units at the Cook Plant expire in 2034 and 2037. The operation of a nuclear facility also involves special risks, potential liabilities and specific regulatory and safety requirements. By agreement, I&M is partially liable, together with all other electric utility companies that own nuclear generation units, for a nuclear power plant incident at any nuclear plant in the U.S. Should a nuclear incident occur at any nuclear power plant in the U.S., the resultant liability could be substantial. OPERATIONAL CONTINGENCIES Rockport Plant Litigation (Applies to AEP and I&M) In July 2013, the Wilmington Trust Company filed a complaint in U.S. District Court for the Southern District of New York against AEGCo and I&M alleging that it will be unlawfully burdened by the terms of the modified NSR consent decree after the Rockport Plant, Unit 2 lease expiration in December 2022. The terms of the consent decree allow the installation of environmental emission control equipment, repowering or retirement of the unit. The plaintiff further alleges that the defendants’ actions constitute breach of the lease and participation agreement. The plaintiff seeks a judgment declaring that the defendants breached the lease, must satisfy obligations related to installation of emission control equipment and indemnify the plaintiff. The New York court granted a motion to transfer this case to the U.S. District Court for the Southern District of Ohio. In October 2013, a motion to dismiss the case was filed on behalf of AEGCo and I&M. In January 2015, the court issued an opinion and order granting the motion in part and denying the motion in part. The court dismissed certain of the plaintiff’s claims. Several claims remained, including the claim for breach of the participation agreement and a claim alleging breach of an implied covenant of good faith and fair dealing. In June 2015, AEGCo and I&M filed a motion for partial judgment on the claims seeking dismissal of the breach of participation agreement claim as well as any claim for indemnification of costs associated with this case. The plaintiff subsequently filed an amended complaint to add another claim under the lease and also filed a motion for partial summary judgment. In November 2015, AEGCo and I&M filed a motion to strike the plaintiff’s motion for partial judgment and filed a motion to dismiss the case for failure to state a claim. In March 2016, the court entered an opinion and order in favor of AEGCo and I&M, dismissing certain of the plaintiffs’ claims for breach of contract and dismissing claims for breach of implied covenant of good faith and fair dealing, and further dismissing plaintiffs’ claim for indemnification of costs. By the same order, the court permitted plaintiffs to move forward with their claim that AEGCo and I&M failed to exercise prudent utility practices in the maintenance and operation of Rockport Plant, Unit 2. In April 2016, the plaintiffs filed a notice of voluntary dismissal of the other remaining claims with prejudice and the court subsequently entered a final judgment. Management is unable to determine a range of potential losses that are reasonably possible of occurring. Natural Gas Markets Lawsuits (Applies to AEP) In 2002, the Lieutenant Governor of California filed a lawsuit in Los Angeles County California Superior Court against numerous energy companies, including AEP, alleging violations of California law through alleged fraudulent reporting of false natural gas price and volume information with an intent to affect the market price of natural gas and electricity. AEP was dismissed from the case. A number of similar cases were also filed in California and in state and federal courts in several states making essentially the same allegations under federal or state laws against the same companies. AEP (or a subsidiary) is among the companies named as defendants in some of these cases. AEP settled, received summary judgment or was dismissed from all of these cases. The plaintiffs appealed the Nevada federal district court’s dismissal of several cases involving AEP companies to the U.S. Court of Appeals for the Ninth Circuit. In April 2013, the appellate court reversed in part, and affirmed in part, the district court’s orders in these cases. The appellate court reversed the district court’s holding that the state antitrust claims were preempted by the Natural Gas Act and the order dismissing AEP from two of the cases on personal jurisdiction grounds and affirmed the decision denying leave to the plaintiffs to amend their complaints in two of the cases. Defendants in these cases, including AEP, filed a petition seeking further review with the U.S. Supreme Court on the preemption issue. AEP also subsequently filed a separate petition with the U.S. Supreme Court seeking review of the personal jurisdiction issue. In July 2014, the U.S. Supreme Court granted the defendants’ previously filed petition for further review with the U.S. Supreme Court on the preemption issue. Oral argument occurred in January 2015. In April 2015, the U.S. Supreme Court affirmed the judgment of the U.S. Court of Appeals for the Ninth Circuit on the preemption issue, holding that the plaintiffs’ state antitrust claims were not preempted by the Natural Gas Act. The U.S. Supreme Court denied AEP’s petition for review of the personal jurisdiction issue shortly thereafter. The cases were remanded to the district court for further proceedings. There are four pending cases, of which three are class actions and one is a single plaintiff case. A tentative settlement has been reached in the three class actions. This settlement, once finalized, will be subject to court approval. Management will continue to defend the remaining case. Management is unable to determine the amount of potential additional loss that is reasonably possible of occurring. Wage and Hours Lawsuit (Applies to AEP and PSO) In August 2013, PSO received an amended complaint filed in the U.S. District Court for the Northern District of Oklahoma by 36 current and former line and warehouse employees alleging that they were denied overtime pay in violation of the Fair Labor Standards Act. Plaintiffs claim that they are entitled to overtime pay for “on call” time. They allege that restrictions placed on them during on call hours are burdensome enough that they are entitled to compensation for these hours as hours worked. Plaintiffs also filed a motion to conditionally certify this action as a class action, claiming there are an additional 70 individuals similarly situated to plaintiffs. Plaintiffs seek damages in the amount of unpaid overtime over a three-year period and liquidated damages in the same amount. In March 2014, the federal court granted plaintiffs’ motion to conditionally certify the action as a class action. Notice was given to all potential class members and an additional 44 individuals opted in to the class, bringing the plaintiff class to 80 current and former employees. Two plaintiffs have since dismissed their claims without prejudice, leaving 78 plaintiffs. In February 2016, PSO filed a motion for summary judgment. In April 2016, by opinion and order, the court granted PSO’s motion for summary judgment and dismissed the case. Management does not believe a loss is probable. If there is an unfavorable outcome contrary to expectations, management estimates possible losses of up to $30 million . Gavin Landfill Litigation (Applies to AEP and OPCo) In August 2014, a complaint was filed in the Mason County, West Virginia Circuit Court against AEP, AEPSC, OPCo and an individual supervisor alleging wrongful death and personal injury/illness claims arising out of purported exposure to coal combustion by-product waste at the Gavin Plant landfill. As a result of OPCo transferring its generation assets to AGR, the outcome of this complaint will be the responsibility of AGR. The lawsuit was filed on behalf of 77 plaintiffs, consisting of 39 current and former contractors of the landfill and 38 family members of those contractors. Eleven of the family members are pursuing personal injury/illness claims and the remainder are pursuing loss of consortium claims. The plaintiffs seek compensatory and punitive damages, as well as medical monitoring. In September 2014, management filed a motion to dismiss the complaint, contending the case should be filed in Ohio. In August 2015, the court denied the motion. Management appealed that decision to the West Virginia Supreme Court. In February 2016, a decision was issued by the court denying the appeal and remanding the case to the West Virginia Mass Litigation Panel, which typically handles multi-plaintiff cases, rather than back to the Mason County, West Virginia Circuit Court. Defendants’ petition for rehearing was denied by the West Virginia Supreme Court. Management will continue to defend against the claims. Management is unable to determine a range of potential losses that are reasonably possible of occurring. |
Ohio Power Co [Member] | |
Commitments, Guarantees and Contingencies | COMMITMENTS, GUARANTEES AND CONTINGENCIES The disclosures in this note apply to all Registrants unless indicated otherwise. The Registrants are subject to certain claims and legal actions arising in the ordinary course of business. In addition, the Registrants’ business activities are subject to extensive governmental regulation related to public health and the environment. The ultimate outcome of such pending or potential litigation against the Registrants cannot be predicted. Management accrues contingent liabilities only when management concludes that it is both probable that a liability has been incurred at the date of the financial statements and the amount of loss can be reasonably estimated. When management determines that it is not probable, but rather reasonably possible that a liability has been incurred at the date of the financial statements, management discloses such contingencies and the possible loss or range of loss if such estimate can be made. Any estimated range is based on currently available information and involves elements of judgment and significant uncertainties. Any estimated range of possible loss may not represent the maximum possible loss exposure. Circumstances change over time and actual results may vary significantly from estimates. For current proceedings not specifically discussed below, management does not anticipate that the liabilities, if any, arising from such proceedings would have a material effect on the financial statements. The Commitments, Guarantees and Contingencies note within the 2015 Annual Report should be read in conjunction with this report. GUARANTEES Liabilities for guarantees are recorded in accordance with the accounting guidance for “Guarantees.” There is no collateral held in relation to any guarantees unless specified below. In the event any guarantee is drawn, there is no recourse to third parties unless specified below. Letters of Credit (Applies to AEP, APCo, I&M and OPCo) Standby letters of credit are entered into with third parties. These letters of credit are issued in the ordinary course of business and cover items such as natural gas and electricity risk management contracts, construction contracts, insurance programs, security deposits and debt service reserves. AEP has two revolving credit facilities totaling $3.5 billion , under which up to $1.2 billion may be issued as letters of credit on behalf of subsidiaries. As of March 31, 2016 , AEP’s maximum future payments for letters of credit issued under the revolving credit facilities were $2 million with maturities ranging from October 2016 to December 2016. An uncommitted facility gives the issuer of the facility the right to accept or decline each request made under the facility. AEP also issues letters of credit on behalf of subsidiaries under three uncommitted facilities totaling $225 million . As of March 31, 2016 , the Registrants’ maximum future payments for letters of credit issued under the uncommitted facilities were as follows: Company Amount Maturity (in millions) AEP $ 190.2 June 2016 to March 2017 OPCo 4.2 September 2016 The Registrants have $351 million of variable rate Pollution Control Bonds supported by $355 million of bilateral letters of credit as follows: Company Pollution Control Bonds Bilateral Letters of Credit Maturity of Bilateral Letters of Credit (in millions) AEP $ 351.4 $ 355.4 June 2016 to July 2017 APCo 104.4 105.6 March 2017 I&M 77.0 77.9 March 2017 Guarantees of Third-Party Obligations (Applies to AEP and SWEPCo) As part of the process to receive a renewal of a Texas Railroad Commission permit for lignite mining, SWEPCo provides guarantees of mine reclamation of $115 million . Since SWEPCo uses self-bonding, the guarantee provides for SWEPCo to commit to use its resources to complete the reclamation in the event the work is not completed by Sabine. This guarantee ends upon depletion of reserves and completion of final reclamation. Based on the latest study completed in 2010, it is estimated the reserves will be depleted in 2036 with final reclamation completed by 2046 at an estimated cost of $58 million . Actual reclamation costs could vary due to period inflation and any changes to actual mine reclamation. As of March 31, 2016 , SWEPCo has collected $67 million through a rider for final mine closure and reclamation costs, of which $15 million is recorded in Deferred Credits and Other Noncurrent Liabilities and $52 million is recorded in Asset Retirement Obligations on SWEPCo’s condensed balance sheet. Sabine charges SWEPCo, its only customer, all of its costs. SWEPCo passes these costs to customers through its fuel clause. Indemnifications and Other Guarantees Contracts The Registrants enter into certain types of contracts which require indemnifications. Typically these contracts include, but are not limited to, sale agreements, lease agreements, purchase agreements and financing agreements. Generally, these agreements may include, but are not limited to, indemnifications around certain tax, contractual and environmental matters. With respect to sale agreements, exposure generally does not exceed the sale price. As of March 31, 2016 , there were no material liabilities recorded for any indemnifications. APCo, I&M and OPCo are jointly and severally liable for activity conducted by AEPSC on behalf of AEP companies related to power purchase and sale activity. PSO and SWEPCo are jointly and severally liable for activity conducted by AEPSC on behalf of PSO and SWEPCo related to power purchase and sale activity. Master Lease Agreements The Registrants lease certain equipment under master lease agreements. Under the lease agreements, the lessor is guaranteed a residual value up to a stated percentage of either the unamortized balance or the equipment cost at the end of the lease term. If the actual fair value of the leased equipment is below the guaranteed residual value at the end of the lease term, the Registrants are committed to pay the difference between the actual fair value and the residual value guarantee. Historically, at the end of the lease term the fair value has been in excess of the unamortized balance. As of March 31, 2016 , the maximum potential loss by Registrants for these lease agreements assuming the fair value of the equipment is zero at the end of the lease term is as follows: Company Maximum Potential Loss (in millions) AEP $ 33.6 APCo 4.9 I&M 3.0 OPCo 5.3 PSO 2.8 SWEPCo 3.1 Railcar Lease (Applies to AEP, I&M and SWEPCo) In June 2003, AEP Transportation LLC (AEP Transportation), a subsidiary of AEP, entered into an agreement with BTM Capital Corporation, as lessor, to lease 875 coal-transporting aluminum railcars. The lease is accounted for as an operating lease. In January 2008, AEP Transportation assigned the remaining 848 railcars under the original lease agreement to I&M ( 390 railcars) and SWEPCo ( 458 railcars). The assignments are accounted for as operating leases for I&M and SWEPCo. The initial lease term was five years with three consecutive five-year renewal periods for a maximum lease term of twenty years. I&M and SWEPCo intend to renew these leases for the full lease term of twenty years via the renewal options. The future minimum lease obligations are $9 million and $11 million for I&M and SWEPCo, respectively, for the remaining railcars as of March 31, 2016 . Under the lease agreement, the lessor is guaranteed that the sale proceeds under a return-and-sale option will equal at least a lessee obligation amount specified in the lease, which declines from 83% of the projected fair value of the equipment under the current five year lease term to 77% at the end of the 20 -year term. I&M and SWEPCo have assumed the guarantee under the return-and-sale option. The maximum potential losses related to the guarantee are $9 million and $10 million for I&M and SWEPCo, respectively, as of March 31, 2016 , assuming the fair value of the equipment is zero at the end of the current five -year lease term. However, management believes that the fair value would produce a sufficient sales price to avoid any loss. AEPRO Boat and Barge Leases (Applies to AEP) In October 2015, AEP signed a Purchase and Sale Agreement to sell its commercial barge transportation subsidiary, AEPRO, to a nonaffiliated party. The sale closed in November 2015. See “AEPRO (Corporate and Other)” section of Note 6 . Certain of the boat and barge leases acquired by the nonaffiliated party are subject to an AEP guarantee in favor of the lessor, ensuring future payments under such leases with maturities up to 2027. As of March 31, 2016 , the maximum potential amount of future payments required under the guaranteed leases was $93 million . In certain instances, AEP has no recourse against the nonaffiliated party if required to pay a lessor under a guarantee, but AEP would have access to sell the leased assets in order to recover payments made by AEP under the guarantee. As of March 31, 2016 , AEP’s boat and barge lease guarantee liability was $15 million . ENVIRONMENTAL CONTINGENCIES The Comprehensive Environmental Response Compensation and Liability Act (Superfund) and State Remediation By-products from the generation of electricity include materials such as ash, slag, sludge, low-level radioactive waste and SNF. Coal combustion by-products, which constitute the overwhelming percentage of these materials, are typically treated and deposited in captive disposal facilities or are beneficially utilized. In addition, the generation plants and transmission and distribution facilities have used asbestos, polychlorinated biphenyls and other hazardous and nonhazardous materials. The Registrants currently incur costs to dispose of these substances safely. In 2008, I&M received a letter from the Michigan Department of Environmental Quality (MDEQ) concerning conditions at a site under state law and requesting I&M take voluntary action necessary to prevent and/or mitigate public harm. I&M started remediation work in accordance with a plan approved by MDEQ. In 2014, I&M recorded an accrual for remediation at certain additional sites in Michigan. As a result of receiving approval of completed remediation work from the MDEQ in March 2015, I&M’s accrual was reduced. As of March 31, 2016 , I&M’s accrual for all of these sites is $8 million . As the remediation work is completed, I&M’s cost may change as new information becomes available concerning either the level of contamination at the sites or changes in the scope of remediation. Management cannot predict the amount of additional cost, if any. NUCLEAR CONTINGENCIES (APPLIES TO AEP AND I&M) I&M owns and operates the two-unit 2,191 MW Cook Plant under licenses granted by the Nuclear Regulatory Commission (NRC). I&M has a significant future financial commitment to dispose of SNF and to safely decommission and decontaminate the plant. The licenses to operate the two nuclear units at the Cook Plant expire in 2034 and 2037. The operation of a nuclear facility also involves special risks, potential liabilities and specific regulatory and safety requirements. By agreement, I&M is partially liable, together with all other electric utility companies that own nuclear generation units, for a nuclear power plant incident at any nuclear plant in the U.S. Should a nuclear incident occur at any nuclear power plant in the U.S., the resultant liability could be substantial. OPERATIONAL CONTINGENCIES Rockport Plant Litigation (Applies to AEP and I&M) In July 2013, the Wilmington Trust Company filed a complaint in U.S. District Court for the Southern District of New York against AEGCo and I&M alleging that it will be unlawfully burdened by the terms of the modified NSR consent decree after the Rockport Plant, Unit 2 lease expiration in December 2022. The terms of the consent decree allow the installation of environmental emission control equipment, repowering or retirement of the unit. The plaintiff further alleges that the defendants’ actions constitute breach of the lease and participation agreement. The plaintiff seeks a judgment declaring that the defendants breached the lease, must satisfy obligations related to installation of emission control equipment and indemnify the plaintiff. The New York court granted a motion to transfer this case to the U.S. District Court for the Southern District of Ohio. In October 2013, a motion to dismiss the case was filed on behalf of AEGCo and I&M. In January 2015, the court issued an opinion and order granting the motion in part and denying the motion in part. The court dismissed certain of the plaintiff’s claims. Several claims remained, including the claim for breach of the participation agreement and a claim alleging breach of an implied covenant of good faith and fair dealing. In June 2015, AEGCo and I&M filed a motion for partial judgment on the claims seeking dismissal of the breach of participation agreement claim as well as any claim for indemnification of costs associated with this case. The plaintiff subsequently filed an amended complaint to add another claim under the lease and also filed a motion for partial summary judgment. In November 2015, AEGCo and I&M filed a motion to strike the plaintiff’s motion for partial judgment and filed a motion to dismiss the case for failure to state a claim. In March 2016, the court entered an opinion and order in favor of AEGCo and I&M, dismissing certain of the plaintiffs’ claims for breach of contract and dismissing claims for breach of implied covenant of good faith and fair dealing, and further dismissing plaintiffs’ claim for indemnification of costs. By the same order, the court permitted plaintiffs to move forward with their claim that AEGCo and I&M failed to exercise prudent utility practices in the maintenance and operation of Rockport Plant, Unit 2. In April 2016, the plaintiffs filed a notice of voluntary dismissal of the other remaining claims with prejudice and the court subsequently entered a final judgment. Management is unable to determine a range of potential losses that are reasonably possible of occurring. Natural Gas Markets Lawsuits (Applies to AEP) In 2002, the Lieutenant Governor of California filed a lawsuit in Los Angeles County California Superior Court against numerous energy companies, including AEP, alleging violations of California law through alleged fraudulent reporting of false natural gas price and volume information with an intent to affect the market price of natural gas and electricity. AEP was dismissed from the case. A number of similar cases were also filed in California and in state and federal courts in several states making essentially the same allegations under federal or state laws against the same companies. AEP (or a subsidiary) is among the companies named as defendants in some of these cases. AEP settled, received summary judgment or was dismissed from all of these cases. The plaintiffs appealed the Nevada federal district court’s dismissal of several cases involving AEP companies to the U.S. Court of Appeals for the Ninth Circuit. In April 2013, the appellate court reversed in part, and affirmed in part, the district court’s orders in these cases. The appellate court reversed the district court’s holding that the state antitrust claims were preempted by the Natural Gas Act and the order dismissing AEP from two of the cases on personal jurisdiction grounds and affirmed the decision denying leave to the plaintiffs to amend their complaints in two of the cases. Defendants in these cases, including AEP, filed a petition seeking further review with the U.S. Supreme Court on the preemption issue. AEP also subsequently filed a separate petition with the U.S. Supreme Court seeking review of the personal jurisdiction issue. In July 2014, the U.S. Supreme Court granted the defendants’ previously filed petition for further review with the U.S. Supreme Court on the preemption issue. Oral argument occurred in January 2015. In April 2015, the U.S. Supreme Court affirmed the judgment of the U.S. Court of Appeals for the Ninth Circuit on the preemption issue, holding that the plaintiffs’ state antitrust claims were not preempted by the Natural Gas Act. The U.S. Supreme Court denied AEP’s petition for review of the personal jurisdiction issue shortly thereafter. The cases were remanded to the district court for further proceedings. There are four pending cases, of which three are class actions and one is a single plaintiff case. A tentative settlement has been reached in the three class actions. This settlement, once finalized, will be subject to court approval. Management will continue to defend the remaining case. Management is unable to determine the amount of potential additional loss that is reasonably possible of occurring. Wage and Hours Lawsuit (Applies to AEP and PSO) In August 2013, PSO received an amended complaint filed in the U.S. District Court for the Northern District of Oklahoma by 36 current and former line and warehouse employees alleging that they were denied overtime pay in violation of the Fair Labor Standards Act. Plaintiffs claim that they are entitled to overtime pay for “on call” time. They allege that restrictions placed on them during on call hours are burdensome enough that they are entitled to compensation for these hours as hours worked. Plaintiffs also filed a motion to conditionally certify this action as a class action, claiming there are an additional 70 individuals similarly situated to plaintiffs. Plaintiffs seek damages in the amount of unpaid overtime over a three-year period and liquidated damages in the same amount. In March 2014, the federal court granted plaintiffs’ motion to conditionally certify the action as a class action. Notice was given to all potential class members and an additional 44 individuals opted in to the class, bringing the plaintiff class to 80 current and former employees. Two plaintiffs have since dismissed their claims without prejudice, leaving 78 plaintiffs. In February 2016, PSO filed a motion for summary judgment. In April 2016, by opinion and order, the court granted PSO’s motion for summary judgment and dismissed the case. Management does not believe a loss is probable. If there is an unfavorable outcome contrary to expectations, management estimates possible losses of up to $30 million . Gavin Landfill Litigation (Applies to AEP and OPCo) In August 2014, a complaint was filed in the Mason County, West Virginia Circuit Court against AEP, AEPSC, OPCo and an individual supervisor alleging wrongful death and personal injury/illness claims arising out of purported exposure to coal combustion by-product waste at the Gavin Plant landfill. As a result of OPCo transferring its generation assets to AGR, the outcome of this complaint will be the responsibility of AGR. The lawsuit was filed on behalf of 77 plaintiffs, consisting of 39 current and former contractors of the landfill and 38 family members of those contractors. Eleven of the family members are pursuing personal injury/illness claims and the remainder are pursuing loss of consortium claims. The plaintiffs seek compensatory and punitive damages, as well as medical monitoring. In September 2014, management filed a motion to dismiss the complaint, contending the case should be filed in Ohio. In August 2015, the court denied the motion. Management appealed that decision to the West Virginia Supreme Court. In February 2016, a decision was issued by the court denying the appeal and remanding the case to the West Virginia Mass Litigation Panel, which typically handles multi-plaintiff cases, rather than back to the Mason County, West Virginia Circuit Court. Defendants’ petition for rehearing was denied by the West Virginia Supreme Court. Management will continue to defend against the claims. Management is unable to determine a range of potential losses that are reasonably possible of occurring. |
Public Service Co Of Oklahoma [Member] | |
Commitments, Guarantees and Contingencies | COMMITMENTS, GUARANTEES AND CONTINGENCIES The disclosures in this note apply to all Registrants unless indicated otherwise. The Registrants are subject to certain claims and legal actions arising in the ordinary course of business. In addition, the Registrants’ business activities are subject to extensive governmental regulation related to public health and the environment. The ultimate outcome of such pending or potential litigation against the Registrants cannot be predicted. Management accrues contingent liabilities only when management concludes that it is both probable that a liability has been incurred at the date of the financial statements and the amount of loss can be reasonably estimated. When management determines that it is not probable, but rather reasonably possible that a liability has been incurred at the date of the financial statements, management discloses such contingencies and the possible loss or range of loss if such estimate can be made. Any estimated range is based on currently available information and involves elements of judgment and significant uncertainties. Any estimated range of possible loss may not represent the maximum possible loss exposure. Circumstances change over time and actual results may vary significantly from estimates. For current proceedings not specifically discussed below, management does not anticipate that the liabilities, if any, arising from such proceedings would have a material effect on the financial statements. The Commitments, Guarantees and Contingencies note within the 2015 Annual Report should be read in conjunction with this report. GUARANTEES Liabilities for guarantees are recorded in accordance with the accounting guidance for “Guarantees.” There is no collateral held in relation to any guarantees unless specified below. In the event any guarantee is drawn, there is no recourse to third parties unless specified below. Letters of Credit (Applies to AEP, APCo, I&M and OPCo) Standby letters of credit are entered into with third parties. These letters of credit are issued in the ordinary course of business and cover items such as natural gas and electricity risk management contracts, construction contracts, insurance programs, security deposits and debt service reserves. AEP has two revolving credit facilities totaling $3.5 billion , under which up to $1.2 billion may be issued as letters of credit on behalf of subsidiaries. As of March 31, 2016 , AEP’s maximum future payments for letters of credit issued under the revolving credit facilities were $2 million with maturities ranging from October 2016 to December 2016. An uncommitted facility gives the issuer of the facility the right to accept or decline each request made under the facility. AEP also issues letters of credit on behalf of subsidiaries under three uncommitted facilities totaling $225 million . As of March 31, 2016 , the Registrants’ maximum future payments for letters of credit issued under the uncommitted facilities were as follows: Company Amount Maturity (in millions) AEP $ 190.2 June 2016 to March 2017 OPCo 4.2 September 2016 The Registrants have $351 million of variable rate Pollution Control Bonds supported by $355 million of bilateral letters of credit as follows: Company Pollution Control Bonds Bilateral Letters of Credit Maturity of Bilateral Letters of Credit (in millions) AEP $ 351.4 $ 355.4 June 2016 to July 2017 APCo 104.4 105.6 March 2017 I&M 77.0 77.9 March 2017 Guarantees of Third-Party Obligations (Applies to AEP and SWEPCo) As part of the process to receive a renewal of a Texas Railroad Commission permit for lignite mining, SWEPCo provides guarantees of mine reclamation of $115 million . Since SWEPCo uses self-bonding, the guarantee provides for SWEPCo to commit to use its resources to complete the reclamation in the event the work is not completed by Sabine. This guarantee ends upon depletion of reserves and completion of final reclamation. Based on the latest study completed in 2010, it is estimated the reserves will be depleted in 2036 with final reclamation completed by 2046 at an estimated cost of $58 million . Actual reclamation costs could vary due to period inflation and any changes to actual mine reclamation. As of March 31, 2016 , SWEPCo has collected $67 million through a rider for final mine closure and reclamation costs, of which $15 million is recorded in Deferred Credits and Other Noncurrent Liabilities and $52 million is recorded in Asset Retirement Obligations on SWEPCo’s condensed balance sheet. Sabine charges SWEPCo, its only customer, all of its costs. SWEPCo passes these costs to customers through its fuel clause. Indemnifications and Other Guarantees Contracts The Registrants enter into certain types of contracts which require indemnifications. Typically these contracts include, but are not limited to, sale agreements, lease agreements, purchase agreements and financing agreements. Generally, these agreements may include, but are not limited to, indemnifications around certain tax, contractual and environmental matters. With respect to sale agreements, exposure generally does not exceed the sale price. As of March 31, 2016 , there were no material liabilities recorded for any indemnifications. APCo, I&M and OPCo are jointly and severally liable for activity conducted by AEPSC on behalf of AEP companies related to power purchase and sale activity. PSO and SWEPCo are jointly and severally liable for activity conducted by AEPSC on behalf of PSO and SWEPCo related to power purchase and sale activity. Master Lease Agreements The Registrants lease certain equipment under master lease agreements. Under the lease agreements, the lessor is guaranteed a residual value up to a stated percentage of either the unamortized balance or the equipment cost at the end of the lease term. If the actual fair value of the leased equipment is below the guaranteed residual value at the end of the lease term, the Registrants are committed to pay the difference between the actual fair value and the residual value guarantee. Historically, at the end of the lease term the fair value has been in excess of the unamortized balance. As of March 31, 2016 , the maximum potential loss by Registrants for these lease agreements assuming the fair value of the equipment is zero at the end of the lease term is as follows: Company Maximum Potential Loss (in millions) AEP $ 33.6 APCo 4.9 I&M 3.0 OPCo 5.3 PSO 2.8 SWEPCo 3.1 Railcar Lease (Applies to AEP, I&M and SWEPCo) In June 2003, AEP Transportation LLC (AEP Transportation), a subsidiary of AEP, entered into an agreement with BTM Capital Corporation, as lessor, to lease 875 coal-transporting aluminum railcars. The lease is accounted for as an operating lease. In January 2008, AEP Transportation assigned the remaining 848 railcars under the original lease agreement to I&M ( 390 railcars) and SWEPCo ( 458 railcars). The assignments are accounted for as operating leases for I&M and SWEPCo. The initial lease term was five years with three consecutive five-year renewal periods for a maximum lease term of twenty years. I&M and SWEPCo intend to renew these leases for the full lease term of twenty years via the renewal options. The future minimum lease obligations are $9 million and $11 million for I&M and SWEPCo, respectively, for the remaining railcars as of March 31, 2016 . Under the lease agreement, the lessor is guaranteed that the sale proceeds under a return-and-sale option will equal at least a lessee obligation amount specified in the lease, which declines from 83% of the projected fair value of the equipment under the current five year lease term to 77% at the end of the 20 -year term. I&M and SWEPCo have assumed the guarantee under the return-and-sale option. The maximum potential losses related to the guarantee are $9 million and $10 million for I&M and SWEPCo, respectively, as of March 31, 2016 , assuming the fair value of the equipment is zero at the end of the current five -year lease term. However, management believes that the fair value would produce a sufficient sales price to avoid any loss. AEPRO Boat and Barge Leases (Applies to AEP) In October 2015, AEP signed a Purchase and Sale Agreement to sell its commercial barge transportation subsidiary, AEPRO, to a nonaffiliated party. The sale closed in November 2015. See “AEPRO (Corporate and Other)” section of Note 6 . Certain of the boat and barge leases acquired by the nonaffiliated party are subject to an AEP guarantee in favor of the lessor, ensuring future payments under such leases with maturities up to 2027. As of March 31, 2016 , the maximum potential amount of future payments required under the guaranteed leases was $93 million . In certain instances, AEP has no recourse against the nonaffiliated party if required to pay a lessor under a guarantee, but AEP would have access to sell the leased assets in order to recover payments made by AEP under the guarantee. As of March 31, 2016 , AEP’s boat and barge lease guarantee liability was $15 million . ENVIRONMENTAL CONTINGENCIES The Comprehensive Environmental Response Compensation and Liability Act (Superfund) and State Remediation By-products from the generation of electricity include materials such as ash, slag, sludge, low-level radioactive waste and SNF. Coal combustion by-products, which constitute the overwhelming percentage of these materials, are typically treated and deposited in captive disposal facilities or are beneficially utilized. In addition, the generation plants and transmission and distribution facilities have used asbestos, polychlorinated biphenyls and other hazardous and nonhazardous materials. The Registrants currently incur costs to dispose of these substances safely. In 2008, I&M received a letter from the Michigan Department of Environmental Quality (MDEQ) concerning conditions at a site under state law and requesting I&M take voluntary action necessary to prevent and/or mitigate public harm. I&M started remediation work in accordance with a plan approved by MDEQ. In 2014, I&M recorded an accrual for remediation at certain additional sites in Michigan. As a result of receiving approval of completed remediation work from the MDEQ in March 2015, I&M’s accrual was reduced. As of March 31, 2016 , I&M’s accrual for all of these sites is $8 million . As the remediation work is completed, I&M’s cost may change as new information becomes available concerning either the level of contamination at the sites or changes in the scope of remediation. Management cannot predict the amount of additional cost, if any. NUCLEAR CONTINGENCIES (APPLIES TO AEP AND I&M) I&M owns and operates the two-unit 2,191 MW Cook Plant under licenses granted by the Nuclear Regulatory Commission (NRC). I&M has a significant future financial commitment to dispose of SNF and to safely decommission and decontaminate the plant. The licenses to operate the two nuclear units at the Cook Plant expire in 2034 and 2037. The operation of a nuclear facility also involves special risks, potential liabilities and specific regulatory and safety requirements. By agreement, I&M is partially liable, together with all other electric utility companies that own nuclear generation units, for a nuclear power plant incident at any nuclear plant in the U.S. Should a nuclear incident occur at any nuclear power plant in the U.S., the resultant liability could be substantial. OPERATIONAL CONTINGENCIES Rockport Plant Litigation (Applies to AEP and I&M) In July 2013, the Wilmington Trust Company filed a complaint in U.S. District Court for the Southern District of New York against AEGCo and I&M alleging that it will be unlawfully burdened by the terms of the modified NSR consent decree after the Rockport Plant, Unit 2 lease expiration in December 2022. The terms of the consent decree allow the installation of environmental emission control equipment, repowering or retirement of the unit. The plaintiff further alleges that the defendants’ actions constitute breach of the lease and participation agreement. The plaintiff seeks a judgment declaring that the defendants breached the lease, must satisfy obligations related to installation of emission control equipment and indemnify the plaintiff. The New York court granted a motion to transfer this case to the U.S. District Court for the Southern District of Ohio. In October 2013, a motion to dismiss the case was filed on behalf of AEGCo and I&M. In January 2015, the court issued an opinion and order granting the motion in part and denying the motion in part. The court dismissed certain of the plaintiff’s claims. Several claims remained, including the claim for breach of the participation agreement and a claim alleging breach of an implied covenant of good faith and fair dealing. In June 2015, AEGCo and I&M filed a motion for partial judgment on the claims seeking dismissal of the breach of participation agreement claim as well as any claim for indemnification of costs associated with this case. The plaintiff subsequently filed an amended complaint to add another claim under the lease and also filed a motion for partial summary judgment. In November 2015, AEGCo and I&M filed a motion to strike the plaintiff’s motion for partial judgment and filed a motion to dismiss the case for failure to state a claim. In March 2016, the court entered an opinion and order in favor of AEGCo and I&M, dismissing certain of the plaintiffs’ claims for breach of contract and dismissing claims for breach of implied covenant of good faith and fair dealing, and further dismissing plaintiffs’ claim for indemnification of costs. By the same order, the court permitted plaintiffs to move forward with their claim that AEGCo and I&M failed to exercise prudent utility practices in the maintenance and operation of Rockport Plant, Unit 2. In April 2016, the plaintiffs filed a notice of voluntary dismissal of the other remaining claims with prejudice and the court subsequently entered a final judgment. Management is unable to determine a range of potential losses that are reasonably possible of occurring. Natural Gas Markets Lawsuits (Applies to AEP) In 2002, the Lieutenant Governor of California filed a lawsuit in Los Angeles County California Superior Court against numerous energy companies, including AEP, alleging violations of California law through alleged fraudulent reporting of false natural gas price and volume information with an intent to affect the market price of natural gas and electricity. AEP was dismissed from the case. A number of similar cases were also filed in California and in state and federal courts in several states making essentially the same allegations under federal or state laws against the same companies. AEP (or a subsidiary) is among the companies named as defendants in some of these cases. AEP settled, received summary judgment or was dismissed from all of these cases. The plaintiffs appealed the Nevada federal district court’s dismissal of several cases involving AEP companies to the U.S. Court of Appeals for the Ninth Circuit. In April 2013, the appellate court reversed in part, and affirmed in part, the district court’s orders in these cases. The appellate court reversed the district court’s holding that the state antitrust claims were preempted by the Natural Gas Act and the order dismissing AEP from two of the cases on personal jurisdiction grounds and affirmed the decision denying leave to the plaintiffs to amend their complaints in two of the cases. Defendants in these cases, including AEP, filed a petition seeking further review with the U.S. Supreme Court on the preemption issue. AEP also subsequently filed a separate petition with the U.S. Supreme Court seeking review of the personal jurisdiction issue. In July 2014, the U.S. Supreme Court granted the defendants’ previously filed petition for further review with the U.S. Supreme Court on the preemption issue. Oral argument occurred in January 2015. In April 2015, the U.S. Supreme Court affirmed the judgment of the U.S. Court of Appeals for the Ninth Circuit on the preemption issue, holding that the plaintiffs’ state antitrust claims were not preempted by the Natural Gas Act. The U.S. Supreme Court denied AEP’s petition for review of the personal jurisdiction issue shortly thereafter. The cases were remanded to the district court for further proceedings. There are four pending cases, of which three are class actions and one is a single plaintiff case. A tentative settlement has been reached in the three class actions. This settlement, once finalized, will be subject to court approval. Management will continue to defend the remaining case. Management is unable to determine the amount of potential additional loss that is reasonably possible of occurring. Wage and Hours Lawsuit (Applies to AEP and PSO) In August 2013, PSO received an amended complaint filed in the U.S. District Court for the Northern District of Oklahoma by 36 current and former line and warehouse employees alleging that they were denied overtime pay in violation of the Fair Labor Standards Act. Plaintiffs claim that they are entitled to overtime pay for “on call” time. They allege that restrictions placed on them during on call hours are burdensome enough that they are entitled to compensation for these hours as hours worked. Plaintiffs also filed a motion to conditionally certify this action as a class action, claiming there are an additional 70 individuals similarly situated to plaintiffs. Plaintiffs seek damages in the amount of unpaid overtime over a three-year period and liquidated damages in the same amount. In March 2014, the federal court granted plaintiffs’ motion to conditionally certify the action as a class action. Notice was given to all potential class members and an additional 44 individuals opted in to the class, bringing the plaintiff class to 80 current and former employees. Two plaintiffs have since dismissed their claims without prejudice, leaving 78 plaintiffs. In February 2016, PSO filed a motion for summary judgment. In April 2016, by opinion and order, the court granted PSO’s motion for summary judgment and dismissed the case. Management does not believe a loss is probable. If there is an unfavorable outcome contrary to expectations, management estimates possible losses of up to $30 million . Gavin Landfill Litigation (Applies to AEP and OPCo) In August 2014, a complaint was filed in the Mason County, West Virginia Circuit Court against AEP, AEPSC, OPCo and an individual supervisor alleging wrongful death and personal injury/illness claims arising out of purported exposure to coal combustion by-product waste at the Gavin Plant landfill. As a result of OPCo transferring its generation assets to AGR, the outcome of this complaint will be the responsibility of AGR. The lawsuit was filed on behalf of 77 plaintiffs, consisting of 39 current and former contractors of the landfill and 38 family members of those contractors. Eleven of the family members are pursuing personal injury/illness claims and the remainder are pursuing loss of consortium claims. The plaintiffs seek compensatory and punitive damages, as well as medical monitoring. In September 2014, management filed a motion to dismiss the complaint, contending the case should be filed in Ohio. In August 2015, the court denied the motion. Management appealed that decision to the West Virginia Supreme Court. In February 2016, a decision was issued by the court denying the appeal and remanding the case to the West Virginia Mass Litigation Panel, which typically handles multi-plaintiff cases, rather than back to the Mason County, West Virginia Circuit Court. Defendants’ petition for rehearing was denied by the West Virginia Supreme Court. Management will continue to defend against the claims. Management is unable to determine a range of potential losses that are reasonably possible of occurring. |
Southwestern Electric Power Co [Member] | |
Commitments, Guarantees and Contingencies | COMMITMENTS, GUARANTEES AND CONTINGENCIES The disclosures in this note apply to all Registrants unless indicated otherwise. The Registrants are subject to certain claims and legal actions arising in the ordinary course of business. In addition, the Registrants’ business activities are subject to extensive governmental regulation related to public health and the environment. The ultimate outcome of such pending or potential litigation against the Registrants cannot be predicted. Management accrues contingent liabilities only when management concludes that it is both probable that a liability has been incurred at the date of the financial statements and the amount of loss can be reasonably estimated. When management determines that it is not probable, but rather reasonably possible that a liability has been incurred at the date of the financial statements, management discloses such contingencies and the possible loss or range of loss if such estimate can be made. Any estimated range is based on currently available information and involves elements of judgment and significant uncertainties. Any estimated range of possible loss may not represent the maximum possible loss exposure. Circumstances change over time and actual results may vary significantly from estimates. For current proceedings not specifically discussed below, management does not anticipate that the liabilities, if any, arising from such proceedings would have a material effect on the financial statements. The Commitments, Guarantees and Contingencies note within the 2015 Annual Report should be read in conjunction with this report. GUARANTEES Liabilities for guarantees are recorded in accordance with the accounting guidance for “Guarantees.” There is no collateral held in relation to any guarantees unless specified below. In the event any guarantee is drawn, there is no recourse to third parties unless specified below. Letters of Credit (Applies to AEP, APCo, I&M and OPCo) Standby letters of credit are entered into with third parties. These letters of credit are issued in the ordinary course of business and cover items such as natural gas and electricity risk management contracts, construction contracts, insurance programs, security deposits and debt service reserves. AEP has two revolving credit facilities totaling $3.5 billion , under which up to $1.2 billion may be issued as letters of credit on behalf of subsidiaries. As of March 31, 2016 , AEP’s maximum future payments for letters of credit issued under the revolving credit facilities were $2 million with maturities ranging from October 2016 to December 2016. An uncommitted facility gives the issuer of the facility the right to accept or decline each request made under the facility. AEP also issues letters of credit on behalf of subsidiaries under three uncommitted facilities totaling $225 million . As of March 31, 2016 , the Registrants’ maximum future payments for letters of credit issued under the uncommitted facilities were as follows: Company Amount Maturity (in millions) AEP $ 190.2 June 2016 to March 2017 OPCo 4.2 September 2016 The Registrants have $351 million of variable rate Pollution Control Bonds supported by $355 million of bilateral letters of credit as follows: Company Pollution Control Bonds Bilateral Letters of Credit Maturity of Bilateral Letters of Credit (in millions) AEP $ 351.4 $ 355.4 June 2016 to July 2017 APCo 104.4 105.6 March 2017 I&M 77.0 77.9 March 2017 Guarantees of Third-Party Obligations (Applies to AEP and SWEPCo) As part of the process to receive a renewal of a Texas Railroad Commission permit for lignite mining, SWEPCo provides guarantees of mine reclamation of $115 million . Since SWEPCo uses self-bonding, the guarantee provides for SWEPCo to commit to use its resources to complete the reclamation in the event the work is not completed by Sabine. This guarantee ends upon depletion of reserves and completion of final reclamation. Based on the latest study completed in 2010, it is estimated the reserves will be depleted in 2036 with final reclamation completed by 2046 at an estimated cost of $58 million . Actual reclamation costs could vary due to period inflation and any changes to actual mine reclamation. As of March 31, 2016 , SWEPCo has collected $67 million through a rider for final mine closure and reclamation costs, of which $15 million is recorded in Deferred Credits and Other Noncurrent Liabilities and $52 million is recorded in Asset Retirement Obligations on SWEPCo’s condensed balance sheet. Sabine charges SWEPCo, its only customer, all of its costs. SWEPCo passes these costs to customers through its fuel clause. Indemnifications and Other Guarantees Contracts The Registrants enter into certain types of contracts which require indemnifications. Typically these contracts include, but are not limited to, sale agreements, lease agreements, purchase agreements and financing agreements. Generally, these agreements may include, but are not limited to, indemnifications around certain tax, contractual and environmental matters. With respect to sale agreements, exposure generally does not exceed the sale price. As of March 31, 2016 , there were no material liabilities recorded for any indemnifications. APCo, I&M and OPCo are jointly and severally liable for activity conducted by AEPSC on behalf of AEP companies related to power purchase and sale activity. PSO and SWEPCo are jointly and severally liable for activity conducted by AEPSC on behalf of PSO and SWEPCo related to power purchase and sale activity. Master Lease Agreements The Registrants lease certain equipment under master lease agreements. Under the lease agreements, the lessor is guaranteed a residual value up to a stated percentage of either the unamortized balance or the equipment cost at the end of the lease term. If the actual fair value of the leased equipment is below the guaranteed residual value at the end of the lease term, the Registrants are committed to pay the difference between the actual fair value and the residual value guarantee. Historically, at the end of the lease term the fair value has been in excess of the unamortized balance. As of March 31, 2016 , the maximum potential loss by Registrants for these lease agreements assuming the fair value of the equipment is zero at the end of the lease term is as follows: Company Maximum Potential Loss (in millions) AEP $ 33.6 APCo 4.9 I&M 3.0 OPCo 5.3 PSO 2.8 SWEPCo 3.1 Railcar Lease (Applies to AEP, I&M and SWEPCo) In June 2003, AEP Transportation LLC (AEP Transportation), a subsidiary of AEP, entered into an agreement with BTM Capital Corporation, as lessor, to lease 875 coal-transporting aluminum railcars. The lease is accounted for as an operating lease. In January 2008, AEP Transportation assigned the remaining 848 railcars under the original lease agreement to I&M ( 390 railcars) and SWEPCo ( 458 railcars). The assignments are accounted for as operating leases for I&M and SWEPCo. The initial lease term was five years with three consecutive five-year renewal periods for a maximum lease term of twenty years. I&M and SWEPCo intend to renew these leases for the full lease term of twenty years via the renewal options. The future minimum lease obligations are $9 million and $11 million for I&M and SWEPCo, respectively, for the remaining railcars as of March 31, 2016 . Under the lease agreement, the lessor is guaranteed that the sale proceeds under a return-and-sale option will equal at least a lessee obligation amount specified in the lease, which declines from 83% of the projected fair value of the equipment under the current five year lease term to 77% at the end of the 20 -year term. I&M and SWEPCo have assumed the guarantee under the return-and-sale option. The maximum potential losses related to the guarantee are $9 million and $10 million for I&M and SWEPCo, respectively, as of March 31, 2016 , assuming the fair value of the equipment is zero at the end of the current five -year lease term. However, management believes that the fair value would produce a sufficient sales price to avoid any loss. AEPRO Boat and Barge Leases (Applies to AEP) In October 2015, AEP signed a Purchase and Sale Agreement to sell its commercial barge transportation subsidiary, AEPRO, to a nonaffiliated party. The sale closed in November 2015. See “AEPRO (Corporate and Other)” section of Note 6 . Certain of the boat and barge leases acquired by the nonaffiliated party are subject to an AEP guarantee in favor of the lessor, ensuring future payments under such leases with maturities up to 2027. As of March 31, 2016 , the maximum potential amount of future payments required under the guaranteed leases was $93 million . In certain instances, AEP has no recourse against the nonaffiliated party if required to pay a lessor under a guarantee, but AEP would have access to sell the leased assets in order to recover payments made by AEP under the guarantee. As of March 31, 2016 , AEP’s boat and barge lease guarantee liability was $15 million . ENVIRONMENTAL CONTINGENCIES The Comprehensive Environmental Response Compensation and Liability Act (Superfund) and State Remediation By-products from the generation of electricity include materials such as ash, slag, sludge, low-level radioactive waste and SNF. Coal combustion by-products, which constitute the overwhelming percentage of these materials, are typically treated and deposited in captive disposal facilities or are beneficially utilized. In addition, the generation plants and transmission and distribution facilities have used asbestos, polychlorinated biphenyls and other hazardous and nonhazardous materials. The Registrants currently incur costs to dispose of these substances safely. In 2008, I&M received a letter from the Michigan Department of Environmental Quality (MDEQ) concerning conditions at a site under state law and requesting I&M take voluntary action necessary to prevent and/or mitigate public harm. I&M started remediation work in accordance with a plan approved by MDEQ. In 2014, I&M recorded an accrual for remediation at certain additional sites in Michigan. As a result of receiving approval of completed remediation work from the MDEQ in March 2015, I&M’s accrual was reduced. As of March 31, 2016 , I&M’s accrual for all of these sites is $8 million . As the remediation work is completed, I&M’s cost may change as new information becomes available concerning either the level of contamination at the sites or changes in the scope of remediation. Management cannot predict the amount of additional cost, if any. NUCLEAR CONTINGENCIES (APPLIES TO AEP AND I&M) I&M owns and operates the two-unit 2,191 MW Cook Plant under licenses granted by the Nuclear Regulatory Commission (NRC). I&M has a significant future financial commitment to dispose of SNF and to safely decommission and decontaminate the plant. The licenses to operate the two nuclear units at the Cook Plant expire in 2034 and 2037. The operation of a nuclear facility also involves special risks, potential liabilities and specific regulatory and safety requirements. By agreement, I&M is partially liable, together with all other electric utility companies that own nuclear generation units, for a nuclear power plant incident at any nuclear plant in the U.S. Should a nuclear incident occur at any nuclear power plant in the U.S., the resultant liability could be substantial. OPERATIONAL CONTINGENCIES Rockport Plant Litigation (Applies to AEP and I&M) In July 2013, the Wilmington Trust Company filed a complaint in U.S. District Court for the Southern District of New York against AEGCo and I&M alleging that it will be unlawfully burdened by the terms of the modified NSR consent decree after the Rockport Plant, Unit 2 lease expiration in December 2022. The terms of the consent decree allow the installation of environmental emission control equipment, repowering or retirement of the unit. The plaintiff further alleges that the defendants’ actions constitute breach of the lease and participation agreement. The plaintiff seeks a judgment declaring that the defendants breached the lease, must satisfy obligations related to installation of emission control equipment and indemnify the plaintiff. The New York court granted a motion to transfer this case to the U.S. District Court for the Southern District of Ohio. In October 2013, a motion to dismiss the case was filed on behalf of AEGCo and I&M. In January 2015, the court issued an opinion and order granting the motion in part and denying the motion in part. The court dismissed certain of the plaintiff’s claims. Several claims remained, including the claim for breach of the participation agreement and a claim alleging breach of an implied covenant of good faith and fair dealing. In June 2015, AEGCo and I&M filed a motion for partial judgment on the claims seeking dismissal of the breach of participation agreement claim as well as any claim for indemnification of costs associated with this case. The plaintiff subsequently filed an amended complaint to add another claim under the lease and also filed a motion for partial summary judgment. In November 2015, AEGCo and I&M filed a motion to strike the plaintiff’s motion for partial judgment and filed a motion to dismiss the case for failure to state a claim. In March 2016, the court entered an opinion and order in favor of AEGCo and I&M, dismissing certain of the plaintiffs’ claims for breach of contract and dismissing claims for breach of implied covenant of good faith and fair dealing, and further dismissing plaintiffs’ claim for indemnification of costs. By the same order, the court permitted plaintiffs to move forward with their claim that AEGCo and I&M failed to exercise prudent utility practices in the maintenance and operation of Rockport Plant, Unit 2. In April 2016, the plaintiffs filed a notice of voluntary dismissal of the other remaining claims with prejudice and the court subsequently entered a final judgment. Management is unable to determine a range of potential losses that are reasonably possible of occurring. Natural Gas Markets Lawsuits (Applies to AEP) In 2002, the Lieutenant Governor of California filed a lawsuit in Los Angeles County California Superior Court against numerous energy companies, including AEP, alleging violations of California law through alleged fraudulent reporting of false natural gas price and volume information with an intent to affect the market price of natural gas and electricity. AEP was dismissed from the case. A number of similar cases were also filed in California and in state and federal courts in several states making essentially the same allegations under federal or state laws against the same companies. AEP (or a subsidiary) is among the companies named as defendants in some of these cases. AEP settled, received summary judgment or was dismissed from all of these cases. The plaintiffs appealed the Nevada federal district court’s dismissal of several cases involving AEP companies to the U.S. Court of Appeals for the Ninth Circuit. In April 2013, the appellate court reversed in part, and affirmed in part, the district court’s orders in these cases. The appellate court reversed the district court’s holding that the state antitrust claims were preempted by the Natural Gas Act and the order dismissing AEP from two of the cases on personal jurisdiction grounds and affirmed the decision denying leave to the plaintiffs to amend their complaints in two of the cases. Defendants in these cases, including AEP, filed a petition seeking further review with the U.S. Supreme Court on the preemption issue. AEP also subsequently filed a separate petition with the U.S. Supreme Court seeking review of the personal jurisdiction issue. In July 2014, the U.S. Supreme Court granted the defendants’ previously filed petition for further review with the U.S. Supreme Court on the preemption issue. Oral argument occurred in January 2015. In April 2015, the U.S. Supreme Court affirmed the judgment of the U.S. Court of Appeals for the Ninth Circuit on the preemption issue, holding that the plaintiffs’ state antitrust claims were not preempted by the Natural Gas Act. The U.S. Supreme Court denied AEP’s petition for review of the personal jurisdiction issue shortly thereafter. The cases were remanded to the district court for further proceedings. There are four pending cases, of which three are class actions and one is a single plaintiff case. A tentative settlement has been reached in the three class actions. This settlement, once finalized, will be subject to court approval. Management will continue to defend the remaining case. Management is unable to determine the amount of potential additional loss that is reasonably possible of occurring. Wage and Hours Lawsuit (Applies to AEP and PSO) In August 2013, PSO received an amended complaint filed in the U.S. District Court for the Northern District of Oklahoma by 36 current and former line and warehouse employees alleging that they were denied overtime pay in violation of the Fair Labor Standards Act. Plaintiffs claim that they are entitled to overtime pay for “on call” time. They allege that restrictions placed on them during on call hours are burdensome enough that they are entitled to compensation for these hours as hours worked. Plaintiffs also filed a motion to conditionally certify this action as a class action, claiming there are an additional 70 individuals similarly situated to plaintiffs. Plaintiffs seek damages in the amount of unpaid overtime over a three-year period and liquidated damages in the same amount. In March 2014, the federal court granted plaintiffs’ motion to conditionally certify the action as a class action. Notice was given to all potential class members and an additional 44 individuals opted in to the class, bringing the plaintiff class to 80 current and former employees. Two plaintiffs have since dismissed their claims without prejudice, leaving 78 plaintiffs. In February 2016, PSO filed a motion for summary judgment. In April 2016, by opinion and order, the court granted PSO’s motion for summary judgment and dismissed the case. Management does not believe a loss is probable. If there is an unfavorable outcome contrary to expectations, management estimates possible losses of up to $30 million . Gavin Landfill Litigation (Applies to AEP and OPCo) In August 2014, a complaint was filed in the Mason County, West Virginia Circuit Court against AEP, AEPSC, OPCo and an individual supervisor alleging wrongful death and personal injury/illness claims arising out of purported exposure to coal combustion by-product waste at the Gavin Plant landfill. As a result of OPCo transferring its generation assets to AGR, the outcome of this complaint will be the responsibility of AGR. The lawsuit was filed on behalf of 77 plaintiffs, consisting of 39 current and former contractors of the landfill and 38 family members of those contractors. Eleven of the family members are pursuing personal injury/illness claims and the remainder are pursuing loss of consortium claims. The plaintiffs seek compensatory and punitive damages, as well as medical monitoring. In September 2014, management filed a motion to dismiss the complaint, contending the case should be filed in Ohio. In August 2015, the court denied the motion. Management appealed that decision to the West Virginia Supreme Court. In February 2016, a decision was issued by the court denying the appeal and remanding the case to the West Virginia Mass Litigation Panel, which typically handles multi-plaintiff cases, rather than back to the Mason County, West Virginia Circuit Court. Defendants’ petition for rehearing was denied by the West Virginia Supreme Court. Management will continue to defend against the claims. Management is unable to determine a range of potential losses that are reasonably possible of occurring. |
Dispositions
Dispositions | 3 Months Ended |
Mar. 31, 2016 | |
Dispositions | DISPOSITION The disclosures in this note apply to AEP only. 2015 AEPRO (Corporate and Other) In October 2015, AEP signed a Purchase and Sale Agreement to sell its commercial barge transportation subsidiary, AEPRO, to a nonaffiliated party. The sale closed in November 2015. The nonaffiliated party acquired AEPRO by purchasing all of the common stock of AEP Resources, Inc., the parent company of AEPRO. The nonaffiliated party assumed certain assets and liabilities of AEPRO, excluding the equity method investment in International Marine Terminals, LLC, pension and benefit assets and liabilities and debt obligations. Prior to the closing of the sale, AEP retired the debt obligations of AEPRO. AEP retained ownership of its captive barge fleet that delivers coal to the company’s regulated coal-fueled power plant units owned or leased by AEGCo, APCo, I&M, KPCo and WPCo. AEP signed a contract with the nonaffiliated party to dispatch and schedule its captive barge fleet for the company’s regulated coal-fueled power plant units. AEP also has a separate contract with the nonaffiliated party to barge coal for AGR. These agreements with the nonaffiliated party extend through the end of 2016. Results of operations of AEPRO have been classified as discontinued operations on AEP’s statements of income for the three months ended March 31, 2015 , as shown in the following table: Three Months Ended March 31, 2015 (in millions) Other Revenues $ 127.7 Other Operation Expense 85.0 Maintenance Expense 8.3 Depreciation and Amortization Expense 9.1 Taxes Other Than Income Taxes 4.0 Total Expenses 106.4 Other Income (Expense) (4.4 ) Pretax Income of Discontinued Operations 16.9 Income Tax Expense 6.3 Equity Earnings of Unconsolidated Subsidiaries (0.1 ) Total Income on Discontinued Operations as Presented on the Statements of Income $ 10.5 |
Benefit Plans
Benefit Plans | 3 Months Ended |
Mar. 31, 2016 | |
Benefit Plans | BENEFIT PLANS The disclosures in this note apply to all Registrants unless indicated otherwise. AEP sponsors a qualified pension plan and two unfunded nonqualified pension plans. Substantially all AEP employees are covered by the qualified plan or both the qualified and a nonqualified pension plan. AEP also sponsors OPEB plans to provide health and life insurance benefits for retired employees. Components of Net Periodic Benefit Cost The following tables provide the components of net periodic benefit cost (credit) by Registrant for the plans for the three months ended March 31, 2016 and 2015 : AEP Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 21.4 $ 23.3 $ 2.6 $ 3.1 Interest Cost 52.9 51.3 15.2 14.2 Expected Return on Plan Assets (70.1 ) (68.7 ) (26.8 ) (27.8 ) Amortization of Prior Service Cost (Credit) 0.6 0.6 (17.3 ) (17.3 ) Amortization of Net Actuarial Loss 21.0 26.8 7.9 4.7 Net Periodic Benefit Cost (Credit) $ 25.8 $ 33.3 $ (18.4 ) $ (23.1 ) APCo Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 2.0 $ 2.2 $ 0.2 $ 0.3 Interest Cost 6.8 6.7 2.7 2.6 Expected Return on Plan Assets (8.8 ) (8.8 ) (4.3 ) (4.6 ) Amortization of Prior Service Credit — — (2.5 ) (2.5 ) Amortization of Net Actuarial Loss 2.7 3.5 1.4 0.9 Net Periodic Benefit Cost (Credit) $ 2.7 $ 3.6 $ (2.5 ) $ (3.3 ) I&M Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 3.0 $ 3.2 $ 0.4 $ 0.4 Interest Cost 6.3 6.1 1.8 1.6 Expected Return on Plan Assets (8.4 ) (8.1 ) (3.2 ) (3.3 ) Amortization of Prior Service Cost (Credit) 0.1 — (2.4 ) (2.4 ) Amortization of Net Actuarial Loss 2.5 3.2 0.9 0.5 Net Periodic Benefit Cost (Credit) $ 3.5 $ 4.4 $ (2.5 ) $ (3.2 ) OPCo Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 1.6 $ 1.7 $ 0.2 $ 0.2 Interest Cost 5.2 5.1 1.7 1.6 Expected Return on Plan Assets (6.9 ) (6.9 ) (3.2 ) (3.4 ) Amortization of Prior Service Credit — — (1.7 ) (1.7 ) Amortization of Net Actuarial Loss 2.0 2.6 0.9 0.5 Net Periodic Benefit Cost (Credit) $ 1.9 $ 2.5 $ (2.1 ) $ (2.8 ) PSO Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 1.5 $ 1.6 $ 0.2 $ 0.2 Interest Cost 2.8 2.7 0.8 0.8 Expected Return on Plan Assets (3.9 ) (3.8 ) (1.5 ) (1.6 ) Amortization of Prior Service Cost (Credit) 0.1 0.1 (1.1 ) (1.1 ) Amortization of Net Actuarial Loss 1.1 1.4 0.4 0.2 Net Periodic Benefit Cost (Credit) $ 1.6 $ 2.0 $ (1.2 ) $ (1.5 ) SWEPCo Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 2.0 $ 2.1 $ 0.2 $ 0.2 Interest Cost 3.1 2.9 0.9 0.8 Expected Return on Plan Assets (4.1 ) (4.0 ) (1.7 ) (1.7 ) Amortization of Prior Service Cost (Credit) 0.1 0.1 (1.3 ) (1.3 ) Amortization of Net Actuarial Loss 1.2 1.5 0.5 0.3 Net Periodic Benefit Cost (Credit) $ 2.3 $ 2.6 $ (1.4 ) $ (1.7 ) |
Appalachian Power Co [Member] | |
Benefit Plans | BENEFIT PLANS The disclosures in this note apply to all Registrants unless indicated otherwise. AEP sponsors a qualified pension plan and two unfunded nonqualified pension plans. Substantially all AEP employees are covered by the qualified plan or both the qualified and a nonqualified pension plan. AEP also sponsors OPEB plans to provide health and life insurance benefits for retired employees. Components of Net Periodic Benefit Cost The following tables provide the components of net periodic benefit cost (credit) by Registrant for the plans for the three months ended March 31, 2016 and 2015 : AEP Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 21.4 $ 23.3 $ 2.6 $ 3.1 Interest Cost 52.9 51.3 15.2 14.2 Expected Return on Plan Assets (70.1 ) (68.7 ) (26.8 ) (27.8 ) Amortization of Prior Service Cost (Credit) 0.6 0.6 (17.3 ) (17.3 ) Amortization of Net Actuarial Loss 21.0 26.8 7.9 4.7 Net Periodic Benefit Cost (Credit) $ 25.8 $ 33.3 $ (18.4 ) $ (23.1 ) APCo Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 2.0 $ 2.2 $ 0.2 $ 0.3 Interest Cost 6.8 6.7 2.7 2.6 Expected Return on Plan Assets (8.8 ) (8.8 ) (4.3 ) (4.6 ) Amortization of Prior Service Credit — — (2.5 ) (2.5 ) Amortization of Net Actuarial Loss 2.7 3.5 1.4 0.9 Net Periodic Benefit Cost (Credit) $ 2.7 $ 3.6 $ (2.5 ) $ (3.3 ) I&M Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 3.0 $ 3.2 $ 0.4 $ 0.4 Interest Cost 6.3 6.1 1.8 1.6 Expected Return on Plan Assets (8.4 ) (8.1 ) (3.2 ) (3.3 ) Amortization of Prior Service Cost (Credit) 0.1 — (2.4 ) (2.4 ) Amortization of Net Actuarial Loss 2.5 3.2 0.9 0.5 Net Periodic Benefit Cost (Credit) $ 3.5 $ 4.4 $ (2.5 ) $ (3.2 ) OPCo Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 1.6 $ 1.7 $ 0.2 $ 0.2 Interest Cost 5.2 5.1 1.7 1.6 Expected Return on Plan Assets (6.9 ) (6.9 ) (3.2 ) (3.4 ) Amortization of Prior Service Credit — — (1.7 ) (1.7 ) Amortization of Net Actuarial Loss 2.0 2.6 0.9 0.5 Net Periodic Benefit Cost (Credit) $ 1.9 $ 2.5 $ (2.1 ) $ (2.8 ) PSO Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 1.5 $ 1.6 $ 0.2 $ 0.2 Interest Cost 2.8 2.7 0.8 0.8 Expected Return on Plan Assets (3.9 ) (3.8 ) (1.5 ) (1.6 ) Amortization of Prior Service Cost (Credit) 0.1 0.1 (1.1 ) (1.1 ) Amortization of Net Actuarial Loss 1.1 1.4 0.4 0.2 Net Periodic Benefit Cost (Credit) $ 1.6 $ 2.0 $ (1.2 ) $ (1.5 ) SWEPCo Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 2.0 $ 2.1 $ 0.2 $ 0.2 Interest Cost 3.1 2.9 0.9 0.8 Expected Return on Plan Assets (4.1 ) (4.0 ) (1.7 ) (1.7 ) Amortization of Prior Service Cost (Credit) 0.1 0.1 (1.3 ) (1.3 ) Amortization of Net Actuarial Loss 1.2 1.5 0.5 0.3 Net Periodic Benefit Cost (Credit) $ 2.3 $ 2.6 $ (1.4 ) $ (1.7 ) |
Indiana Michigan Power Co [Member] | |
Benefit Plans | BENEFIT PLANS The disclosures in this note apply to all Registrants unless indicated otherwise. AEP sponsors a qualified pension plan and two unfunded nonqualified pension plans. Substantially all AEP employees are covered by the qualified plan or both the qualified and a nonqualified pension plan. AEP also sponsors OPEB plans to provide health and life insurance benefits for retired employees. Components of Net Periodic Benefit Cost The following tables provide the components of net periodic benefit cost (credit) by Registrant for the plans for the three months ended March 31, 2016 and 2015 : AEP Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 21.4 $ 23.3 $ 2.6 $ 3.1 Interest Cost 52.9 51.3 15.2 14.2 Expected Return on Plan Assets (70.1 ) (68.7 ) (26.8 ) (27.8 ) Amortization of Prior Service Cost (Credit) 0.6 0.6 (17.3 ) (17.3 ) Amortization of Net Actuarial Loss 21.0 26.8 7.9 4.7 Net Periodic Benefit Cost (Credit) $ 25.8 $ 33.3 $ (18.4 ) $ (23.1 ) APCo Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 2.0 $ 2.2 $ 0.2 $ 0.3 Interest Cost 6.8 6.7 2.7 2.6 Expected Return on Plan Assets (8.8 ) (8.8 ) (4.3 ) (4.6 ) Amortization of Prior Service Credit — — (2.5 ) (2.5 ) Amortization of Net Actuarial Loss 2.7 3.5 1.4 0.9 Net Periodic Benefit Cost (Credit) $ 2.7 $ 3.6 $ (2.5 ) $ (3.3 ) I&M Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 3.0 $ 3.2 $ 0.4 $ 0.4 Interest Cost 6.3 6.1 1.8 1.6 Expected Return on Plan Assets (8.4 ) (8.1 ) (3.2 ) (3.3 ) Amortization of Prior Service Cost (Credit) 0.1 — (2.4 ) (2.4 ) Amortization of Net Actuarial Loss 2.5 3.2 0.9 0.5 Net Periodic Benefit Cost (Credit) $ 3.5 $ 4.4 $ (2.5 ) $ (3.2 ) OPCo Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 1.6 $ 1.7 $ 0.2 $ 0.2 Interest Cost 5.2 5.1 1.7 1.6 Expected Return on Plan Assets (6.9 ) (6.9 ) (3.2 ) (3.4 ) Amortization of Prior Service Credit — — (1.7 ) (1.7 ) Amortization of Net Actuarial Loss 2.0 2.6 0.9 0.5 Net Periodic Benefit Cost (Credit) $ 1.9 $ 2.5 $ (2.1 ) $ (2.8 ) PSO Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 1.5 $ 1.6 $ 0.2 $ 0.2 Interest Cost 2.8 2.7 0.8 0.8 Expected Return on Plan Assets (3.9 ) (3.8 ) (1.5 ) (1.6 ) Amortization of Prior Service Cost (Credit) 0.1 0.1 (1.1 ) (1.1 ) Amortization of Net Actuarial Loss 1.1 1.4 0.4 0.2 Net Periodic Benefit Cost (Credit) $ 1.6 $ 2.0 $ (1.2 ) $ (1.5 ) SWEPCo Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 2.0 $ 2.1 $ 0.2 $ 0.2 Interest Cost 3.1 2.9 0.9 0.8 Expected Return on Plan Assets (4.1 ) (4.0 ) (1.7 ) (1.7 ) Amortization of Prior Service Cost (Credit) 0.1 0.1 (1.3 ) (1.3 ) Amortization of Net Actuarial Loss 1.2 1.5 0.5 0.3 Net Periodic Benefit Cost (Credit) $ 2.3 $ 2.6 $ (1.4 ) $ (1.7 ) |
Ohio Power Co [Member] | |
Benefit Plans | BENEFIT PLANS The disclosures in this note apply to all Registrants unless indicated otherwise. AEP sponsors a qualified pension plan and two unfunded nonqualified pension plans. Substantially all AEP employees are covered by the qualified plan or both the qualified and a nonqualified pension plan. AEP also sponsors OPEB plans to provide health and life insurance benefits for retired employees. Components of Net Periodic Benefit Cost The following tables provide the components of net periodic benefit cost (credit) by Registrant for the plans for the three months ended March 31, 2016 and 2015 : AEP Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 21.4 $ 23.3 $ 2.6 $ 3.1 Interest Cost 52.9 51.3 15.2 14.2 Expected Return on Plan Assets (70.1 ) (68.7 ) (26.8 ) (27.8 ) Amortization of Prior Service Cost (Credit) 0.6 0.6 (17.3 ) (17.3 ) Amortization of Net Actuarial Loss 21.0 26.8 7.9 4.7 Net Periodic Benefit Cost (Credit) $ 25.8 $ 33.3 $ (18.4 ) $ (23.1 ) APCo Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 2.0 $ 2.2 $ 0.2 $ 0.3 Interest Cost 6.8 6.7 2.7 2.6 Expected Return on Plan Assets (8.8 ) (8.8 ) (4.3 ) (4.6 ) Amortization of Prior Service Credit — — (2.5 ) (2.5 ) Amortization of Net Actuarial Loss 2.7 3.5 1.4 0.9 Net Periodic Benefit Cost (Credit) $ 2.7 $ 3.6 $ (2.5 ) $ (3.3 ) I&M Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 3.0 $ 3.2 $ 0.4 $ 0.4 Interest Cost 6.3 6.1 1.8 1.6 Expected Return on Plan Assets (8.4 ) (8.1 ) (3.2 ) (3.3 ) Amortization of Prior Service Cost (Credit) 0.1 — (2.4 ) (2.4 ) Amortization of Net Actuarial Loss 2.5 3.2 0.9 0.5 Net Periodic Benefit Cost (Credit) $ 3.5 $ 4.4 $ (2.5 ) $ (3.2 ) OPCo Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 1.6 $ 1.7 $ 0.2 $ 0.2 Interest Cost 5.2 5.1 1.7 1.6 Expected Return on Plan Assets (6.9 ) (6.9 ) (3.2 ) (3.4 ) Amortization of Prior Service Credit — — (1.7 ) (1.7 ) Amortization of Net Actuarial Loss 2.0 2.6 0.9 0.5 Net Periodic Benefit Cost (Credit) $ 1.9 $ 2.5 $ (2.1 ) $ (2.8 ) PSO Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 1.5 $ 1.6 $ 0.2 $ 0.2 Interest Cost 2.8 2.7 0.8 0.8 Expected Return on Plan Assets (3.9 ) (3.8 ) (1.5 ) (1.6 ) Amortization of Prior Service Cost (Credit) 0.1 0.1 (1.1 ) (1.1 ) Amortization of Net Actuarial Loss 1.1 1.4 0.4 0.2 Net Periodic Benefit Cost (Credit) $ 1.6 $ 2.0 $ (1.2 ) $ (1.5 ) SWEPCo Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 2.0 $ 2.1 $ 0.2 $ 0.2 Interest Cost 3.1 2.9 0.9 0.8 Expected Return on Plan Assets (4.1 ) (4.0 ) (1.7 ) (1.7 ) Amortization of Prior Service Cost (Credit) 0.1 0.1 (1.3 ) (1.3 ) Amortization of Net Actuarial Loss 1.2 1.5 0.5 0.3 Net Periodic Benefit Cost (Credit) $ 2.3 $ 2.6 $ (1.4 ) $ (1.7 ) |
Public Service Co Of Oklahoma [Member] | |
Benefit Plans | BENEFIT PLANS The disclosures in this note apply to all Registrants unless indicated otherwise. AEP sponsors a qualified pension plan and two unfunded nonqualified pension plans. Substantially all AEP employees are covered by the qualified plan or both the qualified and a nonqualified pension plan. AEP also sponsors OPEB plans to provide health and life insurance benefits for retired employees. Components of Net Periodic Benefit Cost The following tables provide the components of net periodic benefit cost (credit) by Registrant for the plans for the three months ended March 31, 2016 and 2015 : AEP Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 21.4 $ 23.3 $ 2.6 $ 3.1 Interest Cost 52.9 51.3 15.2 14.2 Expected Return on Plan Assets (70.1 ) (68.7 ) (26.8 ) (27.8 ) Amortization of Prior Service Cost (Credit) 0.6 0.6 (17.3 ) (17.3 ) Amortization of Net Actuarial Loss 21.0 26.8 7.9 4.7 Net Periodic Benefit Cost (Credit) $ 25.8 $ 33.3 $ (18.4 ) $ (23.1 ) APCo Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 2.0 $ 2.2 $ 0.2 $ 0.3 Interest Cost 6.8 6.7 2.7 2.6 Expected Return on Plan Assets (8.8 ) (8.8 ) (4.3 ) (4.6 ) Amortization of Prior Service Credit — — (2.5 ) (2.5 ) Amortization of Net Actuarial Loss 2.7 3.5 1.4 0.9 Net Periodic Benefit Cost (Credit) $ 2.7 $ 3.6 $ (2.5 ) $ (3.3 ) I&M Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 3.0 $ 3.2 $ 0.4 $ 0.4 Interest Cost 6.3 6.1 1.8 1.6 Expected Return on Plan Assets (8.4 ) (8.1 ) (3.2 ) (3.3 ) Amortization of Prior Service Cost (Credit) 0.1 — (2.4 ) (2.4 ) Amortization of Net Actuarial Loss 2.5 3.2 0.9 0.5 Net Periodic Benefit Cost (Credit) $ 3.5 $ 4.4 $ (2.5 ) $ (3.2 ) OPCo Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 1.6 $ 1.7 $ 0.2 $ 0.2 Interest Cost 5.2 5.1 1.7 1.6 Expected Return on Plan Assets (6.9 ) (6.9 ) (3.2 ) (3.4 ) Amortization of Prior Service Credit — — (1.7 ) (1.7 ) Amortization of Net Actuarial Loss 2.0 2.6 0.9 0.5 Net Periodic Benefit Cost (Credit) $ 1.9 $ 2.5 $ (2.1 ) $ (2.8 ) PSO Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 1.5 $ 1.6 $ 0.2 $ 0.2 Interest Cost 2.8 2.7 0.8 0.8 Expected Return on Plan Assets (3.9 ) (3.8 ) (1.5 ) (1.6 ) Amortization of Prior Service Cost (Credit) 0.1 0.1 (1.1 ) (1.1 ) Amortization of Net Actuarial Loss 1.1 1.4 0.4 0.2 Net Periodic Benefit Cost (Credit) $ 1.6 $ 2.0 $ (1.2 ) $ (1.5 ) SWEPCo Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 2.0 $ 2.1 $ 0.2 $ 0.2 Interest Cost 3.1 2.9 0.9 0.8 Expected Return on Plan Assets (4.1 ) (4.0 ) (1.7 ) (1.7 ) Amortization of Prior Service Cost (Credit) 0.1 0.1 (1.3 ) (1.3 ) Amortization of Net Actuarial Loss 1.2 1.5 0.5 0.3 Net Periodic Benefit Cost (Credit) $ 2.3 $ 2.6 $ (1.4 ) $ (1.7 ) |
Southwestern Electric Power Co [Member] | |
Benefit Plans | BENEFIT PLANS The disclosures in this note apply to all Registrants unless indicated otherwise. AEP sponsors a qualified pension plan and two unfunded nonqualified pension plans. Substantially all AEP employees are covered by the qualified plan or both the qualified and a nonqualified pension plan. AEP also sponsors OPEB plans to provide health and life insurance benefits for retired employees. Components of Net Periodic Benefit Cost The following tables provide the components of net periodic benefit cost (credit) by Registrant for the plans for the three months ended March 31, 2016 and 2015 : AEP Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 21.4 $ 23.3 $ 2.6 $ 3.1 Interest Cost 52.9 51.3 15.2 14.2 Expected Return on Plan Assets (70.1 ) (68.7 ) (26.8 ) (27.8 ) Amortization of Prior Service Cost (Credit) 0.6 0.6 (17.3 ) (17.3 ) Amortization of Net Actuarial Loss 21.0 26.8 7.9 4.7 Net Periodic Benefit Cost (Credit) $ 25.8 $ 33.3 $ (18.4 ) $ (23.1 ) APCo Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 2.0 $ 2.2 $ 0.2 $ 0.3 Interest Cost 6.8 6.7 2.7 2.6 Expected Return on Plan Assets (8.8 ) (8.8 ) (4.3 ) (4.6 ) Amortization of Prior Service Credit — — (2.5 ) (2.5 ) Amortization of Net Actuarial Loss 2.7 3.5 1.4 0.9 Net Periodic Benefit Cost (Credit) $ 2.7 $ 3.6 $ (2.5 ) $ (3.3 ) I&M Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 3.0 $ 3.2 $ 0.4 $ 0.4 Interest Cost 6.3 6.1 1.8 1.6 Expected Return on Plan Assets (8.4 ) (8.1 ) (3.2 ) (3.3 ) Amortization of Prior Service Cost (Credit) 0.1 — (2.4 ) (2.4 ) Amortization of Net Actuarial Loss 2.5 3.2 0.9 0.5 Net Periodic Benefit Cost (Credit) $ 3.5 $ 4.4 $ (2.5 ) $ (3.2 ) OPCo Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 1.6 $ 1.7 $ 0.2 $ 0.2 Interest Cost 5.2 5.1 1.7 1.6 Expected Return on Plan Assets (6.9 ) (6.9 ) (3.2 ) (3.4 ) Amortization of Prior Service Credit — — (1.7 ) (1.7 ) Amortization of Net Actuarial Loss 2.0 2.6 0.9 0.5 Net Periodic Benefit Cost (Credit) $ 1.9 $ 2.5 $ (2.1 ) $ (2.8 ) PSO Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 1.5 $ 1.6 $ 0.2 $ 0.2 Interest Cost 2.8 2.7 0.8 0.8 Expected Return on Plan Assets (3.9 ) (3.8 ) (1.5 ) (1.6 ) Amortization of Prior Service Cost (Credit) 0.1 0.1 (1.1 ) (1.1 ) Amortization of Net Actuarial Loss 1.1 1.4 0.4 0.2 Net Periodic Benefit Cost (Credit) $ 1.6 $ 2.0 $ (1.2 ) $ (1.5 ) SWEPCo Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 2.0 $ 2.1 $ 0.2 $ 0.2 Interest Cost 3.1 2.9 0.9 0.8 Expected Return on Plan Assets (4.1 ) (4.0 ) (1.7 ) (1.7 ) Amortization of Prior Service Cost (Credit) 0.1 0.1 (1.3 ) (1.3 ) Amortization of Net Actuarial Loss 1.2 1.5 0.5 0.3 Net Periodic Benefit Cost (Credit) $ 2.3 $ 2.6 $ (1.4 ) $ (1.7 ) |
Business Segments
Business Segments | 3 Months Ended |
Mar. 31, 2016 | |
Business Segments | BUSINESS SEGMENTS The disclosures in this note apply to all Registrants unless indicated otherwise. AEP’s Reportable Segments AEP’s primary business is the generation, transmission and distribution of electricity. Within its Vertically Integrated Utilities segment, AEP centrally dispatches generation assets and manages its overall utility operations on an integrated basis because of the substantial impact of cost-based rates and regulatory oversight. Intersegment sales and transfers are generally based on underlying contractual arrangements and agreements. AEP’s reportable segments and their related business activities are outlined below: Vertically Integrated Utilities • Generation, transmission and distribution of electricity for sale to retail and wholesale customers through assets owned and operated by AEGCo, APCo, I&M, KGPCo, KPCo, PSO, SWEPCo and WPCo. Transmission and Distribution Utilities • Transmission and distribution of electricity for sale to retail and wholesale customers through assets owned and operated by OPCo, TCC and TNC. • OPCo purchases energy and capacity to serve SSO customers and provides transmission and distribution services for all connected load. AEP Transmission Holdco • Development, construction and operation of transmission facilities through investments in AEP’s wholly-owned transmission-only subsidiaries and transmission-only joint ventures. These investments have PUCT-approved or FERC-approved returns on equity. Generation & Marketing • Nonregulated generation in ERCOT and PJM. • Marketing, risk management and retail activities in ERCOT, PJM, SPP and MISO. The remainder of AEP’s activities is presented as Corporate and Other. While not considered a reportable segment, Corporate and Other primarily includes the purchasing of receivables from certain AEP utility subsidiaries, Parent’s guarantee revenue received from affiliates, investment income, interest income and interest expense and other nonallocated costs. With the sale of AEPRO in November 2015, the activities related to the AEP River Operations segment have been moved to Corporate and Other for the periods presented. See “AEPRO (Corporate and Other)” section of Note 6 for additional information. The tables below present AEP’s reportable segment income statement information for the three months ended March 31, 2016 and 2015 and reportable segment balance sheet information as of March 31, 2016 and December 31, 2015 . These amounts include certain estimates and allocations where necessary. Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Adjustments Consolidated (in millions) Three Months Ended Revenues from: External Customers $ 2,218.1 $ 1,077.3 $ 29.3 $ 713.9 $ 6.3 $ — $ 4,044.9 Other Operating Segments 27.5 19.5 59.3 34.1 18.1 (158.5 ) — Total Revenues $ 2,245.6 $ 1,096.8 $ 88.6 $ 748.0 $ 24.4 $ (158.5 ) $ 4,044.9 Income from Continuing Operations $ 278.7 $ 108.0 $ 44.7 $ 70.7 $ 1.0 $ — $ 503.1 Income from Discontinued Operations, Net of Tax — — — — — — — Net Income $ 278.7 $ 108.0 $ 44.7 $ 70.7 $ 1.0 $ — $ 503.1 Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Adjustments Consolidated (in millions) Three Months Ended Revenues from: External Customers $ 2,487.4 $ 1,206.3 $ 21.7 $ 859.2 $ 5.8 $ — $ 4,580.4 Other Operating Segments 17.7 63.8 36.2 311.3 20.4 (449.4 ) — Total Revenues $ 2,505.1 $ 1,270.1 $ 57.9 $ 1,170.5 $ 26.2 $ (449.4 ) $ 4,580.4 Income (Loss) from Continuing Operations $ 300.3 $ 97.2 $ 36.3 $ 187.4 $ (1.0 ) $ — $ 620.2 Income from Discontinued Operations, Net of Tax — — — — 10.5 — 10.5 Net Income $ 300.3 $ 97.2 $ 36.3 $ 187.4 $ 9.5 $ — $ 630.7 Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Consolidated (in millions) March 31, 2016 Total Property, Plant and Equipment $ 40,599.7 $ 14,029.4 $ 4,230.5 $ 7,510.9 $ 357.3 $ (297.6 ) (b) $ 66,430.2 Accumulated Depreciation and Amortization 12,485.3 3,573.5 63.9 3,409.8 180.8 (116.0 ) (b) 19,597.3 Total Property Plant and Equipment - Net $ 28,114.4 $ 10,455.9 $ 4,166.6 $ 4,101.1 $ 176.5 $ (181.6 ) (b) $ 46,832.9 Total Assets $ 36,197.0 $ 14,341.3 $ 5,152.7 $ 5,400.2 $ 21,962.1 $ (20,566.8 ) (b) (c) $ 62,486.5 Long-term Debt Due Within One Year: Affiliated $ — $ — $ — $ — $ — $ — $ — Non-Affiliated 1,174.3 786.3 — 71.7 1.0 — 2,033.3 Long-term Debt: Affiliated 20.0 — — 32.2 — (52.2 ) — Non-Affiliated 9,948.1 4,665.6 1,654.1 635.3 846.2 — 17,749.3 Total Long-term Debt $ 11,142.4 $ 5,451.9 $ 1,654.1 $ 739.2 $ 847.2 $ (52.2 ) $ 19,782.6 Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Consolidated (in millions) December 31, 2015 Total Property, Plant and Equipment $ 40,130.3 $ 13,840.5 $ 3,977.6 $ 7,461.3 $ 350.9 $ (279.2 ) (b) $ 65,481.4 Accumulated Depreciation and Amortization 12,335.0 3,529.2 52.3 3,367.0 176.9 (112.2 ) (b) 19,348.2 Total Property Plant and Equipment - Net $ 27,795.3 $ 10,311.3 $ 3,925.3 $ 4,094.3 $ 174.0 $ (167.0 ) (b) $ 46,133.2 Total Assets $ 35,792.3 $ 14,640.2 $ 5,012.1 $ 5,414.5 $ 21,907.4 $ (21,083.4 ) (b) (c) $ 61,683.1 Long-term Debt Due Within One Year: Affiliated $ — $ — $ — $ — $ — $ — $ — Non-Affiliated 935.4 824.7 — 71.6 0.1 — 1,831.8 Long-term Debt: Affiliated 20.0 — — 32.2 — (52.2 ) — Non-Affiliated 9,833.0 4,776.8 1,648.4 639.5 843.2 — 17,740.9 Total Long-term Debt $ 10,788.4 $ 5,601.5 $ 1,648.4 $ 743.3 $ 843.3 $ (52.2 ) $ 19,572.7 (a) Corporate and Other primarily includes the purchasing of receivables from certain AEP utility subsidiaries. This segment also includes Parent’s guarantee revenue received from affiliates, investment income, interest income, interest expense and discontinued operations of AEPRO and other nonallocated costs. (b) Includes eliminations due to an intercompany capital lease. (c) Reconciling Adjustments for Total Assets primarily include the elimination of intercompany advances to affiliates and intercompany accounts receivable along with the elimination of AEP’s investments in subsidiary companies. Registrant Subsidiaries’ Reportable Segments The Registrant Subsidiaries each have one reportable segment, an integrated electricity generation, transmission and distribution business, except OPCo, an electricity transmission and distribution business. The Registrant Subsidiaries’ other activities are insignificant. The Registrant Subsidiaries’ operations are managed on an integrated basis because of the substantial impact of cost-based rates and regulatory oversight on the business process, cost structures and operating results. |
Appalachian Power Co [Member] | |
Business Segments | BUSINESS SEGMENTS The disclosures in this note apply to all Registrants unless indicated otherwise. AEP’s Reportable Segments AEP’s primary business is the generation, transmission and distribution of electricity. Within its Vertically Integrated Utilities segment, AEP centrally dispatches generation assets and manages its overall utility operations on an integrated basis because of the substantial impact of cost-based rates and regulatory oversight. Intersegment sales and transfers are generally based on underlying contractual arrangements and agreements. AEP’s reportable segments and their related business activities are outlined below: Vertically Integrated Utilities • Generation, transmission and distribution of electricity for sale to retail and wholesale customers through assets owned and operated by AEGCo, APCo, I&M, KGPCo, KPCo, PSO, SWEPCo and WPCo. Transmission and Distribution Utilities • Transmission and distribution of electricity for sale to retail and wholesale customers through assets owned and operated by OPCo, TCC and TNC. • OPCo purchases energy and capacity to serve SSO customers and provides transmission and distribution services for all connected load. AEP Transmission Holdco • Development, construction and operation of transmission facilities through investments in AEP’s wholly-owned transmission-only subsidiaries and transmission-only joint ventures. These investments have PUCT-approved or FERC-approved returns on equity. Generation & Marketing • Nonregulated generation in ERCOT and PJM. • Marketing, risk management and retail activities in ERCOT, PJM, SPP and MISO. The remainder of AEP’s activities is presented as Corporate and Other. While not considered a reportable segment, Corporate and Other primarily includes the purchasing of receivables from certain AEP utility subsidiaries, Parent’s guarantee revenue received from affiliates, investment income, interest income and interest expense and other nonallocated costs. With the sale of AEPRO in November 2015, the activities related to the AEP River Operations segment have been moved to Corporate and Other for the periods presented. See “AEPRO (Corporate and Other)” section of Note 6 for additional information. The tables below present AEP’s reportable segment income statement information for the three months ended March 31, 2016 and 2015 and reportable segment balance sheet information as of March 31, 2016 and December 31, 2015 . These amounts include certain estimates and allocations where necessary. Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Adjustments Consolidated (in millions) Three Months Ended Revenues from: External Customers $ 2,218.1 $ 1,077.3 $ 29.3 $ 713.9 $ 6.3 $ — $ 4,044.9 Other Operating Segments 27.5 19.5 59.3 34.1 18.1 (158.5 ) — Total Revenues $ 2,245.6 $ 1,096.8 $ 88.6 $ 748.0 $ 24.4 $ (158.5 ) $ 4,044.9 Income from Continuing Operations $ 278.7 $ 108.0 $ 44.7 $ 70.7 $ 1.0 $ — $ 503.1 Income from Discontinued Operations, Net of Tax — — — — — — — Net Income $ 278.7 $ 108.0 $ 44.7 $ 70.7 $ 1.0 $ — $ 503.1 Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Adjustments Consolidated (in millions) Three Months Ended Revenues from: External Customers $ 2,487.4 $ 1,206.3 $ 21.7 $ 859.2 $ 5.8 $ — $ 4,580.4 Other Operating Segments 17.7 63.8 36.2 311.3 20.4 (449.4 ) — Total Revenues $ 2,505.1 $ 1,270.1 $ 57.9 $ 1,170.5 $ 26.2 $ (449.4 ) $ 4,580.4 Income (Loss) from Continuing Operations $ 300.3 $ 97.2 $ 36.3 $ 187.4 $ (1.0 ) $ — $ 620.2 Income from Discontinued Operations, Net of Tax — — — — 10.5 — 10.5 Net Income $ 300.3 $ 97.2 $ 36.3 $ 187.4 $ 9.5 $ — $ 630.7 Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Consolidated (in millions) March 31, 2016 Total Property, Plant and Equipment $ 40,599.7 $ 14,029.4 $ 4,230.5 $ 7,510.9 $ 357.3 $ (297.6 ) (b) $ 66,430.2 Accumulated Depreciation and Amortization 12,485.3 3,573.5 63.9 3,409.8 180.8 (116.0 ) (b) 19,597.3 Total Property Plant and Equipment - Net $ 28,114.4 $ 10,455.9 $ 4,166.6 $ 4,101.1 $ 176.5 $ (181.6 ) (b) $ 46,832.9 Total Assets $ 36,197.0 $ 14,341.3 $ 5,152.7 $ 5,400.2 $ 21,962.1 $ (20,566.8 ) (b) (c) $ 62,486.5 Long-term Debt Due Within One Year: Affiliated $ — $ — $ — $ — $ — $ — $ — Non-Affiliated 1,174.3 786.3 — 71.7 1.0 — 2,033.3 Long-term Debt: Affiliated 20.0 — — 32.2 — (52.2 ) — Non-Affiliated 9,948.1 4,665.6 1,654.1 635.3 846.2 — 17,749.3 Total Long-term Debt $ 11,142.4 $ 5,451.9 $ 1,654.1 $ 739.2 $ 847.2 $ (52.2 ) $ 19,782.6 Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Consolidated (in millions) December 31, 2015 Total Property, Plant and Equipment $ 40,130.3 $ 13,840.5 $ 3,977.6 $ 7,461.3 $ 350.9 $ (279.2 ) (b) $ 65,481.4 Accumulated Depreciation and Amortization 12,335.0 3,529.2 52.3 3,367.0 176.9 (112.2 ) (b) 19,348.2 Total Property Plant and Equipment - Net $ 27,795.3 $ 10,311.3 $ 3,925.3 $ 4,094.3 $ 174.0 $ (167.0 ) (b) $ 46,133.2 Total Assets $ 35,792.3 $ 14,640.2 $ 5,012.1 $ 5,414.5 $ 21,907.4 $ (21,083.4 ) (b) (c) $ 61,683.1 Long-term Debt Due Within One Year: Affiliated $ — $ — $ — $ — $ — $ — $ — Non-Affiliated 935.4 824.7 — 71.6 0.1 — 1,831.8 Long-term Debt: Affiliated 20.0 — — 32.2 — (52.2 ) — Non-Affiliated 9,833.0 4,776.8 1,648.4 639.5 843.2 — 17,740.9 Total Long-term Debt $ 10,788.4 $ 5,601.5 $ 1,648.4 $ 743.3 $ 843.3 $ (52.2 ) $ 19,572.7 (a) Corporate and Other primarily includes the purchasing of receivables from certain AEP utility subsidiaries. This segment also includes Parent’s guarantee revenue received from affiliates, investment income, interest income, interest expense and discontinued operations of AEPRO and other nonallocated costs. (b) Includes eliminations due to an intercompany capital lease. (c) Reconciling Adjustments for Total Assets primarily include the elimination of intercompany advances to affiliates and intercompany accounts receivable along with the elimination of AEP’s investments in subsidiary companies. Registrant Subsidiaries’ Reportable Segments The Registrant Subsidiaries each have one reportable segment, an integrated electricity generation, transmission and distribution business, except OPCo, an electricity transmission and distribution business. The Registrant Subsidiaries’ other activities are insignificant. The Registrant Subsidiaries’ operations are managed on an integrated basis because of the substantial impact of cost-based rates and regulatory oversight on the business process, cost structures and operating results. |
Indiana Michigan Power Co [Member] | |
Business Segments | BUSINESS SEGMENTS The disclosures in this note apply to all Registrants unless indicated otherwise. AEP’s Reportable Segments AEP’s primary business is the generation, transmission and distribution of electricity. Within its Vertically Integrated Utilities segment, AEP centrally dispatches generation assets and manages its overall utility operations on an integrated basis because of the substantial impact of cost-based rates and regulatory oversight. Intersegment sales and transfers are generally based on underlying contractual arrangements and agreements. AEP’s reportable segments and their related business activities are outlined below: Vertically Integrated Utilities • Generation, transmission and distribution of electricity for sale to retail and wholesale customers through assets owned and operated by AEGCo, APCo, I&M, KGPCo, KPCo, PSO, SWEPCo and WPCo. Transmission and Distribution Utilities • Transmission and distribution of electricity for sale to retail and wholesale customers through assets owned and operated by OPCo, TCC and TNC. • OPCo purchases energy and capacity to serve SSO customers and provides transmission and distribution services for all connected load. AEP Transmission Holdco • Development, construction and operation of transmission facilities through investments in AEP’s wholly-owned transmission-only subsidiaries and transmission-only joint ventures. These investments have PUCT-approved or FERC-approved returns on equity. Generation & Marketing • Nonregulated generation in ERCOT and PJM. • Marketing, risk management and retail activities in ERCOT, PJM, SPP and MISO. The remainder of AEP’s activities is presented as Corporate and Other. While not considered a reportable segment, Corporate and Other primarily includes the purchasing of receivables from certain AEP utility subsidiaries, Parent’s guarantee revenue received from affiliates, investment income, interest income and interest expense and other nonallocated costs. With the sale of AEPRO in November 2015, the activities related to the AEP River Operations segment have been moved to Corporate and Other for the periods presented. See “AEPRO (Corporate and Other)” section of Note 6 for additional information. The tables below present AEP’s reportable segment income statement information for the three months ended March 31, 2016 and 2015 and reportable segment balance sheet information as of March 31, 2016 and December 31, 2015 . These amounts include certain estimates and allocations where necessary. Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Adjustments Consolidated (in millions) Three Months Ended Revenues from: External Customers $ 2,218.1 $ 1,077.3 $ 29.3 $ 713.9 $ 6.3 $ — $ 4,044.9 Other Operating Segments 27.5 19.5 59.3 34.1 18.1 (158.5 ) — Total Revenues $ 2,245.6 $ 1,096.8 $ 88.6 $ 748.0 $ 24.4 $ (158.5 ) $ 4,044.9 Income from Continuing Operations $ 278.7 $ 108.0 $ 44.7 $ 70.7 $ 1.0 $ — $ 503.1 Income from Discontinued Operations, Net of Tax — — — — — — — Net Income $ 278.7 $ 108.0 $ 44.7 $ 70.7 $ 1.0 $ — $ 503.1 Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Adjustments Consolidated (in millions) Three Months Ended Revenues from: External Customers $ 2,487.4 $ 1,206.3 $ 21.7 $ 859.2 $ 5.8 $ — $ 4,580.4 Other Operating Segments 17.7 63.8 36.2 311.3 20.4 (449.4 ) — Total Revenues $ 2,505.1 $ 1,270.1 $ 57.9 $ 1,170.5 $ 26.2 $ (449.4 ) $ 4,580.4 Income (Loss) from Continuing Operations $ 300.3 $ 97.2 $ 36.3 $ 187.4 $ (1.0 ) $ — $ 620.2 Income from Discontinued Operations, Net of Tax — — — — 10.5 — 10.5 Net Income $ 300.3 $ 97.2 $ 36.3 $ 187.4 $ 9.5 $ — $ 630.7 Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Consolidated (in millions) March 31, 2016 Total Property, Plant and Equipment $ 40,599.7 $ 14,029.4 $ 4,230.5 $ 7,510.9 $ 357.3 $ (297.6 ) (b) $ 66,430.2 Accumulated Depreciation and Amortization 12,485.3 3,573.5 63.9 3,409.8 180.8 (116.0 ) (b) 19,597.3 Total Property Plant and Equipment - Net $ 28,114.4 $ 10,455.9 $ 4,166.6 $ 4,101.1 $ 176.5 $ (181.6 ) (b) $ 46,832.9 Total Assets $ 36,197.0 $ 14,341.3 $ 5,152.7 $ 5,400.2 $ 21,962.1 $ (20,566.8 ) (b) (c) $ 62,486.5 Long-term Debt Due Within One Year: Affiliated $ — $ — $ — $ — $ — $ — $ — Non-Affiliated 1,174.3 786.3 — 71.7 1.0 — 2,033.3 Long-term Debt: Affiliated 20.0 — — 32.2 — (52.2 ) — Non-Affiliated 9,948.1 4,665.6 1,654.1 635.3 846.2 — 17,749.3 Total Long-term Debt $ 11,142.4 $ 5,451.9 $ 1,654.1 $ 739.2 $ 847.2 $ (52.2 ) $ 19,782.6 Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Consolidated (in millions) December 31, 2015 Total Property, Plant and Equipment $ 40,130.3 $ 13,840.5 $ 3,977.6 $ 7,461.3 $ 350.9 $ (279.2 ) (b) $ 65,481.4 Accumulated Depreciation and Amortization 12,335.0 3,529.2 52.3 3,367.0 176.9 (112.2 ) (b) 19,348.2 Total Property Plant and Equipment - Net $ 27,795.3 $ 10,311.3 $ 3,925.3 $ 4,094.3 $ 174.0 $ (167.0 ) (b) $ 46,133.2 Total Assets $ 35,792.3 $ 14,640.2 $ 5,012.1 $ 5,414.5 $ 21,907.4 $ (21,083.4 ) (b) (c) $ 61,683.1 Long-term Debt Due Within One Year: Affiliated $ — $ — $ — $ — $ — $ — $ — Non-Affiliated 935.4 824.7 — 71.6 0.1 — 1,831.8 Long-term Debt: Affiliated 20.0 — — 32.2 — (52.2 ) — Non-Affiliated 9,833.0 4,776.8 1,648.4 639.5 843.2 — 17,740.9 Total Long-term Debt $ 10,788.4 $ 5,601.5 $ 1,648.4 $ 743.3 $ 843.3 $ (52.2 ) $ 19,572.7 (a) Corporate and Other primarily includes the purchasing of receivables from certain AEP utility subsidiaries. This segment also includes Parent’s guarantee revenue received from affiliates, investment income, interest income, interest expense and discontinued operations of AEPRO and other nonallocated costs. (b) Includes eliminations due to an intercompany capital lease. (c) Reconciling Adjustments for Total Assets primarily include the elimination of intercompany advances to affiliates and intercompany accounts receivable along with the elimination of AEP’s investments in subsidiary companies. Registrant Subsidiaries’ Reportable Segments The Registrant Subsidiaries each have one reportable segment, an integrated electricity generation, transmission and distribution business, except OPCo, an electricity transmission and distribution business. The Registrant Subsidiaries’ other activities are insignificant. The Registrant Subsidiaries’ operations are managed on an integrated basis because of the substantial impact of cost-based rates and regulatory oversight on the business process, cost structures and operating results. |
Ohio Power Co [Member] | |
Business Segments | BUSINESS SEGMENTS The disclosures in this note apply to all Registrants unless indicated otherwise. AEP’s Reportable Segments AEP’s primary business is the generation, transmission and distribution of electricity. Within its Vertically Integrated Utilities segment, AEP centrally dispatches generation assets and manages its overall utility operations on an integrated basis because of the substantial impact of cost-based rates and regulatory oversight. Intersegment sales and transfers are generally based on underlying contractual arrangements and agreements. AEP’s reportable segments and their related business activities are outlined below: Vertically Integrated Utilities • Generation, transmission and distribution of electricity for sale to retail and wholesale customers through assets owned and operated by AEGCo, APCo, I&M, KGPCo, KPCo, PSO, SWEPCo and WPCo. Transmission and Distribution Utilities • Transmission and distribution of electricity for sale to retail and wholesale customers through assets owned and operated by OPCo, TCC and TNC. • OPCo purchases energy and capacity to serve SSO customers and provides transmission and distribution services for all connected load. AEP Transmission Holdco • Development, construction and operation of transmission facilities through investments in AEP’s wholly-owned transmission-only subsidiaries and transmission-only joint ventures. These investments have PUCT-approved or FERC-approved returns on equity. Generation & Marketing • Nonregulated generation in ERCOT and PJM. • Marketing, risk management and retail activities in ERCOT, PJM, SPP and MISO. The remainder of AEP’s activities is presented as Corporate and Other. While not considered a reportable segment, Corporate and Other primarily includes the purchasing of receivables from certain AEP utility subsidiaries, Parent’s guarantee revenue received from affiliates, investment income, interest income and interest expense and other nonallocated costs. With the sale of AEPRO in November 2015, the activities related to the AEP River Operations segment have been moved to Corporate and Other for the periods presented. See “AEPRO (Corporate and Other)” section of Note 6 for additional information. The tables below present AEP’s reportable segment income statement information for the three months ended March 31, 2016 and 2015 and reportable segment balance sheet information as of March 31, 2016 and December 31, 2015 . These amounts include certain estimates and allocations where necessary. Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Adjustments Consolidated (in millions) Three Months Ended Revenues from: External Customers $ 2,218.1 $ 1,077.3 $ 29.3 $ 713.9 $ 6.3 $ — $ 4,044.9 Other Operating Segments 27.5 19.5 59.3 34.1 18.1 (158.5 ) — Total Revenues $ 2,245.6 $ 1,096.8 $ 88.6 $ 748.0 $ 24.4 $ (158.5 ) $ 4,044.9 Income from Continuing Operations $ 278.7 $ 108.0 $ 44.7 $ 70.7 $ 1.0 $ — $ 503.1 Income from Discontinued Operations, Net of Tax — — — — — — — Net Income $ 278.7 $ 108.0 $ 44.7 $ 70.7 $ 1.0 $ — $ 503.1 Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Adjustments Consolidated (in millions) Three Months Ended Revenues from: External Customers $ 2,487.4 $ 1,206.3 $ 21.7 $ 859.2 $ 5.8 $ — $ 4,580.4 Other Operating Segments 17.7 63.8 36.2 311.3 20.4 (449.4 ) — Total Revenues $ 2,505.1 $ 1,270.1 $ 57.9 $ 1,170.5 $ 26.2 $ (449.4 ) $ 4,580.4 Income (Loss) from Continuing Operations $ 300.3 $ 97.2 $ 36.3 $ 187.4 $ (1.0 ) $ — $ 620.2 Income from Discontinued Operations, Net of Tax — — — — 10.5 — 10.5 Net Income $ 300.3 $ 97.2 $ 36.3 $ 187.4 $ 9.5 $ — $ 630.7 Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Consolidated (in millions) March 31, 2016 Total Property, Plant and Equipment $ 40,599.7 $ 14,029.4 $ 4,230.5 $ 7,510.9 $ 357.3 $ (297.6 ) (b) $ 66,430.2 Accumulated Depreciation and Amortization 12,485.3 3,573.5 63.9 3,409.8 180.8 (116.0 ) (b) 19,597.3 Total Property Plant and Equipment - Net $ 28,114.4 $ 10,455.9 $ 4,166.6 $ 4,101.1 $ 176.5 $ (181.6 ) (b) $ 46,832.9 Total Assets $ 36,197.0 $ 14,341.3 $ 5,152.7 $ 5,400.2 $ 21,962.1 $ (20,566.8 ) (b) (c) $ 62,486.5 Long-term Debt Due Within One Year: Affiliated $ — $ — $ — $ — $ — $ — $ — Non-Affiliated 1,174.3 786.3 — 71.7 1.0 — 2,033.3 Long-term Debt: Affiliated 20.0 — — 32.2 — (52.2 ) — Non-Affiliated 9,948.1 4,665.6 1,654.1 635.3 846.2 — 17,749.3 Total Long-term Debt $ 11,142.4 $ 5,451.9 $ 1,654.1 $ 739.2 $ 847.2 $ (52.2 ) $ 19,782.6 Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Consolidated (in millions) December 31, 2015 Total Property, Plant and Equipment $ 40,130.3 $ 13,840.5 $ 3,977.6 $ 7,461.3 $ 350.9 $ (279.2 ) (b) $ 65,481.4 Accumulated Depreciation and Amortization 12,335.0 3,529.2 52.3 3,367.0 176.9 (112.2 ) (b) 19,348.2 Total Property Plant and Equipment - Net $ 27,795.3 $ 10,311.3 $ 3,925.3 $ 4,094.3 $ 174.0 $ (167.0 ) (b) $ 46,133.2 Total Assets $ 35,792.3 $ 14,640.2 $ 5,012.1 $ 5,414.5 $ 21,907.4 $ (21,083.4 ) (b) (c) $ 61,683.1 Long-term Debt Due Within One Year: Affiliated $ — $ — $ — $ — $ — $ — $ — Non-Affiliated 935.4 824.7 — 71.6 0.1 — 1,831.8 Long-term Debt: Affiliated 20.0 — — 32.2 — (52.2 ) — Non-Affiliated 9,833.0 4,776.8 1,648.4 639.5 843.2 — 17,740.9 Total Long-term Debt $ 10,788.4 $ 5,601.5 $ 1,648.4 $ 743.3 $ 843.3 $ (52.2 ) $ 19,572.7 (a) Corporate and Other primarily includes the purchasing of receivables from certain AEP utility subsidiaries. This segment also includes Parent’s guarantee revenue received from affiliates, investment income, interest income, interest expense and discontinued operations of AEPRO and other nonallocated costs. (b) Includes eliminations due to an intercompany capital lease. (c) Reconciling Adjustments for Total Assets primarily include the elimination of intercompany advances to affiliates and intercompany accounts receivable along with the elimination of AEP’s investments in subsidiary companies. Registrant Subsidiaries’ Reportable Segments The Registrant Subsidiaries each have one reportable segment, an integrated electricity generation, transmission and distribution business, except OPCo, an electricity transmission and distribution business. The Registrant Subsidiaries’ other activities are insignificant. The Registrant Subsidiaries’ operations are managed on an integrated basis because of the substantial impact of cost-based rates and regulatory oversight on the business process, cost structures and operating results. |
Public Service Co Of Oklahoma [Member] | |
Business Segments | BUSINESS SEGMENTS The disclosures in this note apply to all Registrants unless indicated otherwise. AEP’s Reportable Segments AEP’s primary business is the generation, transmission and distribution of electricity. Within its Vertically Integrated Utilities segment, AEP centrally dispatches generation assets and manages its overall utility operations on an integrated basis because of the substantial impact of cost-based rates and regulatory oversight. Intersegment sales and transfers are generally based on underlying contractual arrangements and agreements. AEP’s reportable segments and their related business activities are outlined below: Vertically Integrated Utilities • Generation, transmission and distribution of electricity for sale to retail and wholesale customers through assets owned and operated by AEGCo, APCo, I&M, KGPCo, KPCo, PSO, SWEPCo and WPCo. Transmission and Distribution Utilities • Transmission and distribution of electricity for sale to retail and wholesale customers through assets owned and operated by OPCo, TCC and TNC. • OPCo purchases energy and capacity to serve SSO customers and provides transmission and distribution services for all connected load. AEP Transmission Holdco • Development, construction and operation of transmission facilities through investments in AEP’s wholly-owned transmission-only subsidiaries and transmission-only joint ventures. These investments have PUCT-approved or FERC-approved returns on equity. Generation & Marketing • Nonregulated generation in ERCOT and PJM. • Marketing, risk management and retail activities in ERCOT, PJM, SPP and MISO. The remainder of AEP’s activities is presented as Corporate and Other. While not considered a reportable segment, Corporate and Other primarily includes the purchasing of receivables from certain AEP utility subsidiaries, Parent’s guarantee revenue received from affiliates, investment income, interest income and interest expense and other nonallocated costs. With the sale of AEPRO in November 2015, the activities related to the AEP River Operations segment have been moved to Corporate and Other for the periods presented. See “AEPRO (Corporate and Other)” section of Note 6 for additional information. The tables below present AEP’s reportable segment income statement information for the three months ended March 31, 2016 and 2015 and reportable segment balance sheet information as of March 31, 2016 and December 31, 2015 . These amounts include certain estimates and allocations where necessary. Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Adjustments Consolidated (in millions) Three Months Ended Revenues from: External Customers $ 2,218.1 $ 1,077.3 $ 29.3 $ 713.9 $ 6.3 $ — $ 4,044.9 Other Operating Segments 27.5 19.5 59.3 34.1 18.1 (158.5 ) — Total Revenues $ 2,245.6 $ 1,096.8 $ 88.6 $ 748.0 $ 24.4 $ (158.5 ) $ 4,044.9 Income from Continuing Operations $ 278.7 $ 108.0 $ 44.7 $ 70.7 $ 1.0 $ — $ 503.1 Income from Discontinued Operations, Net of Tax — — — — — — — Net Income $ 278.7 $ 108.0 $ 44.7 $ 70.7 $ 1.0 $ — $ 503.1 Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Adjustments Consolidated (in millions) Three Months Ended Revenues from: External Customers $ 2,487.4 $ 1,206.3 $ 21.7 $ 859.2 $ 5.8 $ — $ 4,580.4 Other Operating Segments 17.7 63.8 36.2 311.3 20.4 (449.4 ) — Total Revenues $ 2,505.1 $ 1,270.1 $ 57.9 $ 1,170.5 $ 26.2 $ (449.4 ) $ 4,580.4 Income (Loss) from Continuing Operations $ 300.3 $ 97.2 $ 36.3 $ 187.4 $ (1.0 ) $ — $ 620.2 Income from Discontinued Operations, Net of Tax — — — — 10.5 — 10.5 Net Income $ 300.3 $ 97.2 $ 36.3 $ 187.4 $ 9.5 $ — $ 630.7 Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Consolidated (in millions) March 31, 2016 Total Property, Plant and Equipment $ 40,599.7 $ 14,029.4 $ 4,230.5 $ 7,510.9 $ 357.3 $ (297.6 ) (b) $ 66,430.2 Accumulated Depreciation and Amortization 12,485.3 3,573.5 63.9 3,409.8 180.8 (116.0 ) (b) 19,597.3 Total Property Plant and Equipment - Net $ 28,114.4 $ 10,455.9 $ 4,166.6 $ 4,101.1 $ 176.5 $ (181.6 ) (b) $ 46,832.9 Total Assets $ 36,197.0 $ 14,341.3 $ 5,152.7 $ 5,400.2 $ 21,962.1 $ (20,566.8 ) (b) (c) $ 62,486.5 Long-term Debt Due Within One Year: Affiliated $ — $ — $ — $ — $ — $ — $ — Non-Affiliated 1,174.3 786.3 — 71.7 1.0 — 2,033.3 Long-term Debt: Affiliated 20.0 — — 32.2 — (52.2 ) — Non-Affiliated 9,948.1 4,665.6 1,654.1 635.3 846.2 — 17,749.3 Total Long-term Debt $ 11,142.4 $ 5,451.9 $ 1,654.1 $ 739.2 $ 847.2 $ (52.2 ) $ 19,782.6 Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Consolidated (in millions) December 31, 2015 Total Property, Plant and Equipment $ 40,130.3 $ 13,840.5 $ 3,977.6 $ 7,461.3 $ 350.9 $ (279.2 ) (b) $ 65,481.4 Accumulated Depreciation and Amortization 12,335.0 3,529.2 52.3 3,367.0 176.9 (112.2 ) (b) 19,348.2 Total Property Plant and Equipment - Net $ 27,795.3 $ 10,311.3 $ 3,925.3 $ 4,094.3 $ 174.0 $ (167.0 ) (b) $ 46,133.2 Total Assets $ 35,792.3 $ 14,640.2 $ 5,012.1 $ 5,414.5 $ 21,907.4 $ (21,083.4 ) (b) (c) $ 61,683.1 Long-term Debt Due Within One Year: Affiliated $ — $ — $ — $ — $ — $ — $ — Non-Affiliated 935.4 824.7 — 71.6 0.1 — 1,831.8 Long-term Debt: Affiliated 20.0 — — 32.2 — (52.2 ) — Non-Affiliated 9,833.0 4,776.8 1,648.4 639.5 843.2 — 17,740.9 Total Long-term Debt $ 10,788.4 $ 5,601.5 $ 1,648.4 $ 743.3 $ 843.3 $ (52.2 ) $ 19,572.7 (a) Corporate and Other primarily includes the purchasing of receivables from certain AEP utility subsidiaries. This segment also includes Parent’s guarantee revenue received from affiliates, investment income, interest income, interest expense and discontinued operations of AEPRO and other nonallocated costs. (b) Includes eliminations due to an intercompany capital lease. (c) Reconciling Adjustments for Total Assets primarily include the elimination of intercompany advances to affiliates and intercompany accounts receivable along with the elimination of AEP’s investments in subsidiary companies. Registrant Subsidiaries’ Reportable Segments The Registrant Subsidiaries each have one reportable segment, an integrated electricity generation, transmission and distribution business, except OPCo, an electricity transmission and distribution business. The Registrant Subsidiaries’ other activities are insignificant. The Registrant Subsidiaries’ operations are managed on an integrated basis because of the substantial impact of cost-based rates and regulatory oversight on the business process, cost structures and operating results. |
Southwestern Electric Power Co [Member] | |
Business Segments | BUSINESS SEGMENTS The disclosures in this note apply to all Registrants unless indicated otherwise. AEP’s Reportable Segments AEP’s primary business is the generation, transmission and distribution of electricity. Within its Vertically Integrated Utilities segment, AEP centrally dispatches generation assets and manages its overall utility operations on an integrated basis because of the substantial impact of cost-based rates and regulatory oversight. Intersegment sales and transfers are generally based on underlying contractual arrangements and agreements. AEP’s reportable segments and their related business activities are outlined below: Vertically Integrated Utilities • Generation, transmission and distribution of electricity for sale to retail and wholesale customers through assets owned and operated by AEGCo, APCo, I&M, KGPCo, KPCo, PSO, SWEPCo and WPCo. Transmission and Distribution Utilities • Transmission and distribution of electricity for sale to retail and wholesale customers through assets owned and operated by OPCo, TCC and TNC. • OPCo purchases energy and capacity to serve SSO customers and provides transmission and distribution services for all connected load. AEP Transmission Holdco • Development, construction and operation of transmission facilities through investments in AEP’s wholly-owned transmission-only subsidiaries and transmission-only joint ventures. These investments have PUCT-approved or FERC-approved returns on equity. Generation & Marketing • Nonregulated generation in ERCOT and PJM. • Marketing, risk management and retail activities in ERCOT, PJM, SPP and MISO. The remainder of AEP’s activities is presented as Corporate and Other. While not considered a reportable segment, Corporate and Other primarily includes the purchasing of receivables from certain AEP utility subsidiaries, Parent’s guarantee revenue received from affiliates, investment income, interest income and interest expense and other nonallocated costs. With the sale of AEPRO in November 2015, the activities related to the AEP River Operations segment have been moved to Corporate and Other for the periods presented. See “AEPRO (Corporate and Other)” section of Note 6 for additional information. The tables below present AEP’s reportable segment income statement information for the three months ended March 31, 2016 and 2015 and reportable segment balance sheet information as of March 31, 2016 and December 31, 2015 . These amounts include certain estimates and allocations where necessary. Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Adjustments Consolidated (in millions) Three Months Ended Revenues from: External Customers $ 2,218.1 $ 1,077.3 $ 29.3 $ 713.9 $ 6.3 $ — $ 4,044.9 Other Operating Segments 27.5 19.5 59.3 34.1 18.1 (158.5 ) — Total Revenues $ 2,245.6 $ 1,096.8 $ 88.6 $ 748.0 $ 24.4 $ (158.5 ) $ 4,044.9 Income from Continuing Operations $ 278.7 $ 108.0 $ 44.7 $ 70.7 $ 1.0 $ — $ 503.1 Income from Discontinued Operations, Net of Tax — — — — — — — Net Income $ 278.7 $ 108.0 $ 44.7 $ 70.7 $ 1.0 $ — $ 503.1 Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Adjustments Consolidated (in millions) Three Months Ended Revenues from: External Customers $ 2,487.4 $ 1,206.3 $ 21.7 $ 859.2 $ 5.8 $ — $ 4,580.4 Other Operating Segments 17.7 63.8 36.2 311.3 20.4 (449.4 ) — Total Revenues $ 2,505.1 $ 1,270.1 $ 57.9 $ 1,170.5 $ 26.2 $ (449.4 ) $ 4,580.4 Income (Loss) from Continuing Operations $ 300.3 $ 97.2 $ 36.3 $ 187.4 $ (1.0 ) $ — $ 620.2 Income from Discontinued Operations, Net of Tax — — — — 10.5 — 10.5 Net Income $ 300.3 $ 97.2 $ 36.3 $ 187.4 $ 9.5 $ — $ 630.7 Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Consolidated (in millions) March 31, 2016 Total Property, Plant and Equipment $ 40,599.7 $ 14,029.4 $ 4,230.5 $ 7,510.9 $ 357.3 $ (297.6 ) (b) $ 66,430.2 Accumulated Depreciation and Amortization 12,485.3 3,573.5 63.9 3,409.8 180.8 (116.0 ) (b) 19,597.3 Total Property Plant and Equipment - Net $ 28,114.4 $ 10,455.9 $ 4,166.6 $ 4,101.1 $ 176.5 $ (181.6 ) (b) $ 46,832.9 Total Assets $ 36,197.0 $ 14,341.3 $ 5,152.7 $ 5,400.2 $ 21,962.1 $ (20,566.8 ) (b) (c) $ 62,486.5 Long-term Debt Due Within One Year: Affiliated $ — $ — $ — $ — $ — $ — $ — Non-Affiliated 1,174.3 786.3 — 71.7 1.0 — 2,033.3 Long-term Debt: Affiliated 20.0 — — 32.2 — (52.2 ) — Non-Affiliated 9,948.1 4,665.6 1,654.1 635.3 846.2 — 17,749.3 Total Long-term Debt $ 11,142.4 $ 5,451.9 $ 1,654.1 $ 739.2 $ 847.2 $ (52.2 ) $ 19,782.6 Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Consolidated (in millions) December 31, 2015 Total Property, Plant and Equipment $ 40,130.3 $ 13,840.5 $ 3,977.6 $ 7,461.3 $ 350.9 $ (279.2 ) (b) $ 65,481.4 Accumulated Depreciation and Amortization 12,335.0 3,529.2 52.3 3,367.0 176.9 (112.2 ) (b) 19,348.2 Total Property Plant and Equipment - Net $ 27,795.3 $ 10,311.3 $ 3,925.3 $ 4,094.3 $ 174.0 $ (167.0 ) (b) $ 46,133.2 Total Assets $ 35,792.3 $ 14,640.2 $ 5,012.1 $ 5,414.5 $ 21,907.4 $ (21,083.4 ) (b) (c) $ 61,683.1 Long-term Debt Due Within One Year: Affiliated $ — $ — $ — $ — $ — $ — $ — Non-Affiliated 935.4 824.7 — 71.6 0.1 — 1,831.8 Long-term Debt: Affiliated 20.0 — — 32.2 — (52.2 ) — Non-Affiliated 9,833.0 4,776.8 1,648.4 639.5 843.2 — 17,740.9 Total Long-term Debt $ 10,788.4 $ 5,601.5 $ 1,648.4 $ 743.3 $ 843.3 $ (52.2 ) $ 19,572.7 (a) Corporate and Other primarily includes the purchasing of receivables from certain AEP utility subsidiaries. This segment also includes Parent’s guarantee revenue received from affiliates, investment income, interest income, interest expense and discontinued operations of AEPRO and other nonallocated costs. (b) Includes eliminations due to an intercompany capital lease. (c) Reconciling Adjustments for Total Assets primarily include the elimination of intercompany advances to affiliates and intercompany accounts receivable along with the elimination of AEP’s investments in subsidiary companies. Registrant Subsidiaries’ Reportable Segments The Registrant Subsidiaries each have one reportable segment, an integrated electricity generation, transmission and distribution business, except OPCo, an electricity transmission and distribution business. The Registrant Subsidiaries’ other activities are insignificant. The Registrant Subsidiaries’ operations are managed on an integrated basis because of the substantial impact of cost-based rates and regulatory oversight on the business process, cost structures and operating results. |
Derivatives and Hedging
Derivatives and Hedging | 3 Months Ended |
Mar. 31, 2016 | |
Derivatives and Hedging | DERIVATIVES AND HEDGING The disclosures in this note apply to all Registrants unless indicated otherwise. OBJECTIVES FOR UTILIZATION OF DERIVATIVE INSTRUMENTS AEPSC is agent for and transacts on behalf of AEP subsidiaries, including the Registrant Subsidiaries. AEPEP is agent for and transacts on behalf of other AEP subsidiaries. The Registrants are exposed to certain market risks as major power producers and participants in the electricity, capacity, natural gas, coal and emission allowance markets. These risks include commodity price risks which may be subject to capacity risk, interest rate risk, credit risk and, to a lesser extent, foreign currency exchange risk. These risks represent the risk of loss that may impact the Registrants due to changes in the underlying market prices or rates. Management utilizes derivative instruments to manage these risks. STRATEGIES FOR UTILIZATION OF DERIVATIVE INSTRUMENTS TO ACHIEVE OBJECTIVES Risk Management Strategies The strategy surrounding the use of derivative instruments primarily focuses on managing risk exposures, future cash flows and creating value utilizing both economic and formal hedging strategies. The risk management strategies also include the use of derivative instruments for trading purposes which focus on seizing market opportunities to create value driven by expected changes in the market prices of the commodities. To accomplish these objectives, the Registrants primarily employ risk management contracts including physical and financial forward purchase-and-sale contracts and, to a lesser extent, OTC swaps and options. Not all risk management contracts meet the definition of a derivative under the accounting guidance for “Derivatives and Hedging.” Derivative risk management contracts elected normal under the normal purchases and normal sales scope exception are not subject to the requirements of this accounting guidance. The Registrants utilize power, capacity, coal, natural gas, interest rate and, to a lesser extent, heating oil, gasoline and other commodity contracts to manage the risk associated with the energy business. The Registrants utilize interest rate derivative contracts in order to manage the interest rate exposure associated with the commodity portfolio. For disclosure purposes, such risks are grouped as “Commodity,” as these risks are related to energy risk management activities. The Registrants also utilize derivative contracts to manage interest rate risk associated with debt financing and foreign currency risk associated with future purchase obligations denominated in foreign currencies. For disclosure purposes, these risks are grouped as “Interest Rate and Foreign Currency.” The amount of risk taken is determined by the Commercial Operations, Energy Supply and Finance groups in accordance with established risk management policies as approved by the Finance Committee of the Board of Directors. The following tables represent the gross notional volume of the Registrants’ outstanding derivative contracts as of March 31, 2016 and December 31, 2015 : Notional Volume of Derivative Instruments March 31, 2016 Primary Risk Exposure Unit of Measure AEP APCo I&M OPCo PSO SWEPCo (in millions) Commodity: Power MWhs 272.7 25.0 13.9 11.6 4.8 5.9 Coal Tons 3.4 — 1.1 — — 2.3 Natural Gas MMBtus 42.7 0.3 0.2 — 0.2 0.2 Heating Oil and Gasoline Gallons 6.9 1.3 0.6 1.5 0.8 0.9 Interest Rate USD $ 101.9 $ 1.2 $ 0.8 $ — $ — $ — Interest Rate and Foreign Currency USD $ 559.3 $ — $ — $ — $ — $ — Notional Volume of Derivative Instruments December 31, 2015 Primary Risk Exposure Unit of Measure AEP APCo I&M OPCo PSO SWEPCo (in millions) Commodity: Power MWhs 317.8 40.9 22.8 13.3 11.3 14.0 Coal Tons 4.4 — 1.6 — — 2.8 Natural Gas MMBtus 38.2 0.3 0.2 — 0.2 0.2 Heating Oil and Gasoline Gallons 7.4 1.4 0.7 1.6 0.8 0.9 Interest Rate USD $ 113.5 $ 2.4 $ 1.6 $ — $ — $ — Interest Rate and Foreign Currency USD $ 560.3 $ — $ — $ — $ — $ — Fair Value Hedging Strategies (Applies to AEP) Parent enters into interest rate derivative transactions as part of an overall strategy to manage the mix of fixed-rate and floating-rate debt. Certain interest rate derivative transactions effectively modify exposure to interest rate risk by converting a portion of fixed-rate debt to a floating rate. Provided specific criteria are met, these interest rate derivatives are designated as fair value hedges. Cash Flow Hedging Strategies The Registrants utilize cash flow hedges on certain derivative transactions for the purchase and sale of power (“Commodity”) in order to manage the variable price risk related to forecasted purchases and sales. Management monitors the potential impacts of commodity price changes and, where appropriate, enters into derivative transactions to protect profit margins for a portion of future electricity sales and purchases. The Registrants do not hedge all commodity price risk. The Registrants utilize a variety of interest rate derivative transactions in order to manage interest rate risk exposure. The Registrants also utilize interest rate derivative contracts to manage interest rate exposure related to future borrowings of fixed-rate debt. The Registrants do not hedge all interest rate exposure. At times, the Registrants are exposed to foreign currency exchange rate risks primarily when some fixed assets are purchased from foreign suppliers. In accordance with AEP’s risk management policy, the Registrants may utilize foreign currency derivative transactions to protect against the risk of increased cash outflows resulting from a foreign currency’s appreciation against the dollar. The Registrants do not hedge all foreign currency exposure. ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND THE IMPACT ON THE FINANCIAL STATEMENTS The accounting guidance for “Derivatives and Hedging” requires recognition of all qualifying derivative instruments as either assets or liabilities on the condensed balance sheets at fair value. The fair values of derivative instruments accounted for using MTM accounting or hedge accounting are based on exchange prices and broker quotes. If a quoted market price is not available, the estimate of fair value is based on the best information available including valuation models that estimate future energy prices based on existing market and broker quotes, supply and demand market data and assumptions. In order to determine the relevant fair values of the derivative instruments, the Registrants apply valuation adjustments for discounting, liquidity and credit quality. Credit risk is the risk that a counterparty will fail to perform on the contract or fail to pay amounts due. Liquidity risk represents the risk that imperfections in the market will cause the price to vary from estimated fair value based upon prevailing market supply and demand conditions. Since energy markets are imperfect and volatile, there are inherent risks related to the underlying assumptions in models used to fair value risk management contracts. Unforeseen events may cause reasonable price curves to differ from actual price curves throughout a contract’s term and at the time a contract settles. Consequently, there could be significant adverse or favorable effects on future net income and cash flows if market prices are not consistent with management’s estimates of current market consensus for forward prices in the current period. This is particularly true for longer term contracts. Cash flows may vary based on market conditions, margin requirements and the timing of settlement of risk management contracts. According to the accounting guidance for “Derivatives and Hedging,” the Registrants reflect the fair values of derivative instruments subject to netting agreements with the same counterparty net of related cash collateral. For certain risk management contracts, the Registrants are required to post or receive cash collateral based on third party contractual agreements and risk profiles. For the March 31, 2016 and December 31, 2015 condensed balance sheets, the Registrants netted cash collateral received from third parties against short-term and long-term risk management assets and cash collateral paid to third parties against short-term and long-term risk management liabilities as follows: March 31, 2016 December 31, 2015 Company Cash Collateral Received Netted Against Risk Management Assets Cash Collateral Paid Netted Against Risk Management Liabilities Cash Collateral Received Netted Against Risk Management Assets Cash Collateral Paid Netted Against Risk Management Liabilities (in millions) AEP $ 11.8 $ 43.0 $ 5.8 $ 44.4 APCo — 0.6 — 3.1 I&M — 0.1 — 0.6 OPCo — 0.2 — 0.5 PSO — 0.1 — 0.3 SWEPCo — 0.2 — 0.3 The following tables represent the gross fair value of the Registrants’ derivative activity on the condensed balance sheets as of March 31, 2016 and December 31, 2015 : AEP Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts Hedging Contracts Gross Amounts of Risk Management Assets/ Liabilities Recognized Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location Commodity (a) Commodity (a) Interest Rate and Foreign Currency (a) (in millions) Current Risk Management Assets $ 425.9 $ 9.8 $ 0.9 $ 436.6 $ (292.8 ) $ 143.8 Long-term Risk Management Assets 390.1 13.5 — 403.6 (74.7 ) 328.9 Total Assets 816.0 23.3 0.9 840.2 (367.5 ) 472.7 Current Risk Management Liabilities 401.6 12.6 0.3 414.5 (310.2 ) 104.3 Long-term Risk Management Liabilities 264.6 31.0 0.5 296.1 (88.5 ) 207.6 Total Liabilities 666.2 43.6 0.8 710.6 (398.7 ) 311.9 Total MTM Derivative Contract Net Assets (Liabilities) $ 149.8 $ (20.3 ) $ 0.1 $ 129.6 $ 31.2 $ 160.8 AEP Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts Hedging Contracts Gross Amounts of Risk Management Assets/ Liabilities Recognized Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location Commodity (a) Commodity (a) Interest Rate and Foreign Currency (a) (in millions) Current Risk Management Assets $ 368.8 $ 8.2 $ 0.1 $ 377.1 $ (242.7 ) $ 134.4 Long-term Risk Management Assets 364.8 11.7 — 376.5 (54.7 ) 321.8 Total Assets 733.6 19.9 0.1 753.6 (297.4 ) 456.2 Current Risk Management Liabilities 347.0 9.1 0.3 356.4 (269.3 ) 87.1 Long-term Risk Management Liabilities 223.3 19.3 3.2 245.8 (66.7 ) 179.1 Total Liabilities 570.3 28.4 3.5 602.2 (336.0 ) 266.2 Total MTM Derivative Contract Net Assets (Liabilities) $ 163.3 $ (8.5 ) $ (3.4 ) $ 151.4 $ 38.6 $ 190.0 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts primarily include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. APCo Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 24.1 $ (12.2 ) $ 11.9 Long-term Risk Management Assets - Nonaffiliated 1.0 (0.7 ) 0.3 Total Assets 25.1 (12.9 ) 12.2 Current Risk Management Liabilities - Nonaffiliated 23.2 (12.8 ) 10.4 Long-term Risk Management Liabilities - Nonaffiliated 0.8 (0.7 ) 0.1 Total Liabilities 24.0 (13.5 ) 10.5 Total MTM Derivative Contract Net Assets $ 1.1 $ 0.6 $ 1.7 APCo Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 25.9 $ (10.3 ) $ 15.6 Long-term Risk Management Assets - Nonaffiliated 0.3 (0.2 ) 0.1 Total Assets 26.2 (10.5 ) 15.7 Current Risk Management Liabilities - Nonaffiliated 18.1 (13.3 ) 4.8 Long-term Risk Management Liabilities - Nonaffiliated 0.3 (0.2 ) 0.1 Total Liabilities 18.4 (13.5 ) 4.9 Total MTM Derivative Contract Net Assets $ 7.8 $ 3.0 $ 10.8 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. I&M Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 17.6 $ (8.5 ) $ 9.1 Long-term Risk Management Assets - Nonaffiliated 0.9 (0.5 ) 0.4 Total Assets 18.5 (9.0 ) 9.5 Current Risk Management Liabilities - Nonaffiliated 15.0 (8.6 ) 6.4 Long-term Risk Management Liabilities - Nonaffiliated 1.5 (0.5 ) 1.0 Total Liabilities 16.5 (9.1 ) 7.4 Total MTM Derivative Contract Net Assets $ 2.0 $ 0.1 $ 2.1 I&M Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 22.8 $ (10.5 ) $ 12.3 Long-term Risk Management Assets - Nonaffiliated 0.6 (0.6 ) — Total Assets 23.4 (11.1 ) 12.3 Current Risk Management Liabilities - Nonaffiliated 17.0 (10.7 ) 6.3 Long-term Risk Management Liabilities - Nonaffiliated 2.6 (1.0 ) 1.6 Total Liabilities 19.6 (11.7 ) 7.9 Total MTM Derivative Contract Net Assets $ 3.8 $ 0.6 $ 4.4 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. OPCo Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ — $ — $ — Long-term Risk Management Assets — — — Total Assets — — — Current Risk Management Liabilities 5.7 (0.2 ) 5.5 Long-term Risk Management Liabilities 5.8 — 5.8 Total Liabilities 11.5 (0.2 ) 11.3 Total MTM Derivative Contract Net Assets (Liabilities) $ (11.5 ) $ 0.2 $ (11.3 ) OPCo Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ — $ — $ — Long-term Risk Management Assets 19.2 — 19.2 Total Assets 19.2 — 19.2 Current Risk Management Liabilities 4.1 (0.5 ) 3.6 Long-term Risk Management Liabilities — — — Total Liabilities 4.1 (0.5 ) 3.6 Total MTM Derivative Contract Net Assets $ 15.1 $ 0.5 $ 15.6 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. PSO Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.7 $ — $ 0.7 Long-term Risk Management Assets — — — Total Assets 0.7 — 0.7 Current Risk Management Liabilities 0.3 (0.1 ) 0.2 Long-term Risk Management Liabilities — — — Total Liabilities 0.3 (0.1 ) 0.2 Total MTM Derivative Contract Net Assets $ 0.4 $ 0.1 $ 0.5 PSO Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.6 $ — $ 0.6 Long-term Risk Management Assets — — — Total Assets 0.6 — 0.6 Current Risk Management Liabilities 0.5 (0.3 ) 0.2 Long-term Risk Management Liabilities — — — Total Liabilities 0.5 (0.3 ) 0.2 Total MTM Derivative Contract Net Assets $ 0.1 $ 0.3 $ 0.4 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. SWEPCo Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.9 $ (0.1 ) $ 0.8 Long-term Risk Management Assets — — — Total Assets 0.9 (0.1 ) 0.8 Current Risk Management Liabilities 3.8 (0.3 ) 3.5 Long-term Risk Management Liabilities 1.8 — 1.8 Total Liabilities 5.6 (0.3 ) 5.3 Total MTM Derivative Contract Net Assets (Liabilities) $ (4.7 ) $ 0.2 $ (4.5 ) SWEPCo Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.8 $ — $ 0.8 Long-term Risk Management Assets — — — Total Assets 0.8 — 0.8 Current Risk Management Liabilities 3.4 (0.3 ) 3.1 Long-term Risk Management Liabilities 2.1 — 2.1 Total Liabilities 5.5 (0.3 ) 5.2 Total MTM Derivative Contract Net Assets (Liabilities) $ (4.7 ) $ 0.3 $ (4.4 ) (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. The tables below present the Registrants’ activity of derivative risk management contracts for the three months ended March 31, 2016 and 2015 : Amount of Gain (Loss) Recognized on Risk Management Contracts For the Three Months Ended March 31, 2016 Location of Gain (Loss) AEP APCo I&M OPCo PSO SWEPCo (in millions) Vertically Integrated Utilities Revenues $ 0.6 $ — $ — $ — $ — $ — Transmission and Distribution Utilities Revenues (3.5 ) — — — — — Generation & Marketing Revenues 19.8 — — — — — Electric Generation, Transmission and Distribution Revenues — (0.8 ) 1.6 (3.5 ) — — Sales to AEP Affiliates — 1.1 4.0 — — — Purchased Electricity for Resale 2.1 1.4 0.1 — — — Other Operation Expense (0.7 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Maintenance Expense (0.8 ) (0.2 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Regulatory Assets (a) (11.1 ) 0.2 0.3 (11.4 ) (0.5 ) 0.1 Regulatory Liabilities (a) 12.7 15.9 3.9 (15.2 ) — 4.5 Total Gain (Loss) on Risk Management Contracts $ 19.1 $ 17.5 $ 9.7 $ (30.3 ) $ (0.7 ) $ 4.4 Amount of Gain (Loss) Recognized on Risk Management Contracts For the Three Months Ended March 31, 2015 Location of Gain (Loss) AEP APCo I&M OPCo PSO SWEPCo (in millions) Vertically Integrated Utilities Revenues $ 4.4 $ — $ — $ — $ — $ — Generation & Marketing Revenues 48.8 — — — — — Electric Generation, Transmission and Distribution Revenues — 0.6 2.2 — — — Purchased Electricity for Resale 3.3 0.7 0.3 — — — Other Operation Expense (0.9 ) (0.1 ) (0.1 ) (0.2 ) (0.1 ) (0.1 ) Maintenance Expense (0.8 ) (0.2 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Regulatory Assets (a) (4.1 ) 0.7 (0.5 ) — (0.8 ) (3.5 ) Regulatory Liabilities (a) 3.9 1.7 (3.0 ) 4.7 — 3.9 Total Gain (Loss) on Risk Management Contracts $ 54.6 $ 3.4 $ (1.2 ) $ 4.4 $ (1.0 ) $ 0.2 (a) Represents realized and unrealized gains and losses subject to regulatory accounting treatment recorded as either current or noncurrent on the condensed balance sheets. Certain qualifying derivative instruments have been designated as normal purchase or normal sale contracts, as provided in the accounting guidance for “Derivatives and Hedging.” Derivative contracts that have been designated as normal purchases or normal sales under that accounting guidance are not subject to MTM accounting treatment and are recognized on the condensed statements of income on an accrual basis. The accounting for the changes in the fair value of a derivative instrument depends on whether it qualifies for and has been designated as part of a hedging relationship and further, on the type of hedging relationship. Depending on the exposure, management designates a hedging instrument as a fair value hedge or a cash flow hedge. For contracts that have not been designated as part of a hedging relationship, the accounting for changes in fair value depends on whether the derivative instrument is held for trading purposes. Unrealized and realized gains and losses on derivative instruments held for trading purposes are included in revenues on a net basis on the condensed statements of income. Unrealized and realized gains and losses on derivative instruments not held for trading purposes are included in revenues or expenses on the condensed statements of income depending on the relevant facts and circumstances. Certain derivatives that economically hedge future commodity risk are recorded in the same expense line item on the condensed statements of income as that of the associated risk. However, unrealized and some realized gains and losses in regulated jurisdictions for both trading and non-trading derivative instruments are recorded as regulatory assets (for losses) or regulatory liabilities (for gains) in accordance with the accounting guidance for “Regulated Operations.” In connection with OPCo’s June 2012 - May 2015 ESP, the PUCO ordered OPCo to conduct energy and capacity auctions for its entire SSO load for delivery beginning in June 2015, see Note 4 - Rate Matters. These auctions resulted in a range of products, including 12-month, 24-month, and 36-month periods. The delivery period for each contract is scheduled to start on the first day of June of each year, immediately following the auction. Certain affiliated Vertically Integrated Utility and Generation & Marketing segment entities participated in the auction process and were awarded tranches of OPCo’s SSO load. The underlying contracts are derivatives subject to the accounting guidance for “Derivatives and Hedging” and are accounted for using MTM accounting, unless the contract has been designated as a normal purchase or normal sale. Accounting for Fair Value Hedging Strategies (Applies to AEP) For fair value hedges (i.e. hedging the exposure to changes in the fair value of an asset, liability or an identified portion thereof attributable to a particular risk), the gain or loss on the derivative instrument as well as the offsetting gain or loss on the hedged item associated with the hedged risk impacts Net Income during the period of change. AEP records realized and unrealized gains or losses on interest rate swaps that qualify for fair value hedge accounting treatment and any offsetting changes in the fair value of the debt being hedged in Interest Expense on the condensed statements of income. The following table shows the results of hedging gains (losses) during the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 2015 (in millions) Gain on Fair Value Hedging Instruments $ 3.5 $ 4.5 Loss on Fair Value Portion of Long-term Debt (3.5 ) (4.5 ) During the three months ended March 31, 2016 and 2015 , hedge ineffectiveness was immaterial. Accounting for Cash Flow Hedging Strategies For cash flow hedges (i.e. hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the Registrants initially report the effective portion of the gain or loss on the derivative instrument as a component of Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets until the period the hedged item affects Net Income. The Registrants recognize any hedge ineffectiveness in Net Income immediately during the period of change, except in regulated jurisdictions where hedge ineffectiveness would be recorded as a regulatory asset (for losses) or a regulatory liability (for gains) if applicable. Realized gains and losses on derivative contracts for the purchase and sale of power designated as cash flow hedges are included in Total Revenues or Purchased Electricity for Resale on the condensed statements of income or in Regulatory Assets or Regulatory Liabilities on the condensed balance sheets, depending on the specific nature of the risk being hedged. During the three months ended March 31, 2016 and 2015 , AEP applied cash flow hedging to outstanding power derivatives. During the three months ended March 31, 2016 and 2015 , the Registrant Subsidiaries did not apply cash flow hedging to outstanding power derivatives. The Registrants reclassify gains and losses on interest rate derivative hedges related to debt financings from Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets into Interest Expense on the condensed statements of income in those periods in which hedged interest payments occur. During the three months ended March 31, 2016 and 2015 , AEP applied cash flow hedging to outstanding interest rate derivatives. During the three months ended March 31, 2016 and 2015 , the Registrant Subsidiaries did not apply cash flow hedging to outstanding interest rate derivatives. The accumulated gains or losses related to foreign currency hedges are reclassified from Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets into Depreciation and Amortization expense on the condensed statements of income over the depreciable lives of the fixed assets designated as the hedged items in qualifying foreign currency hedging relationships. During the three months ended March 31, 2016 and 2015 , the Registrants did not apply cash flow hedging to any outstanding foreign currency derivatives as cash flow hedges. During the three months ended March 31, 2016 and 2015 , hedge ineffectiveness was immaterial or nonexistent for all of the hedge strategies disclosed above. For details on effective cash flow hedges included in Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets and the reasons for changes in cash flow hedges, see Note 3 . Cash flow hedges included in Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets as of March 31, 2016 and December 31, 2015 were: Impact of Cash Flow Hedges on AEP’s Condensed Balance Sheets March 31, 2016 December 31, 2015 Company Commodity Interest Rate and Foreign Currency Commodity Interest Rate and Foreign Currency (in millions) Hedging Assets (a) $ 19.8 $ — $ 17.6 $ — Hedging Liabilities (a) 40.1 0.4 26.1 0.4 AOCI Loss Net of Tax (12.9 ) (16.9 ) (5.2 ) (17.2 ) Portion Expected to be Reclassified to Net Income During the Next Twelve Months (1.7 ) (1.4 ) (0.4 ) (1.5 ) (a) Hedging Assets and Hedging Liabilities are included in Risk Management Assets and Liabilities on the condensed balance sheets. As of March 31, 2016 the maximum length of time that AEP is hedging its exposure to variability in future cash flows related to forecasted transactions is 141 months. Impact of Cash Flow Hedges on the Registrant Subsidiaries’ Condensed Balance Sheets March 31, 2016 December 31, 2015 Interest Rate and Foreign Currency Company AOCI Gain (Loss) Net of Tax Expected to be Reclassified to Net Income During the Next Twelve Months AOCI Gain (Loss) Net of Tax Expected to be Reclassified to Net Income During the Next Twelve Months (in millions) APCo $ 3.4 $ 0.7 $ 3.6 $ 0.7 I&M (12.9 ) (1.3 ) (13.3 ) (1.3 ) OPCo 3.9 1.1 4.3 1.2 PSO 4.0 0.8 4.2 0.8 SWEPCo (8.6 ) (1.7 ) (9.1 ) (1.7 ) The actual amounts reclassified from Accumulated Other Comprehensive Income (Loss) to Net Income can differ from the estimate above due to market price changes. Credit Risk Management limits credit risk in wholesale marketing and trading activities by assessing the creditworthiness of potential counterparties before entering into transactions with them and continuing to evaluate their creditworthiness on an ongoing basis. Management uses Moody’s, Standard and Poor’s and current market-based qualitative and quantitative data as well as financial statements to assess the financial health of counterparties on an ongoing basis. Master agreements are typically used to facilitate the netting of cash flows associated with a single counterparty and may include collateral requirements. Collateral requirements in the form of cash, letters of credit and parental/affiliate guarantees may be obtained as security from counterparties in order to mitigate credit risk. A counterparty is required to post cash or letters of credit in the event exposure exceeds the established threshold. The threshold represents an unsecured credit limit which may be supported by a parental/affiliate guaranty, as determined in accordance with AEP’s credit policy. In addition, master agreements allow for termination and liquidation of all positions in the event of a failure or inability to post collateral. Collateral Triggering Events Credit Downgrade Triggers (Applies to AEP, APCo, I&M, PSO and SWEPCo) Under the tariffs of the RTOs and Independent System Operators (ISOs) and a limited number of derivative and non-derivative contracts primarily related to competitive retail auction loads, additional amounts of collateral are required if certain credit ratings decline below a specified rating threshold. The amount of collateral required fluctuates based on market prices and total exposure. On an ongoing basis, AEP’s risk management organization assesses the appropriateness of these collateral triggering items in contracts. AEP, APCo, I&M, PSO and SWEPCo have not experienced a downgrade below a specified rati |
Appalachian Power Co [Member] | |
Derivatives and Hedging | DERIVATIVES AND HEDGING The disclosures in this note apply to all Registrants unless indicated otherwise. OBJECTIVES FOR UTILIZATION OF DERIVATIVE INSTRUMENTS AEPSC is agent for and transacts on behalf of AEP subsidiaries, including the Registrant Subsidiaries. AEPEP is agent for and transacts on behalf of other AEP subsidiaries. The Registrants are exposed to certain market risks as major power producers and participants in the electricity, capacity, natural gas, coal and emission allowance markets. These risks include commodity price risks which may be subject to capacity risk, interest rate risk, credit risk and, to a lesser extent, foreign currency exchange risk. These risks represent the risk of loss that may impact the Registrants due to changes in the underlying market prices or rates. Management utilizes derivative instruments to manage these risks. STRATEGIES FOR UTILIZATION OF DERIVATIVE INSTRUMENTS TO ACHIEVE OBJECTIVES Risk Management Strategies The strategy surrounding the use of derivative instruments primarily focuses on managing risk exposures, future cash flows and creating value utilizing both economic and formal hedging strategies. The risk management strategies also include the use of derivative instruments for trading purposes which focus on seizing market opportunities to create value driven by expected changes in the market prices of the commodities. To accomplish these objectives, the Registrants primarily employ risk management contracts including physical and financial forward purchase-and-sale contracts and, to a lesser extent, OTC swaps and options. Not all risk management contracts meet the definition of a derivative under the accounting guidance for “Derivatives and Hedging.” Derivative risk management contracts elected normal under the normal purchases and normal sales scope exception are not subject to the requirements of this accounting guidance. The Registrants utilize power, capacity, coal, natural gas, interest rate and, to a lesser extent, heating oil, gasoline and other commodity contracts to manage the risk associated with the energy business. The Registrants utilize interest rate derivative contracts in order to manage the interest rate exposure associated with the commodity portfolio. For disclosure purposes, such risks are grouped as “Commodity,” as these risks are related to energy risk management activities. The Registrants also utilize derivative contracts to manage interest rate risk associated with debt financing and foreign currency risk associated with future purchase obligations denominated in foreign currencies. For disclosure purposes, these risks are grouped as “Interest Rate and Foreign Currency.” The amount of risk taken is determined by the Commercial Operations, Energy Supply and Finance groups in accordance with established risk management policies as approved by the Finance Committee of the Board of Directors. The following tables represent the gross notional volume of the Registrants’ outstanding derivative contracts as of March 31, 2016 and December 31, 2015 : Notional Volume of Derivative Instruments March 31, 2016 Primary Risk Exposure Unit of Measure AEP APCo I&M OPCo PSO SWEPCo (in millions) Commodity: Power MWhs 272.7 25.0 13.9 11.6 4.8 5.9 Coal Tons 3.4 — 1.1 — — 2.3 Natural Gas MMBtus 42.7 0.3 0.2 — 0.2 0.2 Heating Oil and Gasoline Gallons 6.9 1.3 0.6 1.5 0.8 0.9 Interest Rate USD $ 101.9 $ 1.2 $ 0.8 $ — $ — $ — Interest Rate and Foreign Currency USD $ 559.3 $ — $ — $ — $ — $ — Notional Volume of Derivative Instruments December 31, 2015 Primary Risk Exposure Unit of Measure AEP APCo I&M OPCo PSO SWEPCo (in millions) Commodity: Power MWhs 317.8 40.9 22.8 13.3 11.3 14.0 Coal Tons 4.4 — 1.6 — — 2.8 Natural Gas MMBtus 38.2 0.3 0.2 — 0.2 0.2 Heating Oil and Gasoline Gallons 7.4 1.4 0.7 1.6 0.8 0.9 Interest Rate USD $ 113.5 $ 2.4 $ 1.6 $ — $ — $ — Interest Rate and Foreign Currency USD $ 560.3 $ — $ — $ — $ — $ — Fair Value Hedging Strategies (Applies to AEP) Parent enters into interest rate derivative transactions as part of an overall strategy to manage the mix of fixed-rate and floating-rate debt. Certain interest rate derivative transactions effectively modify exposure to interest rate risk by converting a portion of fixed-rate debt to a floating rate. Provided specific criteria are met, these interest rate derivatives are designated as fair value hedges. Cash Flow Hedging Strategies The Registrants utilize cash flow hedges on certain derivative transactions for the purchase and sale of power (“Commodity”) in order to manage the variable price risk related to forecasted purchases and sales. Management monitors the potential impacts of commodity price changes and, where appropriate, enters into derivative transactions to protect profit margins for a portion of future electricity sales and purchases. The Registrants do not hedge all commodity price risk. The Registrants utilize a variety of interest rate derivative transactions in order to manage interest rate risk exposure. The Registrants also utilize interest rate derivative contracts to manage interest rate exposure related to future borrowings of fixed-rate debt. The Registrants do not hedge all interest rate exposure. At times, the Registrants are exposed to foreign currency exchange rate risks primarily when some fixed assets are purchased from foreign suppliers. In accordance with AEP’s risk management policy, the Registrants may utilize foreign currency derivative transactions to protect against the risk of increased cash outflows resulting from a foreign currency’s appreciation against the dollar. The Registrants do not hedge all foreign currency exposure. ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND THE IMPACT ON THE FINANCIAL STATEMENTS The accounting guidance for “Derivatives and Hedging” requires recognition of all qualifying derivative instruments as either assets or liabilities on the condensed balance sheets at fair value. The fair values of derivative instruments accounted for using MTM accounting or hedge accounting are based on exchange prices and broker quotes. If a quoted market price is not available, the estimate of fair value is based on the best information available including valuation models that estimate future energy prices based on existing market and broker quotes, supply and demand market data and assumptions. In order to determine the relevant fair values of the derivative instruments, the Registrants apply valuation adjustments for discounting, liquidity and credit quality. Credit risk is the risk that a counterparty will fail to perform on the contract or fail to pay amounts due. Liquidity risk represents the risk that imperfections in the market will cause the price to vary from estimated fair value based upon prevailing market supply and demand conditions. Since energy markets are imperfect and volatile, there are inherent risks related to the underlying assumptions in models used to fair value risk management contracts. Unforeseen events may cause reasonable price curves to differ from actual price curves throughout a contract’s term and at the time a contract settles. Consequently, there could be significant adverse or favorable effects on future net income and cash flows if market prices are not consistent with management’s estimates of current market consensus for forward prices in the current period. This is particularly true for longer term contracts. Cash flows may vary based on market conditions, margin requirements and the timing of settlement of risk management contracts. According to the accounting guidance for “Derivatives and Hedging,” the Registrants reflect the fair values of derivative instruments subject to netting agreements with the same counterparty net of related cash collateral. For certain risk management contracts, the Registrants are required to post or receive cash collateral based on third party contractual agreements and risk profiles. For the March 31, 2016 and December 31, 2015 condensed balance sheets, the Registrants netted cash collateral received from third parties against short-term and long-term risk management assets and cash collateral paid to third parties against short-term and long-term risk management liabilities as follows: March 31, 2016 December 31, 2015 Company Cash Collateral Received Netted Against Risk Management Assets Cash Collateral Paid Netted Against Risk Management Liabilities Cash Collateral Received Netted Against Risk Management Assets Cash Collateral Paid Netted Against Risk Management Liabilities (in millions) AEP $ 11.8 $ 43.0 $ 5.8 $ 44.4 APCo — 0.6 — 3.1 I&M — 0.1 — 0.6 OPCo — 0.2 — 0.5 PSO — 0.1 — 0.3 SWEPCo — 0.2 — 0.3 The following tables represent the gross fair value of the Registrants’ derivative activity on the condensed balance sheets as of March 31, 2016 and December 31, 2015 : AEP Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts Hedging Contracts Gross Amounts of Risk Management Assets/ Liabilities Recognized Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location Commodity (a) Commodity (a) Interest Rate and Foreign Currency (a) (in millions) Current Risk Management Assets $ 425.9 $ 9.8 $ 0.9 $ 436.6 $ (292.8 ) $ 143.8 Long-term Risk Management Assets 390.1 13.5 — 403.6 (74.7 ) 328.9 Total Assets 816.0 23.3 0.9 840.2 (367.5 ) 472.7 Current Risk Management Liabilities 401.6 12.6 0.3 414.5 (310.2 ) 104.3 Long-term Risk Management Liabilities 264.6 31.0 0.5 296.1 (88.5 ) 207.6 Total Liabilities 666.2 43.6 0.8 710.6 (398.7 ) 311.9 Total MTM Derivative Contract Net Assets (Liabilities) $ 149.8 $ (20.3 ) $ 0.1 $ 129.6 $ 31.2 $ 160.8 AEP Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts Hedging Contracts Gross Amounts of Risk Management Assets/ Liabilities Recognized Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location Commodity (a) Commodity (a) Interest Rate and Foreign Currency (a) (in millions) Current Risk Management Assets $ 368.8 $ 8.2 $ 0.1 $ 377.1 $ (242.7 ) $ 134.4 Long-term Risk Management Assets 364.8 11.7 — 376.5 (54.7 ) 321.8 Total Assets 733.6 19.9 0.1 753.6 (297.4 ) 456.2 Current Risk Management Liabilities 347.0 9.1 0.3 356.4 (269.3 ) 87.1 Long-term Risk Management Liabilities 223.3 19.3 3.2 245.8 (66.7 ) 179.1 Total Liabilities 570.3 28.4 3.5 602.2 (336.0 ) 266.2 Total MTM Derivative Contract Net Assets (Liabilities) $ 163.3 $ (8.5 ) $ (3.4 ) $ 151.4 $ 38.6 $ 190.0 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts primarily include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. APCo Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 24.1 $ (12.2 ) $ 11.9 Long-term Risk Management Assets - Nonaffiliated 1.0 (0.7 ) 0.3 Total Assets 25.1 (12.9 ) 12.2 Current Risk Management Liabilities - Nonaffiliated 23.2 (12.8 ) 10.4 Long-term Risk Management Liabilities - Nonaffiliated 0.8 (0.7 ) 0.1 Total Liabilities 24.0 (13.5 ) 10.5 Total MTM Derivative Contract Net Assets $ 1.1 $ 0.6 $ 1.7 APCo Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 25.9 $ (10.3 ) $ 15.6 Long-term Risk Management Assets - Nonaffiliated 0.3 (0.2 ) 0.1 Total Assets 26.2 (10.5 ) 15.7 Current Risk Management Liabilities - Nonaffiliated 18.1 (13.3 ) 4.8 Long-term Risk Management Liabilities - Nonaffiliated 0.3 (0.2 ) 0.1 Total Liabilities 18.4 (13.5 ) 4.9 Total MTM Derivative Contract Net Assets $ 7.8 $ 3.0 $ 10.8 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. I&M Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 17.6 $ (8.5 ) $ 9.1 Long-term Risk Management Assets - Nonaffiliated 0.9 (0.5 ) 0.4 Total Assets 18.5 (9.0 ) 9.5 Current Risk Management Liabilities - Nonaffiliated 15.0 (8.6 ) 6.4 Long-term Risk Management Liabilities - Nonaffiliated 1.5 (0.5 ) 1.0 Total Liabilities 16.5 (9.1 ) 7.4 Total MTM Derivative Contract Net Assets $ 2.0 $ 0.1 $ 2.1 I&M Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 22.8 $ (10.5 ) $ 12.3 Long-term Risk Management Assets - Nonaffiliated 0.6 (0.6 ) — Total Assets 23.4 (11.1 ) 12.3 Current Risk Management Liabilities - Nonaffiliated 17.0 (10.7 ) 6.3 Long-term Risk Management Liabilities - Nonaffiliated 2.6 (1.0 ) 1.6 Total Liabilities 19.6 (11.7 ) 7.9 Total MTM Derivative Contract Net Assets $ 3.8 $ 0.6 $ 4.4 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. OPCo Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ — $ — $ — Long-term Risk Management Assets — — — Total Assets — — — Current Risk Management Liabilities 5.7 (0.2 ) 5.5 Long-term Risk Management Liabilities 5.8 — 5.8 Total Liabilities 11.5 (0.2 ) 11.3 Total MTM Derivative Contract Net Assets (Liabilities) $ (11.5 ) $ 0.2 $ (11.3 ) OPCo Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ — $ — $ — Long-term Risk Management Assets 19.2 — 19.2 Total Assets 19.2 — 19.2 Current Risk Management Liabilities 4.1 (0.5 ) 3.6 Long-term Risk Management Liabilities — — — Total Liabilities 4.1 (0.5 ) 3.6 Total MTM Derivative Contract Net Assets $ 15.1 $ 0.5 $ 15.6 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. PSO Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.7 $ — $ 0.7 Long-term Risk Management Assets — — — Total Assets 0.7 — 0.7 Current Risk Management Liabilities 0.3 (0.1 ) 0.2 Long-term Risk Management Liabilities — — — Total Liabilities 0.3 (0.1 ) 0.2 Total MTM Derivative Contract Net Assets $ 0.4 $ 0.1 $ 0.5 PSO Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.6 $ — $ 0.6 Long-term Risk Management Assets — — — Total Assets 0.6 — 0.6 Current Risk Management Liabilities 0.5 (0.3 ) 0.2 Long-term Risk Management Liabilities — — — Total Liabilities 0.5 (0.3 ) 0.2 Total MTM Derivative Contract Net Assets $ 0.1 $ 0.3 $ 0.4 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. SWEPCo Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.9 $ (0.1 ) $ 0.8 Long-term Risk Management Assets — — — Total Assets 0.9 (0.1 ) 0.8 Current Risk Management Liabilities 3.8 (0.3 ) 3.5 Long-term Risk Management Liabilities 1.8 — 1.8 Total Liabilities 5.6 (0.3 ) 5.3 Total MTM Derivative Contract Net Assets (Liabilities) $ (4.7 ) $ 0.2 $ (4.5 ) SWEPCo Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.8 $ — $ 0.8 Long-term Risk Management Assets — — — Total Assets 0.8 — 0.8 Current Risk Management Liabilities 3.4 (0.3 ) 3.1 Long-term Risk Management Liabilities 2.1 — 2.1 Total Liabilities 5.5 (0.3 ) 5.2 Total MTM Derivative Contract Net Assets (Liabilities) $ (4.7 ) $ 0.3 $ (4.4 ) (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. The tables below present the Registrants’ activity of derivative risk management contracts for the three months ended March 31, 2016 and 2015 : Amount of Gain (Loss) Recognized on Risk Management Contracts For the Three Months Ended March 31, 2016 Location of Gain (Loss) AEP APCo I&M OPCo PSO SWEPCo (in millions) Vertically Integrated Utilities Revenues $ 0.6 $ — $ — $ — $ — $ — Transmission and Distribution Utilities Revenues (3.5 ) — — — — — Generation & Marketing Revenues 19.8 — — — — — Electric Generation, Transmission and Distribution Revenues — (0.8 ) 1.6 (3.5 ) — — Sales to AEP Affiliates — 1.1 4.0 — — — Purchased Electricity for Resale 2.1 1.4 0.1 — — — Other Operation Expense (0.7 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Maintenance Expense (0.8 ) (0.2 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Regulatory Assets (a) (11.1 ) 0.2 0.3 (11.4 ) (0.5 ) 0.1 Regulatory Liabilities (a) 12.7 15.9 3.9 (15.2 ) — 4.5 Total Gain (Loss) on Risk Management Contracts $ 19.1 $ 17.5 $ 9.7 $ (30.3 ) $ (0.7 ) $ 4.4 Amount of Gain (Loss) Recognized on Risk Management Contracts For the Three Months Ended March 31, 2015 Location of Gain (Loss) AEP APCo I&M OPCo PSO SWEPCo (in millions) Vertically Integrated Utilities Revenues $ 4.4 $ — $ — $ — $ — $ — Generation & Marketing Revenues 48.8 — — — — — Electric Generation, Transmission and Distribution Revenues — 0.6 2.2 — — — Purchased Electricity for Resale 3.3 0.7 0.3 — — — Other Operation Expense (0.9 ) (0.1 ) (0.1 ) (0.2 ) (0.1 ) (0.1 ) Maintenance Expense (0.8 ) (0.2 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Regulatory Assets (a) (4.1 ) 0.7 (0.5 ) — (0.8 ) (3.5 ) Regulatory Liabilities (a) 3.9 1.7 (3.0 ) 4.7 — 3.9 Total Gain (Loss) on Risk Management Contracts $ 54.6 $ 3.4 $ (1.2 ) $ 4.4 $ (1.0 ) $ 0.2 (a) Represents realized and unrealized gains and losses subject to regulatory accounting treatment recorded as either current or noncurrent on the condensed balance sheets. Certain qualifying derivative instruments have been designated as normal purchase or normal sale contracts, as provided in the accounting guidance for “Derivatives and Hedging.” Derivative contracts that have been designated as normal purchases or normal sales under that accounting guidance are not subject to MTM accounting treatment and are recognized on the condensed statements of income on an accrual basis. The accounting for the changes in the fair value of a derivative instrument depends on whether it qualifies for and has been designated as part of a hedging relationship and further, on the type of hedging relationship. Depending on the exposure, management designates a hedging instrument as a fair value hedge or a cash flow hedge. For contracts that have not been designated as part of a hedging relationship, the accounting for changes in fair value depends on whether the derivative instrument is held for trading purposes. Unrealized and realized gains and losses on derivative instruments held for trading purposes are included in revenues on a net basis on the condensed statements of income. Unrealized and realized gains and losses on derivative instruments not held for trading purposes are included in revenues or expenses on the condensed statements of income depending on the relevant facts and circumstances. Certain derivatives that economically hedge future commodity risk are recorded in the same expense line item on the condensed statements of income as that of the associated risk. However, unrealized and some realized gains and losses in regulated jurisdictions for both trading and non-trading derivative instruments are recorded as regulatory assets (for losses) or regulatory liabilities (for gains) in accordance with the accounting guidance for “Regulated Operations.” In connection with OPCo’s June 2012 - May 2015 ESP, the PUCO ordered OPCo to conduct energy and capacity auctions for its entire SSO load for delivery beginning in June 2015, see Note 4 - Rate Matters. These auctions resulted in a range of products, including 12-month, 24-month, and 36-month periods. The delivery period for each contract is scheduled to start on the first day of June of each year, immediately following the auction. Certain affiliated Vertically Integrated Utility and Generation & Marketing segment entities participated in the auction process and were awarded tranches of OPCo’s SSO load. The underlying contracts are derivatives subject to the accounting guidance for “Derivatives and Hedging” and are accounted for using MTM accounting, unless the contract has been designated as a normal purchase or normal sale. Accounting for Fair Value Hedging Strategies (Applies to AEP) For fair value hedges (i.e. hedging the exposure to changes in the fair value of an asset, liability or an identified portion thereof attributable to a particular risk), the gain or loss on the derivative instrument as well as the offsetting gain or loss on the hedged item associated with the hedged risk impacts Net Income during the period of change. AEP records realized and unrealized gains or losses on interest rate swaps that qualify for fair value hedge accounting treatment and any offsetting changes in the fair value of the debt being hedged in Interest Expense on the condensed statements of income. The following table shows the results of hedging gains (losses) during the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 2015 (in millions) Gain on Fair Value Hedging Instruments $ 3.5 $ 4.5 Loss on Fair Value Portion of Long-term Debt (3.5 ) (4.5 ) During the three months ended March 31, 2016 and 2015 , hedge ineffectiveness was immaterial. Accounting for Cash Flow Hedging Strategies For cash flow hedges (i.e. hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the Registrants initially report the effective portion of the gain or loss on the derivative instrument as a component of Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets until the period the hedged item affects Net Income. The Registrants recognize any hedge ineffectiveness in Net Income immediately during the period of change, except in regulated jurisdictions where hedge ineffectiveness would be recorded as a regulatory asset (for losses) or a regulatory liability (for gains) if applicable. Realized gains and losses on derivative contracts for the purchase and sale of power designated as cash flow hedges are included in Total Revenues or Purchased Electricity for Resale on the condensed statements of income or in Regulatory Assets or Regulatory Liabilities on the condensed balance sheets, depending on the specific nature of the risk being hedged. During the three months ended March 31, 2016 and 2015 , AEP applied cash flow hedging to outstanding power derivatives. During the three months ended March 31, 2016 and 2015 , the Registrant Subsidiaries did not apply cash flow hedging to outstanding power derivatives. The Registrants reclassify gains and losses on interest rate derivative hedges related to debt financings from Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets into Interest Expense on the condensed statements of income in those periods in which hedged interest payments occur. During the three months ended March 31, 2016 and 2015 , AEP applied cash flow hedging to outstanding interest rate derivatives. During the three months ended March 31, 2016 and 2015 , the Registrant Subsidiaries did not apply cash flow hedging to outstanding interest rate derivatives. The accumulated gains or losses related to foreign currency hedges are reclassified from Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets into Depreciation and Amortization expense on the condensed statements of income over the depreciable lives of the fixed assets designated as the hedged items in qualifying foreign currency hedging relationships. During the three months ended March 31, 2016 and 2015 , the Registrants did not apply cash flow hedging to any outstanding foreign currency derivatives as cash flow hedges. During the three months ended March 31, 2016 and 2015 , hedge ineffectiveness was immaterial or nonexistent for all of the hedge strategies disclosed above. For details on effective cash flow hedges included in Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets and the reasons for changes in cash flow hedges, see Note 3 . Cash flow hedges included in Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets as of March 31, 2016 and December 31, 2015 were: Impact of Cash Flow Hedges on AEP’s Condensed Balance Sheets March 31, 2016 December 31, 2015 Company Commodity Interest Rate and Foreign Currency Commodity Interest Rate and Foreign Currency (in millions) Hedging Assets (a) $ 19.8 $ — $ 17.6 $ — Hedging Liabilities (a) 40.1 0.4 26.1 0.4 AOCI Loss Net of Tax (12.9 ) (16.9 ) (5.2 ) (17.2 ) Portion Expected to be Reclassified to Net Income During the Next Twelve Months (1.7 ) (1.4 ) (0.4 ) (1.5 ) (a) Hedging Assets and Hedging Liabilities are included in Risk Management Assets and Liabilities on the condensed balance sheets. As of March 31, 2016 the maximum length of time that AEP is hedging its exposure to variability in future cash flows related to forecasted transactions is 141 months. Impact of Cash Flow Hedges on the Registrant Subsidiaries’ Condensed Balance Sheets March 31, 2016 December 31, 2015 Interest Rate and Foreign Currency Company AOCI Gain (Loss) Net of Tax Expected to be Reclassified to Net Income During the Next Twelve Months AOCI Gain (Loss) Net of Tax Expected to be Reclassified to Net Income During the Next Twelve Months (in millions) APCo $ 3.4 $ 0.7 $ 3.6 $ 0.7 I&M (12.9 ) (1.3 ) (13.3 ) (1.3 ) OPCo 3.9 1.1 4.3 1.2 PSO 4.0 0.8 4.2 0.8 SWEPCo (8.6 ) (1.7 ) (9.1 ) (1.7 ) The actual amounts reclassified from Accumulated Other Comprehensive Income (Loss) to Net Income can differ from the estimate above due to market price changes. Credit Risk Management limits credit risk in wholesale marketing and trading activities by assessing the creditworthiness of potential counterparties before entering into transactions with them and continuing to evaluate their creditworthiness on an ongoing basis. Management uses Moody’s, Standard and Poor’s and current market-based qualitative and quantitative data as well as financial statements to assess the financial health of counterparties on an ongoing basis. Master agreements are typically used to facilitate the netting of cash flows associated with a single counterparty and may include collateral requirements. Collateral requirements in the form of cash, letters of credit and parental/affiliate guarantees may be obtained as security from counterparties in order to mitigate credit risk. A counterparty is required to post cash or letters of credit in the event exposure exceeds the established threshold. The threshold represents an unsecured credit limit which may be supported by a parental/affiliate guaranty, as determined in accordance with AEP’s credit policy. In addition, master agreements allow for termination and liquidation of all positions in the event of a failure or inability to post collateral. Collateral Triggering Events Credit Downgrade Triggers (Applies to AEP, APCo, I&M, PSO and SWEPCo) Under the tariffs of the RTOs and Independent System Operators (ISOs) and a limited number of derivative and non-derivative contracts primarily related to competitive retail auction loads, additional amounts of collateral are required if certain credit ratings decline below a specified rating threshold. The amount of collateral required fluctuates based on market prices and total exposure. On an ongoing basis, AEP’s risk management organization assesses the appropriateness of these collateral triggering items in contracts. AEP, APCo, I&M, PSO and SWEPCo have not experienced a downgrade below a specified rati |
Indiana Michigan Power Co [Member] | |
Derivatives and Hedging | DERIVATIVES AND HEDGING The disclosures in this note apply to all Registrants unless indicated otherwise. OBJECTIVES FOR UTILIZATION OF DERIVATIVE INSTRUMENTS AEPSC is agent for and transacts on behalf of AEP subsidiaries, including the Registrant Subsidiaries. AEPEP is agent for and transacts on behalf of other AEP subsidiaries. The Registrants are exposed to certain market risks as major power producers and participants in the electricity, capacity, natural gas, coal and emission allowance markets. These risks include commodity price risks which may be subject to capacity risk, interest rate risk, credit risk and, to a lesser extent, foreign currency exchange risk. These risks represent the risk of loss that may impact the Registrants due to changes in the underlying market prices or rates. Management utilizes derivative instruments to manage these risks. STRATEGIES FOR UTILIZATION OF DERIVATIVE INSTRUMENTS TO ACHIEVE OBJECTIVES Risk Management Strategies The strategy surrounding the use of derivative instruments primarily focuses on managing risk exposures, future cash flows and creating value utilizing both economic and formal hedging strategies. The risk management strategies also include the use of derivative instruments for trading purposes which focus on seizing market opportunities to create value driven by expected changes in the market prices of the commodities. To accomplish these objectives, the Registrants primarily employ risk management contracts including physical and financial forward purchase-and-sale contracts and, to a lesser extent, OTC swaps and options. Not all risk management contracts meet the definition of a derivative under the accounting guidance for “Derivatives and Hedging.” Derivative risk management contracts elected normal under the normal purchases and normal sales scope exception are not subject to the requirements of this accounting guidance. The Registrants utilize power, capacity, coal, natural gas, interest rate and, to a lesser extent, heating oil, gasoline and other commodity contracts to manage the risk associated with the energy business. The Registrants utilize interest rate derivative contracts in order to manage the interest rate exposure associated with the commodity portfolio. For disclosure purposes, such risks are grouped as “Commodity,” as these risks are related to energy risk management activities. The Registrants also utilize derivative contracts to manage interest rate risk associated with debt financing and foreign currency risk associated with future purchase obligations denominated in foreign currencies. For disclosure purposes, these risks are grouped as “Interest Rate and Foreign Currency.” The amount of risk taken is determined by the Commercial Operations, Energy Supply and Finance groups in accordance with established risk management policies as approved by the Finance Committee of the Board of Directors. The following tables represent the gross notional volume of the Registrants’ outstanding derivative contracts as of March 31, 2016 and December 31, 2015 : Notional Volume of Derivative Instruments March 31, 2016 Primary Risk Exposure Unit of Measure AEP APCo I&M OPCo PSO SWEPCo (in millions) Commodity: Power MWhs 272.7 25.0 13.9 11.6 4.8 5.9 Coal Tons 3.4 — 1.1 — — 2.3 Natural Gas MMBtus 42.7 0.3 0.2 — 0.2 0.2 Heating Oil and Gasoline Gallons 6.9 1.3 0.6 1.5 0.8 0.9 Interest Rate USD $ 101.9 $ 1.2 $ 0.8 $ — $ — $ — Interest Rate and Foreign Currency USD $ 559.3 $ — $ — $ — $ — $ — Notional Volume of Derivative Instruments December 31, 2015 Primary Risk Exposure Unit of Measure AEP APCo I&M OPCo PSO SWEPCo (in millions) Commodity: Power MWhs 317.8 40.9 22.8 13.3 11.3 14.0 Coal Tons 4.4 — 1.6 — — 2.8 Natural Gas MMBtus 38.2 0.3 0.2 — 0.2 0.2 Heating Oil and Gasoline Gallons 7.4 1.4 0.7 1.6 0.8 0.9 Interest Rate USD $ 113.5 $ 2.4 $ 1.6 $ — $ — $ — Interest Rate and Foreign Currency USD $ 560.3 $ — $ — $ — $ — $ — Fair Value Hedging Strategies (Applies to AEP) Parent enters into interest rate derivative transactions as part of an overall strategy to manage the mix of fixed-rate and floating-rate debt. Certain interest rate derivative transactions effectively modify exposure to interest rate risk by converting a portion of fixed-rate debt to a floating rate. Provided specific criteria are met, these interest rate derivatives are designated as fair value hedges. Cash Flow Hedging Strategies The Registrants utilize cash flow hedges on certain derivative transactions for the purchase and sale of power (“Commodity”) in order to manage the variable price risk related to forecasted purchases and sales. Management monitors the potential impacts of commodity price changes and, where appropriate, enters into derivative transactions to protect profit margins for a portion of future electricity sales and purchases. The Registrants do not hedge all commodity price risk. The Registrants utilize a variety of interest rate derivative transactions in order to manage interest rate risk exposure. The Registrants also utilize interest rate derivative contracts to manage interest rate exposure related to future borrowings of fixed-rate debt. The Registrants do not hedge all interest rate exposure. At times, the Registrants are exposed to foreign currency exchange rate risks primarily when some fixed assets are purchased from foreign suppliers. In accordance with AEP’s risk management policy, the Registrants may utilize foreign currency derivative transactions to protect against the risk of increased cash outflows resulting from a foreign currency’s appreciation against the dollar. The Registrants do not hedge all foreign currency exposure. ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND THE IMPACT ON THE FINANCIAL STATEMENTS The accounting guidance for “Derivatives and Hedging” requires recognition of all qualifying derivative instruments as either assets or liabilities on the condensed balance sheets at fair value. The fair values of derivative instruments accounted for using MTM accounting or hedge accounting are based on exchange prices and broker quotes. If a quoted market price is not available, the estimate of fair value is based on the best information available including valuation models that estimate future energy prices based on existing market and broker quotes, supply and demand market data and assumptions. In order to determine the relevant fair values of the derivative instruments, the Registrants apply valuation adjustments for discounting, liquidity and credit quality. Credit risk is the risk that a counterparty will fail to perform on the contract or fail to pay amounts due. Liquidity risk represents the risk that imperfections in the market will cause the price to vary from estimated fair value based upon prevailing market supply and demand conditions. Since energy markets are imperfect and volatile, there are inherent risks related to the underlying assumptions in models used to fair value risk management contracts. Unforeseen events may cause reasonable price curves to differ from actual price curves throughout a contract’s term and at the time a contract settles. Consequently, there could be significant adverse or favorable effects on future net income and cash flows if market prices are not consistent with management’s estimates of current market consensus for forward prices in the current period. This is particularly true for longer term contracts. Cash flows may vary based on market conditions, margin requirements and the timing of settlement of risk management contracts. According to the accounting guidance for “Derivatives and Hedging,” the Registrants reflect the fair values of derivative instruments subject to netting agreements with the same counterparty net of related cash collateral. For certain risk management contracts, the Registrants are required to post or receive cash collateral based on third party contractual agreements and risk profiles. For the March 31, 2016 and December 31, 2015 condensed balance sheets, the Registrants netted cash collateral received from third parties against short-term and long-term risk management assets and cash collateral paid to third parties against short-term and long-term risk management liabilities as follows: March 31, 2016 December 31, 2015 Company Cash Collateral Received Netted Against Risk Management Assets Cash Collateral Paid Netted Against Risk Management Liabilities Cash Collateral Received Netted Against Risk Management Assets Cash Collateral Paid Netted Against Risk Management Liabilities (in millions) AEP $ 11.8 $ 43.0 $ 5.8 $ 44.4 APCo — 0.6 — 3.1 I&M — 0.1 — 0.6 OPCo — 0.2 — 0.5 PSO — 0.1 — 0.3 SWEPCo — 0.2 — 0.3 The following tables represent the gross fair value of the Registrants’ derivative activity on the condensed balance sheets as of March 31, 2016 and December 31, 2015 : AEP Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts Hedging Contracts Gross Amounts of Risk Management Assets/ Liabilities Recognized Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location Commodity (a) Commodity (a) Interest Rate and Foreign Currency (a) (in millions) Current Risk Management Assets $ 425.9 $ 9.8 $ 0.9 $ 436.6 $ (292.8 ) $ 143.8 Long-term Risk Management Assets 390.1 13.5 — 403.6 (74.7 ) 328.9 Total Assets 816.0 23.3 0.9 840.2 (367.5 ) 472.7 Current Risk Management Liabilities 401.6 12.6 0.3 414.5 (310.2 ) 104.3 Long-term Risk Management Liabilities 264.6 31.0 0.5 296.1 (88.5 ) 207.6 Total Liabilities 666.2 43.6 0.8 710.6 (398.7 ) 311.9 Total MTM Derivative Contract Net Assets (Liabilities) $ 149.8 $ (20.3 ) $ 0.1 $ 129.6 $ 31.2 $ 160.8 AEP Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts Hedging Contracts Gross Amounts of Risk Management Assets/ Liabilities Recognized Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location Commodity (a) Commodity (a) Interest Rate and Foreign Currency (a) (in millions) Current Risk Management Assets $ 368.8 $ 8.2 $ 0.1 $ 377.1 $ (242.7 ) $ 134.4 Long-term Risk Management Assets 364.8 11.7 — 376.5 (54.7 ) 321.8 Total Assets 733.6 19.9 0.1 753.6 (297.4 ) 456.2 Current Risk Management Liabilities 347.0 9.1 0.3 356.4 (269.3 ) 87.1 Long-term Risk Management Liabilities 223.3 19.3 3.2 245.8 (66.7 ) 179.1 Total Liabilities 570.3 28.4 3.5 602.2 (336.0 ) 266.2 Total MTM Derivative Contract Net Assets (Liabilities) $ 163.3 $ (8.5 ) $ (3.4 ) $ 151.4 $ 38.6 $ 190.0 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts primarily include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. APCo Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 24.1 $ (12.2 ) $ 11.9 Long-term Risk Management Assets - Nonaffiliated 1.0 (0.7 ) 0.3 Total Assets 25.1 (12.9 ) 12.2 Current Risk Management Liabilities - Nonaffiliated 23.2 (12.8 ) 10.4 Long-term Risk Management Liabilities - Nonaffiliated 0.8 (0.7 ) 0.1 Total Liabilities 24.0 (13.5 ) 10.5 Total MTM Derivative Contract Net Assets $ 1.1 $ 0.6 $ 1.7 APCo Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 25.9 $ (10.3 ) $ 15.6 Long-term Risk Management Assets - Nonaffiliated 0.3 (0.2 ) 0.1 Total Assets 26.2 (10.5 ) 15.7 Current Risk Management Liabilities - Nonaffiliated 18.1 (13.3 ) 4.8 Long-term Risk Management Liabilities - Nonaffiliated 0.3 (0.2 ) 0.1 Total Liabilities 18.4 (13.5 ) 4.9 Total MTM Derivative Contract Net Assets $ 7.8 $ 3.0 $ 10.8 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. I&M Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 17.6 $ (8.5 ) $ 9.1 Long-term Risk Management Assets - Nonaffiliated 0.9 (0.5 ) 0.4 Total Assets 18.5 (9.0 ) 9.5 Current Risk Management Liabilities - Nonaffiliated 15.0 (8.6 ) 6.4 Long-term Risk Management Liabilities - Nonaffiliated 1.5 (0.5 ) 1.0 Total Liabilities 16.5 (9.1 ) 7.4 Total MTM Derivative Contract Net Assets $ 2.0 $ 0.1 $ 2.1 I&M Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 22.8 $ (10.5 ) $ 12.3 Long-term Risk Management Assets - Nonaffiliated 0.6 (0.6 ) — Total Assets 23.4 (11.1 ) 12.3 Current Risk Management Liabilities - Nonaffiliated 17.0 (10.7 ) 6.3 Long-term Risk Management Liabilities - Nonaffiliated 2.6 (1.0 ) 1.6 Total Liabilities 19.6 (11.7 ) 7.9 Total MTM Derivative Contract Net Assets $ 3.8 $ 0.6 $ 4.4 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. OPCo Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ — $ — $ — Long-term Risk Management Assets — — — Total Assets — — — Current Risk Management Liabilities 5.7 (0.2 ) 5.5 Long-term Risk Management Liabilities 5.8 — 5.8 Total Liabilities 11.5 (0.2 ) 11.3 Total MTM Derivative Contract Net Assets (Liabilities) $ (11.5 ) $ 0.2 $ (11.3 ) OPCo Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ — $ — $ — Long-term Risk Management Assets 19.2 — 19.2 Total Assets 19.2 — 19.2 Current Risk Management Liabilities 4.1 (0.5 ) 3.6 Long-term Risk Management Liabilities — — — Total Liabilities 4.1 (0.5 ) 3.6 Total MTM Derivative Contract Net Assets $ 15.1 $ 0.5 $ 15.6 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. PSO Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.7 $ — $ 0.7 Long-term Risk Management Assets — — — Total Assets 0.7 — 0.7 Current Risk Management Liabilities 0.3 (0.1 ) 0.2 Long-term Risk Management Liabilities — — — Total Liabilities 0.3 (0.1 ) 0.2 Total MTM Derivative Contract Net Assets $ 0.4 $ 0.1 $ 0.5 PSO Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.6 $ — $ 0.6 Long-term Risk Management Assets — — — Total Assets 0.6 — 0.6 Current Risk Management Liabilities 0.5 (0.3 ) 0.2 Long-term Risk Management Liabilities — — — Total Liabilities 0.5 (0.3 ) 0.2 Total MTM Derivative Contract Net Assets $ 0.1 $ 0.3 $ 0.4 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. SWEPCo Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.9 $ (0.1 ) $ 0.8 Long-term Risk Management Assets — — — Total Assets 0.9 (0.1 ) 0.8 Current Risk Management Liabilities 3.8 (0.3 ) 3.5 Long-term Risk Management Liabilities 1.8 — 1.8 Total Liabilities 5.6 (0.3 ) 5.3 Total MTM Derivative Contract Net Assets (Liabilities) $ (4.7 ) $ 0.2 $ (4.5 ) SWEPCo Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.8 $ — $ 0.8 Long-term Risk Management Assets — — — Total Assets 0.8 — 0.8 Current Risk Management Liabilities 3.4 (0.3 ) 3.1 Long-term Risk Management Liabilities 2.1 — 2.1 Total Liabilities 5.5 (0.3 ) 5.2 Total MTM Derivative Contract Net Assets (Liabilities) $ (4.7 ) $ 0.3 $ (4.4 ) (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. The tables below present the Registrants’ activity of derivative risk management contracts for the three months ended March 31, 2016 and 2015 : Amount of Gain (Loss) Recognized on Risk Management Contracts For the Three Months Ended March 31, 2016 Location of Gain (Loss) AEP APCo I&M OPCo PSO SWEPCo (in millions) Vertically Integrated Utilities Revenues $ 0.6 $ — $ — $ — $ — $ — Transmission and Distribution Utilities Revenues (3.5 ) — — — — — Generation & Marketing Revenues 19.8 — — — — — Electric Generation, Transmission and Distribution Revenues — (0.8 ) 1.6 (3.5 ) — — Sales to AEP Affiliates — 1.1 4.0 — — — Purchased Electricity for Resale 2.1 1.4 0.1 — — — Other Operation Expense (0.7 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Maintenance Expense (0.8 ) (0.2 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Regulatory Assets (a) (11.1 ) 0.2 0.3 (11.4 ) (0.5 ) 0.1 Regulatory Liabilities (a) 12.7 15.9 3.9 (15.2 ) — 4.5 Total Gain (Loss) on Risk Management Contracts $ 19.1 $ 17.5 $ 9.7 $ (30.3 ) $ (0.7 ) $ 4.4 Amount of Gain (Loss) Recognized on Risk Management Contracts For the Three Months Ended March 31, 2015 Location of Gain (Loss) AEP APCo I&M OPCo PSO SWEPCo (in millions) Vertically Integrated Utilities Revenues $ 4.4 $ — $ — $ — $ — $ — Generation & Marketing Revenues 48.8 — — — — — Electric Generation, Transmission and Distribution Revenues — 0.6 2.2 — — — Purchased Electricity for Resale 3.3 0.7 0.3 — — — Other Operation Expense (0.9 ) (0.1 ) (0.1 ) (0.2 ) (0.1 ) (0.1 ) Maintenance Expense (0.8 ) (0.2 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Regulatory Assets (a) (4.1 ) 0.7 (0.5 ) — (0.8 ) (3.5 ) Regulatory Liabilities (a) 3.9 1.7 (3.0 ) 4.7 — 3.9 Total Gain (Loss) on Risk Management Contracts $ 54.6 $ 3.4 $ (1.2 ) $ 4.4 $ (1.0 ) $ 0.2 (a) Represents realized and unrealized gains and losses subject to regulatory accounting treatment recorded as either current or noncurrent on the condensed balance sheets. Certain qualifying derivative instruments have been designated as normal purchase or normal sale contracts, as provided in the accounting guidance for “Derivatives and Hedging.” Derivative contracts that have been designated as normal purchases or normal sales under that accounting guidance are not subject to MTM accounting treatment and are recognized on the condensed statements of income on an accrual basis. The accounting for the changes in the fair value of a derivative instrument depends on whether it qualifies for and has been designated as part of a hedging relationship and further, on the type of hedging relationship. Depending on the exposure, management designates a hedging instrument as a fair value hedge or a cash flow hedge. For contracts that have not been designated as part of a hedging relationship, the accounting for changes in fair value depends on whether the derivative instrument is held for trading purposes. Unrealized and realized gains and losses on derivative instruments held for trading purposes are included in revenues on a net basis on the condensed statements of income. Unrealized and realized gains and losses on derivative instruments not held for trading purposes are included in revenues or expenses on the condensed statements of income depending on the relevant facts and circumstances. Certain derivatives that economically hedge future commodity risk are recorded in the same expense line item on the condensed statements of income as that of the associated risk. However, unrealized and some realized gains and losses in regulated jurisdictions for both trading and non-trading derivative instruments are recorded as regulatory assets (for losses) or regulatory liabilities (for gains) in accordance with the accounting guidance for “Regulated Operations.” In connection with OPCo’s June 2012 - May 2015 ESP, the PUCO ordered OPCo to conduct energy and capacity auctions for its entire SSO load for delivery beginning in June 2015, see Note 4 - Rate Matters. These auctions resulted in a range of products, including 12-month, 24-month, and 36-month periods. The delivery period for each contract is scheduled to start on the first day of June of each year, immediately following the auction. Certain affiliated Vertically Integrated Utility and Generation & Marketing segment entities participated in the auction process and were awarded tranches of OPCo’s SSO load. The underlying contracts are derivatives subject to the accounting guidance for “Derivatives and Hedging” and are accounted for using MTM accounting, unless the contract has been designated as a normal purchase or normal sale. Accounting for Fair Value Hedging Strategies (Applies to AEP) For fair value hedges (i.e. hedging the exposure to changes in the fair value of an asset, liability or an identified portion thereof attributable to a particular risk), the gain or loss on the derivative instrument as well as the offsetting gain or loss on the hedged item associated with the hedged risk impacts Net Income during the period of change. AEP records realized and unrealized gains or losses on interest rate swaps that qualify for fair value hedge accounting treatment and any offsetting changes in the fair value of the debt being hedged in Interest Expense on the condensed statements of income. The following table shows the results of hedging gains (losses) during the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 2015 (in millions) Gain on Fair Value Hedging Instruments $ 3.5 $ 4.5 Loss on Fair Value Portion of Long-term Debt (3.5 ) (4.5 ) During the three months ended March 31, 2016 and 2015 , hedge ineffectiveness was immaterial. Accounting for Cash Flow Hedging Strategies For cash flow hedges (i.e. hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the Registrants initially report the effective portion of the gain or loss on the derivative instrument as a component of Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets until the period the hedged item affects Net Income. The Registrants recognize any hedge ineffectiveness in Net Income immediately during the period of change, except in regulated jurisdictions where hedge ineffectiveness would be recorded as a regulatory asset (for losses) or a regulatory liability (for gains) if applicable. Realized gains and losses on derivative contracts for the purchase and sale of power designated as cash flow hedges are included in Total Revenues or Purchased Electricity for Resale on the condensed statements of income or in Regulatory Assets or Regulatory Liabilities on the condensed balance sheets, depending on the specific nature of the risk being hedged. During the three months ended March 31, 2016 and 2015 , AEP applied cash flow hedging to outstanding power derivatives. During the three months ended March 31, 2016 and 2015 , the Registrant Subsidiaries did not apply cash flow hedging to outstanding power derivatives. The Registrants reclassify gains and losses on interest rate derivative hedges related to debt financings from Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets into Interest Expense on the condensed statements of income in those periods in which hedged interest payments occur. During the three months ended March 31, 2016 and 2015 , AEP applied cash flow hedging to outstanding interest rate derivatives. During the three months ended March 31, 2016 and 2015 , the Registrant Subsidiaries did not apply cash flow hedging to outstanding interest rate derivatives. The accumulated gains or losses related to foreign currency hedges are reclassified from Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets into Depreciation and Amortization expense on the condensed statements of income over the depreciable lives of the fixed assets designated as the hedged items in qualifying foreign currency hedging relationships. During the three months ended March 31, 2016 and 2015 , the Registrants did not apply cash flow hedging to any outstanding foreign currency derivatives as cash flow hedges. During the three months ended March 31, 2016 and 2015 , hedge ineffectiveness was immaterial or nonexistent for all of the hedge strategies disclosed above. For details on effective cash flow hedges included in Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets and the reasons for changes in cash flow hedges, see Note 3 . Cash flow hedges included in Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets as of March 31, 2016 and December 31, 2015 were: Impact of Cash Flow Hedges on AEP’s Condensed Balance Sheets March 31, 2016 December 31, 2015 Company Commodity Interest Rate and Foreign Currency Commodity Interest Rate and Foreign Currency (in millions) Hedging Assets (a) $ 19.8 $ — $ 17.6 $ — Hedging Liabilities (a) 40.1 0.4 26.1 0.4 AOCI Loss Net of Tax (12.9 ) (16.9 ) (5.2 ) (17.2 ) Portion Expected to be Reclassified to Net Income During the Next Twelve Months (1.7 ) (1.4 ) (0.4 ) (1.5 ) (a) Hedging Assets and Hedging Liabilities are included in Risk Management Assets and Liabilities on the condensed balance sheets. As of March 31, 2016 the maximum length of time that AEP is hedging its exposure to variability in future cash flows related to forecasted transactions is 141 months. Impact of Cash Flow Hedges on the Registrant Subsidiaries’ Condensed Balance Sheets March 31, 2016 December 31, 2015 Interest Rate and Foreign Currency Company AOCI Gain (Loss) Net of Tax Expected to be Reclassified to Net Income During the Next Twelve Months AOCI Gain (Loss) Net of Tax Expected to be Reclassified to Net Income During the Next Twelve Months (in millions) APCo $ 3.4 $ 0.7 $ 3.6 $ 0.7 I&M (12.9 ) (1.3 ) (13.3 ) (1.3 ) OPCo 3.9 1.1 4.3 1.2 PSO 4.0 0.8 4.2 0.8 SWEPCo (8.6 ) (1.7 ) (9.1 ) (1.7 ) The actual amounts reclassified from Accumulated Other Comprehensive Income (Loss) to Net Income can differ from the estimate above due to market price changes. Credit Risk Management limits credit risk in wholesale marketing and trading activities by assessing the creditworthiness of potential counterparties before entering into transactions with them and continuing to evaluate their creditworthiness on an ongoing basis. Management uses Moody’s, Standard and Poor’s and current market-based qualitative and quantitative data as well as financial statements to assess the financial health of counterparties on an ongoing basis. Master agreements are typically used to facilitate the netting of cash flows associated with a single counterparty and may include collateral requirements. Collateral requirements in the form of cash, letters of credit and parental/affiliate guarantees may be obtained as security from counterparties in order to mitigate credit risk. A counterparty is required to post cash or letters of credit in the event exposure exceeds the established threshold. The threshold represents an unsecured credit limit which may be supported by a parental/affiliate guaranty, as determined in accordance with AEP’s credit policy. In addition, master agreements allow for termination and liquidation of all positions in the event of a failure or inability to post collateral. Collateral Triggering Events Credit Downgrade Triggers (Applies to AEP, APCo, I&M, PSO and SWEPCo) Under the tariffs of the RTOs and Independent System Operators (ISOs) and a limited number of derivative and non-derivative contracts primarily related to competitive retail auction loads, additional amounts of collateral are required if certain credit ratings decline below a specified rating threshold. The amount of collateral required fluctuates based on market prices and total exposure. On an ongoing basis, AEP’s risk management organization assesses the appropriateness of these collateral triggering items in contracts. AEP, APCo, I&M, PSO and SWEPCo have not experienced a downgrade below a specified rati |
Ohio Power Co [Member] | |
Derivatives and Hedging | DERIVATIVES AND HEDGING The disclosures in this note apply to all Registrants unless indicated otherwise. OBJECTIVES FOR UTILIZATION OF DERIVATIVE INSTRUMENTS AEPSC is agent for and transacts on behalf of AEP subsidiaries, including the Registrant Subsidiaries. AEPEP is agent for and transacts on behalf of other AEP subsidiaries. The Registrants are exposed to certain market risks as major power producers and participants in the electricity, capacity, natural gas, coal and emission allowance markets. These risks include commodity price risks which may be subject to capacity risk, interest rate risk, credit risk and, to a lesser extent, foreign currency exchange risk. These risks represent the risk of loss that may impact the Registrants due to changes in the underlying market prices or rates. Management utilizes derivative instruments to manage these risks. STRATEGIES FOR UTILIZATION OF DERIVATIVE INSTRUMENTS TO ACHIEVE OBJECTIVES Risk Management Strategies The strategy surrounding the use of derivative instruments primarily focuses on managing risk exposures, future cash flows and creating value utilizing both economic and formal hedging strategies. The risk management strategies also include the use of derivative instruments for trading purposes which focus on seizing market opportunities to create value driven by expected changes in the market prices of the commodities. To accomplish these objectives, the Registrants primarily employ risk management contracts including physical and financial forward purchase-and-sale contracts and, to a lesser extent, OTC swaps and options. Not all risk management contracts meet the definition of a derivative under the accounting guidance for “Derivatives and Hedging.” Derivative risk management contracts elected normal under the normal purchases and normal sales scope exception are not subject to the requirements of this accounting guidance. The Registrants utilize power, capacity, coal, natural gas, interest rate and, to a lesser extent, heating oil, gasoline and other commodity contracts to manage the risk associated with the energy business. The Registrants utilize interest rate derivative contracts in order to manage the interest rate exposure associated with the commodity portfolio. For disclosure purposes, such risks are grouped as “Commodity,” as these risks are related to energy risk management activities. The Registrants also utilize derivative contracts to manage interest rate risk associated with debt financing and foreign currency risk associated with future purchase obligations denominated in foreign currencies. For disclosure purposes, these risks are grouped as “Interest Rate and Foreign Currency.” The amount of risk taken is determined by the Commercial Operations, Energy Supply and Finance groups in accordance with established risk management policies as approved by the Finance Committee of the Board of Directors. The following tables represent the gross notional volume of the Registrants’ outstanding derivative contracts as of March 31, 2016 and December 31, 2015 : Notional Volume of Derivative Instruments March 31, 2016 Primary Risk Exposure Unit of Measure AEP APCo I&M OPCo PSO SWEPCo (in millions) Commodity: Power MWhs 272.7 25.0 13.9 11.6 4.8 5.9 Coal Tons 3.4 — 1.1 — — 2.3 Natural Gas MMBtus 42.7 0.3 0.2 — 0.2 0.2 Heating Oil and Gasoline Gallons 6.9 1.3 0.6 1.5 0.8 0.9 Interest Rate USD $ 101.9 $ 1.2 $ 0.8 $ — $ — $ — Interest Rate and Foreign Currency USD $ 559.3 $ — $ — $ — $ — $ — Notional Volume of Derivative Instruments December 31, 2015 Primary Risk Exposure Unit of Measure AEP APCo I&M OPCo PSO SWEPCo (in millions) Commodity: Power MWhs 317.8 40.9 22.8 13.3 11.3 14.0 Coal Tons 4.4 — 1.6 — — 2.8 Natural Gas MMBtus 38.2 0.3 0.2 — 0.2 0.2 Heating Oil and Gasoline Gallons 7.4 1.4 0.7 1.6 0.8 0.9 Interest Rate USD $ 113.5 $ 2.4 $ 1.6 $ — $ — $ — Interest Rate and Foreign Currency USD $ 560.3 $ — $ — $ — $ — $ — Fair Value Hedging Strategies (Applies to AEP) Parent enters into interest rate derivative transactions as part of an overall strategy to manage the mix of fixed-rate and floating-rate debt. Certain interest rate derivative transactions effectively modify exposure to interest rate risk by converting a portion of fixed-rate debt to a floating rate. Provided specific criteria are met, these interest rate derivatives are designated as fair value hedges. Cash Flow Hedging Strategies The Registrants utilize cash flow hedges on certain derivative transactions for the purchase and sale of power (“Commodity”) in order to manage the variable price risk related to forecasted purchases and sales. Management monitors the potential impacts of commodity price changes and, where appropriate, enters into derivative transactions to protect profit margins for a portion of future electricity sales and purchases. The Registrants do not hedge all commodity price risk. The Registrants utilize a variety of interest rate derivative transactions in order to manage interest rate risk exposure. The Registrants also utilize interest rate derivative contracts to manage interest rate exposure related to future borrowings of fixed-rate debt. The Registrants do not hedge all interest rate exposure. At times, the Registrants are exposed to foreign currency exchange rate risks primarily when some fixed assets are purchased from foreign suppliers. In accordance with AEP’s risk management policy, the Registrants may utilize foreign currency derivative transactions to protect against the risk of increased cash outflows resulting from a foreign currency’s appreciation against the dollar. The Registrants do not hedge all foreign currency exposure. ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND THE IMPACT ON THE FINANCIAL STATEMENTS The accounting guidance for “Derivatives and Hedging” requires recognition of all qualifying derivative instruments as either assets or liabilities on the condensed balance sheets at fair value. The fair values of derivative instruments accounted for using MTM accounting or hedge accounting are based on exchange prices and broker quotes. If a quoted market price is not available, the estimate of fair value is based on the best information available including valuation models that estimate future energy prices based on existing market and broker quotes, supply and demand market data and assumptions. In order to determine the relevant fair values of the derivative instruments, the Registrants apply valuation adjustments for discounting, liquidity and credit quality. Credit risk is the risk that a counterparty will fail to perform on the contract or fail to pay amounts due. Liquidity risk represents the risk that imperfections in the market will cause the price to vary from estimated fair value based upon prevailing market supply and demand conditions. Since energy markets are imperfect and volatile, there are inherent risks related to the underlying assumptions in models used to fair value risk management contracts. Unforeseen events may cause reasonable price curves to differ from actual price curves throughout a contract’s term and at the time a contract settles. Consequently, there could be significant adverse or favorable effects on future net income and cash flows if market prices are not consistent with management’s estimates of current market consensus for forward prices in the current period. This is particularly true for longer term contracts. Cash flows may vary based on market conditions, margin requirements and the timing of settlement of risk management contracts. According to the accounting guidance for “Derivatives and Hedging,” the Registrants reflect the fair values of derivative instruments subject to netting agreements with the same counterparty net of related cash collateral. For certain risk management contracts, the Registrants are required to post or receive cash collateral based on third party contractual agreements and risk profiles. For the March 31, 2016 and December 31, 2015 condensed balance sheets, the Registrants netted cash collateral received from third parties against short-term and long-term risk management assets and cash collateral paid to third parties against short-term and long-term risk management liabilities as follows: March 31, 2016 December 31, 2015 Company Cash Collateral Received Netted Against Risk Management Assets Cash Collateral Paid Netted Against Risk Management Liabilities Cash Collateral Received Netted Against Risk Management Assets Cash Collateral Paid Netted Against Risk Management Liabilities (in millions) AEP $ 11.8 $ 43.0 $ 5.8 $ 44.4 APCo — 0.6 — 3.1 I&M — 0.1 — 0.6 OPCo — 0.2 — 0.5 PSO — 0.1 — 0.3 SWEPCo — 0.2 — 0.3 The following tables represent the gross fair value of the Registrants’ derivative activity on the condensed balance sheets as of March 31, 2016 and December 31, 2015 : AEP Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts Hedging Contracts Gross Amounts of Risk Management Assets/ Liabilities Recognized Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location Commodity (a) Commodity (a) Interest Rate and Foreign Currency (a) (in millions) Current Risk Management Assets $ 425.9 $ 9.8 $ 0.9 $ 436.6 $ (292.8 ) $ 143.8 Long-term Risk Management Assets 390.1 13.5 — 403.6 (74.7 ) 328.9 Total Assets 816.0 23.3 0.9 840.2 (367.5 ) 472.7 Current Risk Management Liabilities 401.6 12.6 0.3 414.5 (310.2 ) 104.3 Long-term Risk Management Liabilities 264.6 31.0 0.5 296.1 (88.5 ) 207.6 Total Liabilities 666.2 43.6 0.8 710.6 (398.7 ) 311.9 Total MTM Derivative Contract Net Assets (Liabilities) $ 149.8 $ (20.3 ) $ 0.1 $ 129.6 $ 31.2 $ 160.8 AEP Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts Hedging Contracts Gross Amounts of Risk Management Assets/ Liabilities Recognized Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location Commodity (a) Commodity (a) Interest Rate and Foreign Currency (a) (in millions) Current Risk Management Assets $ 368.8 $ 8.2 $ 0.1 $ 377.1 $ (242.7 ) $ 134.4 Long-term Risk Management Assets 364.8 11.7 — 376.5 (54.7 ) 321.8 Total Assets 733.6 19.9 0.1 753.6 (297.4 ) 456.2 Current Risk Management Liabilities 347.0 9.1 0.3 356.4 (269.3 ) 87.1 Long-term Risk Management Liabilities 223.3 19.3 3.2 245.8 (66.7 ) 179.1 Total Liabilities 570.3 28.4 3.5 602.2 (336.0 ) 266.2 Total MTM Derivative Contract Net Assets (Liabilities) $ 163.3 $ (8.5 ) $ (3.4 ) $ 151.4 $ 38.6 $ 190.0 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts primarily include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. APCo Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 24.1 $ (12.2 ) $ 11.9 Long-term Risk Management Assets - Nonaffiliated 1.0 (0.7 ) 0.3 Total Assets 25.1 (12.9 ) 12.2 Current Risk Management Liabilities - Nonaffiliated 23.2 (12.8 ) 10.4 Long-term Risk Management Liabilities - Nonaffiliated 0.8 (0.7 ) 0.1 Total Liabilities 24.0 (13.5 ) 10.5 Total MTM Derivative Contract Net Assets $ 1.1 $ 0.6 $ 1.7 APCo Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 25.9 $ (10.3 ) $ 15.6 Long-term Risk Management Assets - Nonaffiliated 0.3 (0.2 ) 0.1 Total Assets 26.2 (10.5 ) 15.7 Current Risk Management Liabilities - Nonaffiliated 18.1 (13.3 ) 4.8 Long-term Risk Management Liabilities - Nonaffiliated 0.3 (0.2 ) 0.1 Total Liabilities 18.4 (13.5 ) 4.9 Total MTM Derivative Contract Net Assets $ 7.8 $ 3.0 $ 10.8 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. I&M Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 17.6 $ (8.5 ) $ 9.1 Long-term Risk Management Assets - Nonaffiliated 0.9 (0.5 ) 0.4 Total Assets 18.5 (9.0 ) 9.5 Current Risk Management Liabilities - Nonaffiliated 15.0 (8.6 ) 6.4 Long-term Risk Management Liabilities - Nonaffiliated 1.5 (0.5 ) 1.0 Total Liabilities 16.5 (9.1 ) 7.4 Total MTM Derivative Contract Net Assets $ 2.0 $ 0.1 $ 2.1 I&M Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 22.8 $ (10.5 ) $ 12.3 Long-term Risk Management Assets - Nonaffiliated 0.6 (0.6 ) — Total Assets 23.4 (11.1 ) 12.3 Current Risk Management Liabilities - Nonaffiliated 17.0 (10.7 ) 6.3 Long-term Risk Management Liabilities - Nonaffiliated 2.6 (1.0 ) 1.6 Total Liabilities 19.6 (11.7 ) 7.9 Total MTM Derivative Contract Net Assets $ 3.8 $ 0.6 $ 4.4 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. OPCo Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ — $ — $ — Long-term Risk Management Assets — — — Total Assets — — — Current Risk Management Liabilities 5.7 (0.2 ) 5.5 Long-term Risk Management Liabilities 5.8 — 5.8 Total Liabilities 11.5 (0.2 ) 11.3 Total MTM Derivative Contract Net Assets (Liabilities) $ (11.5 ) $ 0.2 $ (11.3 ) OPCo Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ — $ — $ — Long-term Risk Management Assets 19.2 — 19.2 Total Assets 19.2 — 19.2 Current Risk Management Liabilities 4.1 (0.5 ) 3.6 Long-term Risk Management Liabilities — — — Total Liabilities 4.1 (0.5 ) 3.6 Total MTM Derivative Contract Net Assets $ 15.1 $ 0.5 $ 15.6 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. PSO Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.7 $ — $ 0.7 Long-term Risk Management Assets — — — Total Assets 0.7 — 0.7 Current Risk Management Liabilities 0.3 (0.1 ) 0.2 Long-term Risk Management Liabilities — — — Total Liabilities 0.3 (0.1 ) 0.2 Total MTM Derivative Contract Net Assets $ 0.4 $ 0.1 $ 0.5 PSO Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.6 $ — $ 0.6 Long-term Risk Management Assets — — — Total Assets 0.6 — 0.6 Current Risk Management Liabilities 0.5 (0.3 ) 0.2 Long-term Risk Management Liabilities — — — Total Liabilities 0.5 (0.3 ) 0.2 Total MTM Derivative Contract Net Assets $ 0.1 $ 0.3 $ 0.4 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. SWEPCo Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.9 $ (0.1 ) $ 0.8 Long-term Risk Management Assets — — — Total Assets 0.9 (0.1 ) 0.8 Current Risk Management Liabilities 3.8 (0.3 ) 3.5 Long-term Risk Management Liabilities 1.8 — 1.8 Total Liabilities 5.6 (0.3 ) 5.3 Total MTM Derivative Contract Net Assets (Liabilities) $ (4.7 ) $ 0.2 $ (4.5 ) SWEPCo Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.8 $ — $ 0.8 Long-term Risk Management Assets — — — Total Assets 0.8 — 0.8 Current Risk Management Liabilities 3.4 (0.3 ) 3.1 Long-term Risk Management Liabilities 2.1 — 2.1 Total Liabilities 5.5 (0.3 ) 5.2 Total MTM Derivative Contract Net Assets (Liabilities) $ (4.7 ) $ 0.3 $ (4.4 ) (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. The tables below present the Registrants’ activity of derivative risk management contracts for the three months ended March 31, 2016 and 2015 : Amount of Gain (Loss) Recognized on Risk Management Contracts For the Three Months Ended March 31, 2016 Location of Gain (Loss) AEP APCo I&M OPCo PSO SWEPCo (in millions) Vertically Integrated Utilities Revenues $ 0.6 $ — $ — $ — $ — $ — Transmission and Distribution Utilities Revenues (3.5 ) — — — — — Generation & Marketing Revenues 19.8 — — — — — Electric Generation, Transmission and Distribution Revenues — (0.8 ) 1.6 (3.5 ) — — Sales to AEP Affiliates — 1.1 4.0 — — — Purchased Electricity for Resale 2.1 1.4 0.1 — — — Other Operation Expense (0.7 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Maintenance Expense (0.8 ) (0.2 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Regulatory Assets (a) (11.1 ) 0.2 0.3 (11.4 ) (0.5 ) 0.1 Regulatory Liabilities (a) 12.7 15.9 3.9 (15.2 ) — 4.5 Total Gain (Loss) on Risk Management Contracts $ 19.1 $ 17.5 $ 9.7 $ (30.3 ) $ (0.7 ) $ 4.4 Amount of Gain (Loss) Recognized on Risk Management Contracts For the Three Months Ended March 31, 2015 Location of Gain (Loss) AEP APCo I&M OPCo PSO SWEPCo (in millions) Vertically Integrated Utilities Revenues $ 4.4 $ — $ — $ — $ — $ — Generation & Marketing Revenues 48.8 — — — — — Electric Generation, Transmission and Distribution Revenues — 0.6 2.2 — — — Purchased Electricity for Resale 3.3 0.7 0.3 — — — Other Operation Expense (0.9 ) (0.1 ) (0.1 ) (0.2 ) (0.1 ) (0.1 ) Maintenance Expense (0.8 ) (0.2 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Regulatory Assets (a) (4.1 ) 0.7 (0.5 ) — (0.8 ) (3.5 ) Regulatory Liabilities (a) 3.9 1.7 (3.0 ) 4.7 — 3.9 Total Gain (Loss) on Risk Management Contracts $ 54.6 $ 3.4 $ (1.2 ) $ 4.4 $ (1.0 ) $ 0.2 (a) Represents realized and unrealized gains and losses subject to regulatory accounting treatment recorded as either current or noncurrent on the condensed balance sheets. Certain qualifying derivative instruments have been designated as normal purchase or normal sale contracts, as provided in the accounting guidance for “Derivatives and Hedging.” Derivative contracts that have been designated as normal purchases or normal sales under that accounting guidance are not subject to MTM accounting treatment and are recognized on the condensed statements of income on an accrual basis. The accounting for the changes in the fair value of a derivative instrument depends on whether it qualifies for and has been designated as part of a hedging relationship and further, on the type of hedging relationship. Depending on the exposure, management designates a hedging instrument as a fair value hedge or a cash flow hedge. For contracts that have not been designated as part of a hedging relationship, the accounting for changes in fair value depends on whether the derivative instrument is held for trading purposes. Unrealized and realized gains and losses on derivative instruments held for trading purposes are included in revenues on a net basis on the condensed statements of income. Unrealized and realized gains and losses on derivative instruments not held for trading purposes are included in revenues or expenses on the condensed statements of income depending on the relevant facts and circumstances. Certain derivatives that economically hedge future commodity risk are recorded in the same expense line item on the condensed statements of income as that of the associated risk. However, unrealized and some realized gains and losses in regulated jurisdictions for both trading and non-trading derivative instruments are recorded as regulatory assets (for losses) or regulatory liabilities (for gains) in accordance with the accounting guidance for “Regulated Operations.” In connection with OPCo’s June 2012 - May 2015 ESP, the PUCO ordered OPCo to conduct energy and capacity auctions for its entire SSO load for delivery beginning in June 2015, see Note 4 - Rate Matters. These auctions resulted in a range of products, including 12-month, 24-month, and 36-month periods. The delivery period for each contract is scheduled to start on the first day of June of each year, immediately following the auction. Certain affiliated Vertically Integrated Utility and Generation & Marketing segment entities participated in the auction process and were awarded tranches of OPCo’s SSO load. The underlying contracts are derivatives subject to the accounting guidance for “Derivatives and Hedging” and are accounted for using MTM accounting, unless the contract has been designated as a normal purchase or normal sale. Accounting for Fair Value Hedging Strategies (Applies to AEP) For fair value hedges (i.e. hedging the exposure to changes in the fair value of an asset, liability or an identified portion thereof attributable to a particular risk), the gain or loss on the derivative instrument as well as the offsetting gain or loss on the hedged item associated with the hedged risk impacts Net Income during the period of change. AEP records realized and unrealized gains or losses on interest rate swaps that qualify for fair value hedge accounting treatment and any offsetting changes in the fair value of the debt being hedged in Interest Expense on the condensed statements of income. The following table shows the results of hedging gains (losses) during the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 2015 (in millions) Gain on Fair Value Hedging Instruments $ 3.5 $ 4.5 Loss on Fair Value Portion of Long-term Debt (3.5 ) (4.5 ) During the three months ended March 31, 2016 and 2015 , hedge ineffectiveness was immaterial. Accounting for Cash Flow Hedging Strategies For cash flow hedges (i.e. hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the Registrants initially report the effective portion of the gain or loss on the derivative instrument as a component of Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets until the period the hedged item affects Net Income. The Registrants recognize any hedge ineffectiveness in Net Income immediately during the period of change, except in regulated jurisdictions where hedge ineffectiveness would be recorded as a regulatory asset (for losses) or a regulatory liability (for gains) if applicable. Realized gains and losses on derivative contracts for the purchase and sale of power designated as cash flow hedges are included in Total Revenues or Purchased Electricity for Resale on the condensed statements of income or in Regulatory Assets or Regulatory Liabilities on the condensed balance sheets, depending on the specific nature of the risk being hedged. During the three months ended March 31, 2016 and 2015 , AEP applied cash flow hedging to outstanding power derivatives. During the three months ended March 31, 2016 and 2015 , the Registrant Subsidiaries did not apply cash flow hedging to outstanding power derivatives. The Registrants reclassify gains and losses on interest rate derivative hedges related to debt financings from Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets into Interest Expense on the condensed statements of income in those periods in which hedged interest payments occur. During the three months ended March 31, 2016 and 2015 , AEP applied cash flow hedging to outstanding interest rate derivatives. During the three months ended March 31, 2016 and 2015 , the Registrant Subsidiaries did not apply cash flow hedging to outstanding interest rate derivatives. The accumulated gains or losses related to foreign currency hedges are reclassified from Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets into Depreciation and Amortization expense on the condensed statements of income over the depreciable lives of the fixed assets designated as the hedged items in qualifying foreign currency hedging relationships. During the three months ended March 31, 2016 and 2015 , the Registrants did not apply cash flow hedging to any outstanding foreign currency derivatives as cash flow hedges. During the three months ended March 31, 2016 and 2015 , hedge ineffectiveness was immaterial or nonexistent for all of the hedge strategies disclosed above. For details on effective cash flow hedges included in Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets and the reasons for changes in cash flow hedges, see Note 3 . Cash flow hedges included in Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets as of March 31, 2016 and December 31, 2015 were: Impact of Cash Flow Hedges on AEP’s Condensed Balance Sheets March 31, 2016 December 31, 2015 Company Commodity Interest Rate and Foreign Currency Commodity Interest Rate and Foreign Currency (in millions) Hedging Assets (a) $ 19.8 $ — $ 17.6 $ — Hedging Liabilities (a) 40.1 0.4 26.1 0.4 AOCI Loss Net of Tax (12.9 ) (16.9 ) (5.2 ) (17.2 ) Portion Expected to be Reclassified to Net Income During the Next Twelve Months (1.7 ) (1.4 ) (0.4 ) (1.5 ) (a) Hedging Assets and Hedging Liabilities are included in Risk Management Assets and Liabilities on the condensed balance sheets. As of March 31, 2016 the maximum length of time that AEP is hedging its exposure to variability in future cash flows related to forecasted transactions is 141 months. Impact of Cash Flow Hedges on the Registrant Subsidiaries’ Condensed Balance Sheets March 31, 2016 December 31, 2015 Interest Rate and Foreign Currency Company AOCI Gain (Loss) Net of Tax Expected to be Reclassified to Net Income During the Next Twelve Months AOCI Gain (Loss) Net of Tax Expected to be Reclassified to Net Income During the Next Twelve Months (in millions) APCo $ 3.4 $ 0.7 $ 3.6 $ 0.7 I&M (12.9 ) (1.3 ) (13.3 ) (1.3 ) OPCo 3.9 1.1 4.3 1.2 PSO 4.0 0.8 4.2 0.8 SWEPCo (8.6 ) (1.7 ) (9.1 ) (1.7 ) The actual amounts reclassified from Accumulated Other Comprehensive Income (Loss) to Net Income can differ from the estimate above due to market price changes. Credit Risk Management limits credit risk in wholesale marketing and trading activities by assessing the creditworthiness of potential counterparties before entering into transactions with them and continuing to evaluate their creditworthiness on an ongoing basis. Management uses Moody’s, Standard and Poor’s and current market-based qualitative and quantitative data as well as financial statements to assess the financial health of counterparties on an ongoing basis. Master agreements are typically used to facilitate the netting of cash flows associated with a single counterparty and may include collateral requirements. Collateral requirements in the form of cash, letters of credit and parental/affiliate guarantees may be obtained as security from counterparties in order to mitigate credit risk. A counterparty is required to post cash or letters of credit in the event exposure exceeds the established threshold. The threshold represents an unsecured credit limit which may be supported by a parental/affiliate guaranty, as determined in accordance with AEP’s credit policy. In addition, master agreements allow for termination and liquidation of all positions in the event of a failure or inability to post collateral. Collateral Triggering Events Credit Downgrade Triggers (Applies to AEP, APCo, I&M, PSO and SWEPCo) Under the tariffs of the RTOs and Independent System Operators (ISOs) and a limited number of derivative and non-derivative contracts primarily related to competitive retail auction loads, additional amounts of collateral are required if certain credit ratings decline below a specified rating threshold. The amount of collateral required fluctuates based on market prices and total exposure. On an ongoing basis, AEP’s risk management organization assesses the appropriateness of these collateral triggering items in contracts. AEP, APCo, I&M, PSO and SWEPCo have not experienced a downgrade below a specified rati |
Public Service Co Of Oklahoma [Member] | |
Derivatives and Hedging | DERIVATIVES AND HEDGING The disclosures in this note apply to all Registrants unless indicated otherwise. OBJECTIVES FOR UTILIZATION OF DERIVATIVE INSTRUMENTS AEPSC is agent for and transacts on behalf of AEP subsidiaries, including the Registrant Subsidiaries. AEPEP is agent for and transacts on behalf of other AEP subsidiaries. The Registrants are exposed to certain market risks as major power producers and participants in the electricity, capacity, natural gas, coal and emission allowance markets. These risks include commodity price risks which may be subject to capacity risk, interest rate risk, credit risk and, to a lesser extent, foreign currency exchange risk. These risks represent the risk of loss that may impact the Registrants due to changes in the underlying market prices or rates. Management utilizes derivative instruments to manage these risks. STRATEGIES FOR UTILIZATION OF DERIVATIVE INSTRUMENTS TO ACHIEVE OBJECTIVES Risk Management Strategies The strategy surrounding the use of derivative instruments primarily focuses on managing risk exposures, future cash flows and creating value utilizing both economic and formal hedging strategies. The risk management strategies also include the use of derivative instruments for trading purposes which focus on seizing market opportunities to create value driven by expected changes in the market prices of the commodities. To accomplish these objectives, the Registrants primarily employ risk management contracts including physical and financial forward purchase-and-sale contracts and, to a lesser extent, OTC swaps and options. Not all risk management contracts meet the definition of a derivative under the accounting guidance for “Derivatives and Hedging.” Derivative risk management contracts elected normal under the normal purchases and normal sales scope exception are not subject to the requirements of this accounting guidance. The Registrants utilize power, capacity, coal, natural gas, interest rate and, to a lesser extent, heating oil, gasoline and other commodity contracts to manage the risk associated with the energy business. The Registrants utilize interest rate derivative contracts in order to manage the interest rate exposure associated with the commodity portfolio. For disclosure purposes, such risks are grouped as “Commodity,” as these risks are related to energy risk management activities. The Registrants also utilize derivative contracts to manage interest rate risk associated with debt financing and foreign currency risk associated with future purchase obligations denominated in foreign currencies. For disclosure purposes, these risks are grouped as “Interest Rate and Foreign Currency.” The amount of risk taken is determined by the Commercial Operations, Energy Supply and Finance groups in accordance with established risk management policies as approved by the Finance Committee of the Board of Directors. The following tables represent the gross notional volume of the Registrants’ outstanding derivative contracts as of March 31, 2016 and December 31, 2015 : Notional Volume of Derivative Instruments March 31, 2016 Primary Risk Exposure Unit of Measure AEP APCo I&M OPCo PSO SWEPCo (in millions) Commodity: Power MWhs 272.7 25.0 13.9 11.6 4.8 5.9 Coal Tons 3.4 — 1.1 — — 2.3 Natural Gas MMBtus 42.7 0.3 0.2 — 0.2 0.2 Heating Oil and Gasoline Gallons 6.9 1.3 0.6 1.5 0.8 0.9 Interest Rate USD $ 101.9 $ 1.2 $ 0.8 $ — $ — $ — Interest Rate and Foreign Currency USD $ 559.3 $ — $ — $ — $ — $ — Notional Volume of Derivative Instruments December 31, 2015 Primary Risk Exposure Unit of Measure AEP APCo I&M OPCo PSO SWEPCo (in millions) Commodity: Power MWhs 317.8 40.9 22.8 13.3 11.3 14.0 Coal Tons 4.4 — 1.6 — — 2.8 Natural Gas MMBtus 38.2 0.3 0.2 — 0.2 0.2 Heating Oil and Gasoline Gallons 7.4 1.4 0.7 1.6 0.8 0.9 Interest Rate USD $ 113.5 $ 2.4 $ 1.6 $ — $ — $ — Interest Rate and Foreign Currency USD $ 560.3 $ — $ — $ — $ — $ — Fair Value Hedging Strategies (Applies to AEP) Parent enters into interest rate derivative transactions as part of an overall strategy to manage the mix of fixed-rate and floating-rate debt. Certain interest rate derivative transactions effectively modify exposure to interest rate risk by converting a portion of fixed-rate debt to a floating rate. Provided specific criteria are met, these interest rate derivatives are designated as fair value hedges. Cash Flow Hedging Strategies The Registrants utilize cash flow hedges on certain derivative transactions for the purchase and sale of power (“Commodity”) in order to manage the variable price risk related to forecasted purchases and sales. Management monitors the potential impacts of commodity price changes and, where appropriate, enters into derivative transactions to protect profit margins for a portion of future electricity sales and purchases. The Registrants do not hedge all commodity price risk. The Registrants utilize a variety of interest rate derivative transactions in order to manage interest rate risk exposure. The Registrants also utilize interest rate derivative contracts to manage interest rate exposure related to future borrowings of fixed-rate debt. The Registrants do not hedge all interest rate exposure. At times, the Registrants are exposed to foreign currency exchange rate risks primarily when some fixed assets are purchased from foreign suppliers. In accordance with AEP’s risk management policy, the Registrants may utilize foreign currency derivative transactions to protect against the risk of increased cash outflows resulting from a foreign currency’s appreciation against the dollar. The Registrants do not hedge all foreign currency exposure. ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND THE IMPACT ON THE FINANCIAL STATEMENTS The accounting guidance for “Derivatives and Hedging” requires recognition of all qualifying derivative instruments as either assets or liabilities on the condensed balance sheets at fair value. The fair values of derivative instruments accounted for using MTM accounting or hedge accounting are based on exchange prices and broker quotes. If a quoted market price is not available, the estimate of fair value is based on the best information available including valuation models that estimate future energy prices based on existing market and broker quotes, supply and demand market data and assumptions. In order to determine the relevant fair values of the derivative instruments, the Registrants apply valuation adjustments for discounting, liquidity and credit quality. Credit risk is the risk that a counterparty will fail to perform on the contract or fail to pay amounts due. Liquidity risk represents the risk that imperfections in the market will cause the price to vary from estimated fair value based upon prevailing market supply and demand conditions. Since energy markets are imperfect and volatile, there are inherent risks related to the underlying assumptions in models used to fair value risk management contracts. Unforeseen events may cause reasonable price curves to differ from actual price curves throughout a contract’s term and at the time a contract settles. Consequently, there could be significant adverse or favorable effects on future net income and cash flows if market prices are not consistent with management’s estimates of current market consensus for forward prices in the current period. This is particularly true for longer term contracts. Cash flows may vary based on market conditions, margin requirements and the timing of settlement of risk management contracts. According to the accounting guidance for “Derivatives and Hedging,” the Registrants reflect the fair values of derivative instruments subject to netting agreements with the same counterparty net of related cash collateral. For certain risk management contracts, the Registrants are required to post or receive cash collateral based on third party contractual agreements and risk profiles. For the March 31, 2016 and December 31, 2015 condensed balance sheets, the Registrants netted cash collateral received from third parties against short-term and long-term risk management assets and cash collateral paid to third parties against short-term and long-term risk management liabilities as follows: March 31, 2016 December 31, 2015 Company Cash Collateral Received Netted Against Risk Management Assets Cash Collateral Paid Netted Against Risk Management Liabilities Cash Collateral Received Netted Against Risk Management Assets Cash Collateral Paid Netted Against Risk Management Liabilities (in millions) AEP $ 11.8 $ 43.0 $ 5.8 $ 44.4 APCo — 0.6 — 3.1 I&M — 0.1 — 0.6 OPCo — 0.2 — 0.5 PSO — 0.1 — 0.3 SWEPCo — 0.2 — 0.3 The following tables represent the gross fair value of the Registrants’ derivative activity on the condensed balance sheets as of March 31, 2016 and December 31, 2015 : AEP Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts Hedging Contracts Gross Amounts of Risk Management Assets/ Liabilities Recognized Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location Commodity (a) Commodity (a) Interest Rate and Foreign Currency (a) (in millions) Current Risk Management Assets $ 425.9 $ 9.8 $ 0.9 $ 436.6 $ (292.8 ) $ 143.8 Long-term Risk Management Assets 390.1 13.5 — 403.6 (74.7 ) 328.9 Total Assets 816.0 23.3 0.9 840.2 (367.5 ) 472.7 Current Risk Management Liabilities 401.6 12.6 0.3 414.5 (310.2 ) 104.3 Long-term Risk Management Liabilities 264.6 31.0 0.5 296.1 (88.5 ) 207.6 Total Liabilities 666.2 43.6 0.8 710.6 (398.7 ) 311.9 Total MTM Derivative Contract Net Assets (Liabilities) $ 149.8 $ (20.3 ) $ 0.1 $ 129.6 $ 31.2 $ 160.8 AEP Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts Hedging Contracts Gross Amounts of Risk Management Assets/ Liabilities Recognized Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location Commodity (a) Commodity (a) Interest Rate and Foreign Currency (a) (in millions) Current Risk Management Assets $ 368.8 $ 8.2 $ 0.1 $ 377.1 $ (242.7 ) $ 134.4 Long-term Risk Management Assets 364.8 11.7 — 376.5 (54.7 ) 321.8 Total Assets 733.6 19.9 0.1 753.6 (297.4 ) 456.2 Current Risk Management Liabilities 347.0 9.1 0.3 356.4 (269.3 ) 87.1 Long-term Risk Management Liabilities 223.3 19.3 3.2 245.8 (66.7 ) 179.1 Total Liabilities 570.3 28.4 3.5 602.2 (336.0 ) 266.2 Total MTM Derivative Contract Net Assets (Liabilities) $ 163.3 $ (8.5 ) $ (3.4 ) $ 151.4 $ 38.6 $ 190.0 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts primarily include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. APCo Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 24.1 $ (12.2 ) $ 11.9 Long-term Risk Management Assets - Nonaffiliated 1.0 (0.7 ) 0.3 Total Assets 25.1 (12.9 ) 12.2 Current Risk Management Liabilities - Nonaffiliated 23.2 (12.8 ) 10.4 Long-term Risk Management Liabilities - Nonaffiliated 0.8 (0.7 ) 0.1 Total Liabilities 24.0 (13.5 ) 10.5 Total MTM Derivative Contract Net Assets $ 1.1 $ 0.6 $ 1.7 APCo Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 25.9 $ (10.3 ) $ 15.6 Long-term Risk Management Assets - Nonaffiliated 0.3 (0.2 ) 0.1 Total Assets 26.2 (10.5 ) 15.7 Current Risk Management Liabilities - Nonaffiliated 18.1 (13.3 ) 4.8 Long-term Risk Management Liabilities - Nonaffiliated 0.3 (0.2 ) 0.1 Total Liabilities 18.4 (13.5 ) 4.9 Total MTM Derivative Contract Net Assets $ 7.8 $ 3.0 $ 10.8 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. I&M Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 17.6 $ (8.5 ) $ 9.1 Long-term Risk Management Assets - Nonaffiliated 0.9 (0.5 ) 0.4 Total Assets 18.5 (9.0 ) 9.5 Current Risk Management Liabilities - Nonaffiliated 15.0 (8.6 ) 6.4 Long-term Risk Management Liabilities - Nonaffiliated 1.5 (0.5 ) 1.0 Total Liabilities 16.5 (9.1 ) 7.4 Total MTM Derivative Contract Net Assets $ 2.0 $ 0.1 $ 2.1 I&M Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 22.8 $ (10.5 ) $ 12.3 Long-term Risk Management Assets - Nonaffiliated 0.6 (0.6 ) — Total Assets 23.4 (11.1 ) 12.3 Current Risk Management Liabilities - Nonaffiliated 17.0 (10.7 ) 6.3 Long-term Risk Management Liabilities - Nonaffiliated 2.6 (1.0 ) 1.6 Total Liabilities 19.6 (11.7 ) 7.9 Total MTM Derivative Contract Net Assets $ 3.8 $ 0.6 $ 4.4 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. OPCo Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ — $ — $ — Long-term Risk Management Assets — — — Total Assets — — — Current Risk Management Liabilities 5.7 (0.2 ) 5.5 Long-term Risk Management Liabilities 5.8 — 5.8 Total Liabilities 11.5 (0.2 ) 11.3 Total MTM Derivative Contract Net Assets (Liabilities) $ (11.5 ) $ 0.2 $ (11.3 ) OPCo Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ — $ — $ — Long-term Risk Management Assets 19.2 — 19.2 Total Assets 19.2 — 19.2 Current Risk Management Liabilities 4.1 (0.5 ) 3.6 Long-term Risk Management Liabilities — — — Total Liabilities 4.1 (0.5 ) 3.6 Total MTM Derivative Contract Net Assets $ 15.1 $ 0.5 $ 15.6 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. PSO Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.7 $ — $ 0.7 Long-term Risk Management Assets — — — Total Assets 0.7 — 0.7 Current Risk Management Liabilities 0.3 (0.1 ) 0.2 Long-term Risk Management Liabilities — — — Total Liabilities 0.3 (0.1 ) 0.2 Total MTM Derivative Contract Net Assets $ 0.4 $ 0.1 $ 0.5 PSO Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.6 $ — $ 0.6 Long-term Risk Management Assets — — — Total Assets 0.6 — 0.6 Current Risk Management Liabilities 0.5 (0.3 ) 0.2 Long-term Risk Management Liabilities — — — Total Liabilities 0.5 (0.3 ) 0.2 Total MTM Derivative Contract Net Assets $ 0.1 $ 0.3 $ 0.4 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. SWEPCo Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.9 $ (0.1 ) $ 0.8 Long-term Risk Management Assets — — — Total Assets 0.9 (0.1 ) 0.8 Current Risk Management Liabilities 3.8 (0.3 ) 3.5 Long-term Risk Management Liabilities 1.8 — 1.8 Total Liabilities 5.6 (0.3 ) 5.3 Total MTM Derivative Contract Net Assets (Liabilities) $ (4.7 ) $ 0.2 $ (4.5 ) SWEPCo Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.8 $ — $ 0.8 Long-term Risk Management Assets — — — Total Assets 0.8 — 0.8 Current Risk Management Liabilities 3.4 (0.3 ) 3.1 Long-term Risk Management Liabilities 2.1 — 2.1 Total Liabilities 5.5 (0.3 ) 5.2 Total MTM Derivative Contract Net Assets (Liabilities) $ (4.7 ) $ 0.3 $ (4.4 ) (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. The tables below present the Registrants’ activity of derivative risk management contracts for the three months ended March 31, 2016 and 2015 : Amount of Gain (Loss) Recognized on Risk Management Contracts For the Three Months Ended March 31, 2016 Location of Gain (Loss) AEP APCo I&M OPCo PSO SWEPCo (in millions) Vertically Integrated Utilities Revenues $ 0.6 $ — $ — $ — $ — $ — Transmission and Distribution Utilities Revenues (3.5 ) — — — — — Generation & Marketing Revenues 19.8 — — — — — Electric Generation, Transmission and Distribution Revenues — (0.8 ) 1.6 (3.5 ) — — Sales to AEP Affiliates — 1.1 4.0 — — — Purchased Electricity for Resale 2.1 1.4 0.1 — — — Other Operation Expense (0.7 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Maintenance Expense (0.8 ) (0.2 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Regulatory Assets (a) (11.1 ) 0.2 0.3 (11.4 ) (0.5 ) 0.1 Regulatory Liabilities (a) 12.7 15.9 3.9 (15.2 ) — 4.5 Total Gain (Loss) on Risk Management Contracts $ 19.1 $ 17.5 $ 9.7 $ (30.3 ) $ (0.7 ) $ 4.4 Amount of Gain (Loss) Recognized on Risk Management Contracts For the Three Months Ended March 31, 2015 Location of Gain (Loss) AEP APCo I&M OPCo PSO SWEPCo (in millions) Vertically Integrated Utilities Revenues $ 4.4 $ — $ — $ — $ — $ — Generation & Marketing Revenues 48.8 — — — — — Electric Generation, Transmission and Distribution Revenues — 0.6 2.2 — — — Purchased Electricity for Resale 3.3 0.7 0.3 — — — Other Operation Expense (0.9 ) (0.1 ) (0.1 ) (0.2 ) (0.1 ) (0.1 ) Maintenance Expense (0.8 ) (0.2 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Regulatory Assets (a) (4.1 ) 0.7 (0.5 ) — (0.8 ) (3.5 ) Regulatory Liabilities (a) 3.9 1.7 (3.0 ) 4.7 — 3.9 Total Gain (Loss) on Risk Management Contracts $ 54.6 $ 3.4 $ (1.2 ) $ 4.4 $ (1.0 ) $ 0.2 (a) Represents realized and unrealized gains and losses subject to regulatory accounting treatment recorded as either current or noncurrent on the condensed balance sheets. Certain qualifying derivative instruments have been designated as normal purchase or normal sale contracts, as provided in the accounting guidance for “Derivatives and Hedging.” Derivative contracts that have been designated as normal purchases or normal sales under that accounting guidance are not subject to MTM accounting treatment and are recognized on the condensed statements of income on an accrual basis. The accounting for the changes in the fair value of a derivative instrument depends on whether it qualifies for and has been designated as part of a hedging relationship and further, on the type of hedging relationship. Depending on the exposure, management designates a hedging instrument as a fair value hedge or a cash flow hedge. For contracts that have not been designated as part of a hedging relationship, the accounting for changes in fair value depends on whether the derivative instrument is held for trading purposes. Unrealized and realized gains and losses on derivative instruments held for trading purposes are included in revenues on a net basis on the condensed statements of income. Unrealized and realized gains and losses on derivative instruments not held for trading purposes are included in revenues or expenses on the condensed statements of income depending on the relevant facts and circumstances. Certain derivatives that economically hedge future commodity risk are recorded in the same expense line item on the condensed statements of income as that of the associated risk. However, unrealized and some realized gains and losses in regulated jurisdictions for both trading and non-trading derivative instruments are recorded as regulatory assets (for losses) or regulatory liabilities (for gains) in accordance with the accounting guidance for “Regulated Operations.” In connection with OPCo’s June 2012 - May 2015 ESP, the PUCO ordered OPCo to conduct energy and capacity auctions for its entire SSO load for delivery beginning in June 2015, see Note 4 - Rate Matters. These auctions resulted in a range of products, including 12-month, 24-month, and 36-month periods. The delivery period for each contract is scheduled to start on the first day of June of each year, immediately following the auction. Certain affiliated Vertically Integrated Utility and Generation & Marketing segment entities participated in the auction process and were awarded tranches of OPCo’s SSO load. The underlying contracts are derivatives subject to the accounting guidance for “Derivatives and Hedging” and are accounted for using MTM accounting, unless the contract has been designated as a normal purchase or normal sale. Accounting for Fair Value Hedging Strategies (Applies to AEP) For fair value hedges (i.e. hedging the exposure to changes in the fair value of an asset, liability or an identified portion thereof attributable to a particular risk), the gain or loss on the derivative instrument as well as the offsetting gain or loss on the hedged item associated with the hedged risk impacts Net Income during the period of change. AEP records realized and unrealized gains or losses on interest rate swaps that qualify for fair value hedge accounting treatment and any offsetting changes in the fair value of the debt being hedged in Interest Expense on the condensed statements of income. The following table shows the results of hedging gains (losses) during the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 2015 (in millions) Gain on Fair Value Hedging Instruments $ 3.5 $ 4.5 Loss on Fair Value Portion of Long-term Debt (3.5 ) (4.5 ) During the three months ended March 31, 2016 and 2015 , hedge ineffectiveness was immaterial. Accounting for Cash Flow Hedging Strategies For cash flow hedges (i.e. hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the Registrants initially report the effective portion of the gain or loss on the derivative instrument as a component of Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets until the period the hedged item affects Net Income. The Registrants recognize any hedge ineffectiveness in Net Income immediately during the period of change, except in regulated jurisdictions where hedge ineffectiveness would be recorded as a regulatory asset (for losses) or a regulatory liability (for gains) if applicable. Realized gains and losses on derivative contracts for the purchase and sale of power designated as cash flow hedges are included in Total Revenues or Purchased Electricity for Resale on the condensed statements of income or in Regulatory Assets or Regulatory Liabilities on the condensed balance sheets, depending on the specific nature of the risk being hedged. During the three months ended March 31, 2016 and 2015 , AEP applied cash flow hedging to outstanding power derivatives. During the three months ended March 31, 2016 and 2015 , the Registrant Subsidiaries did not apply cash flow hedging to outstanding power derivatives. The Registrants reclassify gains and losses on interest rate derivative hedges related to debt financings from Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets into Interest Expense on the condensed statements of income in those periods in which hedged interest payments occur. During the three months ended March 31, 2016 and 2015 , AEP applied cash flow hedging to outstanding interest rate derivatives. During the three months ended March 31, 2016 and 2015 , the Registrant Subsidiaries did not apply cash flow hedging to outstanding interest rate derivatives. The accumulated gains or losses related to foreign currency hedges are reclassified from Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets into Depreciation and Amortization expense on the condensed statements of income over the depreciable lives of the fixed assets designated as the hedged items in qualifying foreign currency hedging relationships. During the three months ended March 31, 2016 and 2015 , the Registrants did not apply cash flow hedging to any outstanding foreign currency derivatives as cash flow hedges. During the three months ended March 31, 2016 and 2015 , hedge ineffectiveness was immaterial or nonexistent for all of the hedge strategies disclosed above. For details on effective cash flow hedges included in Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets and the reasons for changes in cash flow hedges, see Note 3 . Cash flow hedges included in Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets as of March 31, 2016 and December 31, 2015 were: Impact of Cash Flow Hedges on AEP’s Condensed Balance Sheets March 31, 2016 December 31, 2015 Company Commodity Interest Rate and Foreign Currency Commodity Interest Rate and Foreign Currency (in millions) Hedging Assets (a) $ 19.8 $ — $ 17.6 $ — Hedging Liabilities (a) 40.1 0.4 26.1 0.4 AOCI Loss Net of Tax (12.9 ) (16.9 ) (5.2 ) (17.2 ) Portion Expected to be Reclassified to Net Income During the Next Twelve Months (1.7 ) (1.4 ) (0.4 ) (1.5 ) (a) Hedging Assets and Hedging Liabilities are included in Risk Management Assets and Liabilities on the condensed balance sheets. As of March 31, 2016 the maximum length of time that AEP is hedging its exposure to variability in future cash flows related to forecasted transactions is 141 months. Impact of Cash Flow Hedges on the Registrant Subsidiaries’ Condensed Balance Sheets March 31, 2016 December 31, 2015 Interest Rate and Foreign Currency Company AOCI Gain (Loss) Net of Tax Expected to be Reclassified to Net Income During the Next Twelve Months AOCI Gain (Loss) Net of Tax Expected to be Reclassified to Net Income During the Next Twelve Months (in millions) APCo $ 3.4 $ 0.7 $ 3.6 $ 0.7 I&M (12.9 ) (1.3 ) (13.3 ) (1.3 ) OPCo 3.9 1.1 4.3 1.2 PSO 4.0 0.8 4.2 0.8 SWEPCo (8.6 ) (1.7 ) (9.1 ) (1.7 ) The actual amounts reclassified from Accumulated Other Comprehensive Income (Loss) to Net Income can differ from the estimate above due to market price changes. Credit Risk Management limits credit risk in wholesale marketing and trading activities by assessing the creditworthiness of potential counterparties before entering into transactions with them and continuing to evaluate their creditworthiness on an ongoing basis. Management uses Moody’s, Standard and Poor’s and current market-based qualitative and quantitative data as well as financial statements to assess the financial health of counterparties on an ongoing basis. Master agreements are typically used to facilitate the netting of cash flows associated with a single counterparty and may include collateral requirements. Collateral requirements in the form of cash, letters of credit and parental/affiliate guarantees may be obtained as security from counterparties in order to mitigate credit risk. A counterparty is required to post cash or letters of credit in the event exposure exceeds the established threshold. The threshold represents an unsecured credit limit which may be supported by a parental/affiliate guaranty, as determined in accordance with AEP’s credit policy. In addition, master agreements allow for termination and liquidation of all positions in the event of a failure or inability to post collateral. Collateral Triggering Events Credit Downgrade Triggers (Applies to AEP, APCo, I&M, PSO and SWEPCo) Under the tariffs of the RTOs and Independent System Operators (ISOs) and a limited number of derivative and non-derivative contracts primarily related to competitive retail auction loads, additional amounts of collateral are required if certain credit ratings decline below a specified rating threshold. The amount of collateral required fluctuates based on market prices and total exposure. On an ongoing basis, AEP’s risk management organization assesses the appropriateness of these collateral triggering items in contracts. AEP, APCo, I&M, PSO and SWEPCo have not experienced a downgrade below a specified rati |
Southwestern Electric Power Co [Member] | |
Derivatives and Hedging | DERIVATIVES AND HEDGING The disclosures in this note apply to all Registrants unless indicated otherwise. OBJECTIVES FOR UTILIZATION OF DERIVATIVE INSTRUMENTS AEPSC is agent for and transacts on behalf of AEP subsidiaries, including the Registrant Subsidiaries. AEPEP is agent for and transacts on behalf of other AEP subsidiaries. The Registrants are exposed to certain market risks as major power producers and participants in the electricity, capacity, natural gas, coal and emission allowance markets. These risks include commodity price risks which may be subject to capacity risk, interest rate risk, credit risk and, to a lesser extent, foreign currency exchange risk. These risks represent the risk of loss that may impact the Registrants due to changes in the underlying market prices or rates. Management utilizes derivative instruments to manage these risks. STRATEGIES FOR UTILIZATION OF DERIVATIVE INSTRUMENTS TO ACHIEVE OBJECTIVES Risk Management Strategies The strategy surrounding the use of derivative instruments primarily focuses on managing risk exposures, future cash flows and creating value utilizing both economic and formal hedging strategies. The risk management strategies also include the use of derivative instruments for trading purposes which focus on seizing market opportunities to create value driven by expected changes in the market prices of the commodities. To accomplish these objectives, the Registrants primarily employ risk management contracts including physical and financial forward purchase-and-sale contracts and, to a lesser extent, OTC swaps and options. Not all risk management contracts meet the definition of a derivative under the accounting guidance for “Derivatives and Hedging.” Derivative risk management contracts elected normal under the normal purchases and normal sales scope exception are not subject to the requirements of this accounting guidance. The Registrants utilize power, capacity, coal, natural gas, interest rate and, to a lesser extent, heating oil, gasoline and other commodity contracts to manage the risk associated with the energy business. The Registrants utilize interest rate derivative contracts in order to manage the interest rate exposure associated with the commodity portfolio. For disclosure purposes, such risks are grouped as “Commodity,” as these risks are related to energy risk management activities. The Registrants also utilize derivative contracts to manage interest rate risk associated with debt financing and foreign currency risk associated with future purchase obligations denominated in foreign currencies. For disclosure purposes, these risks are grouped as “Interest Rate and Foreign Currency.” The amount of risk taken is determined by the Commercial Operations, Energy Supply and Finance groups in accordance with established risk management policies as approved by the Finance Committee of the Board of Directors. The following tables represent the gross notional volume of the Registrants’ outstanding derivative contracts as of March 31, 2016 and December 31, 2015 : Notional Volume of Derivative Instruments March 31, 2016 Primary Risk Exposure Unit of Measure AEP APCo I&M OPCo PSO SWEPCo (in millions) Commodity: Power MWhs 272.7 25.0 13.9 11.6 4.8 5.9 Coal Tons 3.4 — 1.1 — — 2.3 Natural Gas MMBtus 42.7 0.3 0.2 — 0.2 0.2 Heating Oil and Gasoline Gallons 6.9 1.3 0.6 1.5 0.8 0.9 Interest Rate USD $ 101.9 $ 1.2 $ 0.8 $ — $ — $ — Interest Rate and Foreign Currency USD $ 559.3 $ — $ — $ — $ — $ — Notional Volume of Derivative Instruments December 31, 2015 Primary Risk Exposure Unit of Measure AEP APCo I&M OPCo PSO SWEPCo (in millions) Commodity: Power MWhs 317.8 40.9 22.8 13.3 11.3 14.0 Coal Tons 4.4 — 1.6 — — 2.8 Natural Gas MMBtus 38.2 0.3 0.2 — 0.2 0.2 Heating Oil and Gasoline Gallons 7.4 1.4 0.7 1.6 0.8 0.9 Interest Rate USD $ 113.5 $ 2.4 $ 1.6 $ — $ — $ — Interest Rate and Foreign Currency USD $ 560.3 $ — $ — $ — $ — $ — Fair Value Hedging Strategies (Applies to AEP) Parent enters into interest rate derivative transactions as part of an overall strategy to manage the mix of fixed-rate and floating-rate debt. Certain interest rate derivative transactions effectively modify exposure to interest rate risk by converting a portion of fixed-rate debt to a floating rate. Provided specific criteria are met, these interest rate derivatives are designated as fair value hedges. Cash Flow Hedging Strategies The Registrants utilize cash flow hedges on certain derivative transactions for the purchase and sale of power (“Commodity”) in order to manage the variable price risk related to forecasted purchases and sales. Management monitors the potential impacts of commodity price changes and, where appropriate, enters into derivative transactions to protect profit margins for a portion of future electricity sales and purchases. The Registrants do not hedge all commodity price risk. The Registrants utilize a variety of interest rate derivative transactions in order to manage interest rate risk exposure. The Registrants also utilize interest rate derivative contracts to manage interest rate exposure related to future borrowings of fixed-rate debt. The Registrants do not hedge all interest rate exposure. At times, the Registrants are exposed to foreign currency exchange rate risks primarily when some fixed assets are purchased from foreign suppliers. In accordance with AEP’s risk management policy, the Registrants may utilize foreign currency derivative transactions to protect against the risk of increased cash outflows resulting from a foreign currency’s appreciation against the dollar. The Registrants do not hedge all foreign currency exposure. ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND THE IMPACT ON THE FINANCIAL STATEMENTS The accounting guidance for “Derivatives and Hedging” requires recognition of all qualifying derivative instruments as either assets or liabilities on the condensed balance sheets at fair value. The fair values of derivative instruments accounted for using MTM accounting or hedge accounting are based on exchange prices and broker quotes. If a quoted market price is not available, the estimate of fair value is based on the best information available including valuation models that estimate future energy prices based on existing market and broker quotes, supply and demand market data and assumptions. In order to determine the relevant fair values of the derivative instruments, the Registrants apply valuation adjustments for discounting, liquidity and credit quality. Credit risk is the risk that a counterparty will fail to perform on the contract or fail to pay amounts due. Liquidity risk represents the risk that imperfections in the market will cause the price to vary from estimated fair value based upon prevailing market supply and demand conditions. Since energy markets are imperfect and volatile, there are inherent risks related to the underlying assumptions in models used to fair value risk management contracts. Unforeseen events may cause reasonable price curves to differ from actual price curves throughout a contract’s term and at the time a contract settles. Consequently, there could be significant adverse or favorable effects on future net income and cash flows if market prices are not consistent with management’s estimates of current market consensus for forward prices in the current period. This is particularly true for longer term contracts. Cash flows may vary based on market conditions, margin requirements and the timing of settlement of risk management contracts. According to the accounting guidance for “Derivatives and Hedging,” the Registrants reflect the fair values of derivative instruments subject to netting agreements with the same counterparty net of related cash collateral. For certain risk management contracts, the Registrants are required to post or receive cash collateral based on third party contractual agreements and risk profiles. For the March 31, 2016 and December 31, 2015 condensed balance sheets, the Registrants netted cash collateral received from third parties against short-term and long-term risk management assets and cash collateral paid to third parties against short-term and long-term risk management liabilities as follows: March 31, 2016 December 31, 2015 Company Cash Collateral Received Netted Against Risk Management Assets Cash Collateral Paid Netted Against Risk Management Liabilities Cash Collateral Received Netted Against Risk Management Assets Cash Collateral Paid Netted Against Risk Management Liabilities (in millions) AEP $ 11.8 $ 43.0 $ 5.8 $ 44.4 APCo — 0.6 — 3.1 I&M — 0.1 — 0.6 OPCo — 0.2 — 0.5 PSO — 0.1 — 0.3 SWEPCo — 0.2 — 0.3 The following tables represent the gross fair value of the Registrants’ derivative activity on the condensed balance sheets as of March 31, 2016 and December 31, 2015 : AEP Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts Hedging Contracts Gross Amounts of Risk Management Assets/ Liabilities Recognized Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location Commodity (a) Commodity (a) Interest Rate and Foreign Currency (a) (in millions) Current Risk Management Assets $ 425.9 $ 9.8 $ 0.9 $ 436.6 $ (292.8 ) $ 143.8 Long-term Risk Management Assets 390.1 13.5 — 403.6 (74.7 ) 328.9 Total Assets 816.0 23.3 0.9 840.2 (367.5 ) 472.7 Current Risk Management Liabilities 401.6 12.6 0.3 414.5 (310.2 ) 104.3 Long-term Risk Management Liabilities 264.6 31.0 0.5 296.1 (88.5 ) 207.6 Total Liabilities 666.2 43.6 0.8 710.6 (398.7 ) 311.9 Total MTM Derivative Contract Net Assets (Liabilities) $ 149.8 $ (20.3 ) $ 0.1 $ 129.6 $ 31.2 $ 160.8 AEP Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts Hedging Contracts Gross Amounts of Risk Management Assets/ Liabilities Recognized Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location Commodity (a) Commodity (a) Interest Rate and Foreign Currency (a) (in millions) Current Risk Management Assets $ 368.8 $ 8.2 $ 0.1 $ 377.1 $ (242.7 ) $ 134.4 Long-term Risk Management Assets 364.8 11.7 — 376.5 (54.7 ) 321.8 Total Assets 733.6 19.9 0.1 753.6 (297.4 ) 456.2 Current Risk Management Liabilities 347.0 9.1 0.3 356.4 (269.3 ) 87.1 Long-term Risk Management Liabilities 223.3 19.3 3.2 245.8 (66.7 ) 179.1 Total Liabilities 570.3 28.4 3.5 602.2 (336.0 ) 266.2 Total MTM Derivative Contract Net Assets (Liabilities) $ 163.3 $ (8.5 ) $ (3.4 ) $ 151.4 $ 38.6 $ 190.0 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts primarily include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. APCo Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 24.1 $ (12.2 ) $ 11.9 Long-term Risk Management Assets - Nonaffiliated 1.0 (0.7 ) 0.3 Total Assets 25.1 (12.9 ) 12.2 Current Risk Management Liabilities - Nonaffiliated 23.2 (12.8 ) 10.4 Long-term Risk Management Liabilities - Nonaffiliated 0.8 (0.7 ) 0.1 Total Liabilities 24.0 (13.5 ) 10.5 Total MTM Derivative Contract Net Assets $ 1.1 $ 0.6 $ 1.7 APCo Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 25.9 $ (10.3 ) $ 15.6 Long-term Risk Management Assets - Nonaffiliated 0.3 (0.2 ) 0.1 Total Assets 26.2 (10.5 ) 15.7 Current Risk Management Liabilities - Nonaffiliated 18.1 (13.3 ) 4.8 Long-term Risk Management Liabilities - Nonaffiliated 0.3 (0.2 ) 0.1 Total Liabilities 18.4 (13.5 ) 4.9 Total MTM Derivative Contract Net Assets $ 7.8 $ 3.0 $ 10.8 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. I&M Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 17.6 $ (8.5 ) $ 9.1 Long-term Risk Management Assets - Nonaffiliated 0.9 (0.5 ) 0.4 Total Assets 18.5 (9.0 ) 9.5 Current Risk Management Liabilities - Nonaffiliated 15.0 (8.6 ) 6.4 Long-term Risk Management Liabilities - Nonaffiliated 1.5 (0.5 ) 1.0 Total Liabilities 16.5 (9.1 ) 7.4 Total MTM Derivative Contract Net Assets $ 2.0 $ 0.1 $ 2.1 I&M Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 22.8 $ (10.5 ) $ 12.3 Long-term Risk Management Assets - Nonaffiliated 0.6 (0.6 ) — Total Assets 23.4 (11.1 ) 12.3 Current Risk Management Liabilities - Nonaffiliated 17.0 (10.7 ) 6.3 Long-term Risk Management Liabilities - Nonaffiliated 2.6 (1.0 ) 1.6 Total Liabilities 19.6 (11.7 ) 7.9 Total MTM Derivative Contract Net Assets $ 3.8 $ 0.6 $ 4.4 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. OPCo Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ — $ — $ — Long-term Risk Management Assets — — — Total Assets — — — Current Risk Management Liabilities 5.7 (0.2 ) 5.5 Long-term Risk Management Liabilities 5.8 — 5.8 Total Liabilities 11.5 (0.2 ) 11.3 Total MTM Derivative Contract Net Assets (Liabilities) $ (11.5 ) $ 0.2 $ (11.3 ) OPCo Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ — $ — $ — Long-term Risk Management Assets 19.2 — 19.2 Total Assets 19.2 — 19.2 Current Risk Management Liabilities 4.1 (0.5 ) 3.6 Long-term Risk Management Liabilities — — — Total Liabilities 4.1 (0.5 ) 3.6 Total MTM Derivative Contract Net Assets $ 15.1 $ 0.5 $ 15.6 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. PSO Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.7 $ — $ 0.7 Long-term Risk Management Assets — — — Total Assets 0.7 — 0.7 Current Risk Management Liabilities 0.3 (0.1 ) 0.2 Long-term Risk Management Liabilities — — — Total Liabilities 0.3 (0.1 ) 0.2 Total MTM Derivative Contract Net Assets $ 0.4 $ 0.1 $ 0.5 PSO Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.6 $ — $ 0.6 Long-term Risk Management Assets — — — Total Assets 0.6 — 0.6 Current Risk Management Liabilities 0.5 (0.3 ) 0.2 Long-term Risk Management Liabilities — — — Total Liabilities 0.5 (0.3 ) 0.2 Total MTM Derivative Contract Net Assets $ 0.1 $ 0.3 $ 0.4 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. SWEPCo Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.9 $ (0.1 ) $ 0.8 Long-term Risk Management Assets — — — Total Assets 0.9 (0.1 ) 0.8 Current Risk Management Liabilities 3.8 (0.3 ) 3.5 Long-term Risk Management Liabilities 1.8 — 1.8 Total Liabilities 5.6 (0.3 ) 5.3 Total MTM Derivative Contract Net Assets (Liabilities) $ (4.7 ) $ 0.2 $ (4.5 ) SWEPCo Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.8 $ — $ 0.8 Long-term Risk Management Assets — — — Total Assets 0.8 — 0.8 Current Risk Management Liabilities 3.4 (0.3 ) 3.1 Long-term Risk Management Liabilities 2.1 — 2.1 Total Liabilities 5.5 (0.3 ) 5.2 Total MTM Derivative Contract Net Assets (Liabilities) $ (4.7 ) $ 0.3 $ (4.4 ) (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. The tables below present the Registrants’ activity of derivative risk management contracts for the three months ended March 31, 2016 and 2015 : Amount of Gain (Loss) Recognized on Risk Management Contracts For the Three Months Ended March 31, 2016 Location of Gain (Loss) AEP APCo I&M OPCo PSO SWEPCo (in millions) Vertically Integrated Utilities Revenues $ 0.6 $ — $ — $ — $ — $ — Transmission and Distribution Utilities Revenues (3.5 ) — — — — — Generation & Marketing Revenues 19.8 — — — — — Electric Generation, Transmission and Distribution Revenues — (0.8 ) 1.6 (3.5 ) — — Sales to AEP Affiliates — 1.1 4.0 — — — Purchased Electricity for Resale 2.1 1.4 0.1 — — — Other Operation Expense (0.7 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Maintenance Expense (0.8 ) (0.2 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Regulatory Assets (a) (11.1 ) 0.2 0.3 (11.4 ) (0.5 ) 0.1 Regulatory Liabilities (a) 12.7 15.9 3.9 (15.2 ) — 4.5 Total Gain (Loss) on Risk Management Contracts $ 19.1 $ 17.5 $ 9.7 $ (30.3 ) $ (0.7 ) $ 4.4 Amount of Gain (Loss) Recognized on Risk Management Contracts For the Three Months Ended March 31, 2015 Location of Gain (Loss) AEP APCo I&M OPCo PSO SWEPCo (in millions) Vertically Integrated Utilities Revenues $ 4.4 $ — $ — $ — $ — $ — Generation & Marketing Revenues 48.8 — — — — — Electric Generation, Transmission and Distribution Revenues — 0.6 2.2 — — — Purchased Electricity for Resale 3.3 0.7 0.3 — — — Other Operation Expense (0.9 ) (0.1 ) (0.1 ) (0.2 ) (0.1 ) (0.1 ) Maintenance Expense (0.8 ) (0.2 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Regulatory Assets (a) (4.1 ) 0.7 (0.5 ) — (0.8 ) (3.5 ) Regulatory Liabilities (a) 3.9 1.7 (3.0 ) 4.7 — 3.9 Total Gain (Loss) on Risk Management Contracts $ 54.6 $ 3.4 $ (1.2 ) $ 4.4 $ (1.0 ) $ 0.2 (a) Represents realized and unrealized gains and losses subject to regulatory accounting treatment recorded as either current or noncurrent on the condensed balance sheets. Certain qualifying derivative instruments have been designated as normal purchase or normal sale contracts, as provided in the accounting guidance for “Derivatives and Hedging.” Derivative contracts that have been designated as normal purchases or normal sales under that accounting guidance are not subject to MTM accounting treatment and are recognized on the condensed statements of income on an accrual basis. The accounting for the changes in the fair value of a derivative instrument depends on whether it qualifies for and has been designated as part of a hedging relationship and further, on the type of hedging relationship. Depending on the exposure, management designates a hedging instrument as a fair value hedge or a cash flow hedge. For contracts that have not been designated as part of a hedging relationship, the accounting for changes in fair value depends on whether the derivative instrument is held for trading purposes. Unrealized and realized gains and losses on derivative instruments held for trading purposes are included in revenues on a net basis on the condensed statements of income. Unrealized and realized gains and losses on derivative instruments not held for trading purposes are included in revenues or expenses on the condensed statements of income depending on the relevant facts and circumstances. Certain derivatives that economically hedge future commodity risk are recorded in the same expense line item on the condensed statements of income as that of the associated risk. However, unrealized and some realized gains and losses in regulated jurisdictions for both trading and non-trading derivative instruments are recorded as regulatory assets (for losses) or regulatory liabilities (for gains) in accordance with the accounting guidance for “Regulated Operations.” In connection with OPCo’s June 2012 - May 2015 ESP, the PUCO ordered OPCo to conduct energy and capacity auctions for its entire SSO load for delivery beginning in June 2015, see Note 4 - Rate Matters. These auctions resulted in a range of products, including 12-month, 24-month, and 36-month periods. The delivery period for each contract is scheduled to start on the first day of June of each year, immediately following the auction. Certain affiliated Vertically Integrated Utility and Generation & Marketing segment entities participated in the auction process and were awarded tranches of OPCo’s SSO load. The underlying contracts are derivatives subject to the accounting guidance for “Derivatives and Hedging” and are accounted for using MTM accounting, unless the contract has been designated as a normal purchase or normal sale. Accounting for Fair Value Hedging Strategies (Applies to AEP) For fair value hedges (i.e. hedging the exposure to changes in the fair value of an asset, liability or an identified portion thereof attributable to a particular risk), the gain or loss on the derivative instrument as well as the offsetting gain or loss on the hedged item associated with the hedged risk impacts Net Income during the period of change. AEP records realized and unrealized gains or losses on interest rate swaps that qualify for fair value hedge accounting treatment and any offsetting changes in the fair value of the debt being hedged in Interest Expense on the condensed statements of income. The following table shows the results of hedging gains (losses) during the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 2015 (in millions) Gain on Fair Value Hedging Instruments $ 3.5 $ 4.5 Loss on Fair Value Portion of Long-term Debt (3.5 ) (4.5 ) During the three months ended March 31, 2016 and 2015 , hedge ineffectiveness was immaterial. Accounting for Cash Flow Hedging Strategies For cash flow hedges (i.e. hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the Registrants initially report the effective portion of the gain or loss on the derivative instrument as a component of Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets until the period the hedged item affects Net Income. The Registrants recognize any hedge ineffectiveness in Net Income immediately during the period of change, except in regulated jurisdictions where hedge ineffectiveness would be recorded as a regulatory asset (for losses) or a regulatory liability (for gains) if applicable. Realized gains and losses on derivative contracts for the purchase and sale of power designated as cash flow hedges are included in Total Revenues or Purchased Electricity for Resale on the condensed statements of income or in Regulatory Assets or Regulatory Liabilities on the condensed balance sheets, depending on the specific nature of the risk being hedged. During the three months ended March 31, 2016 and 2015 , AEP applied cash flow hedging to outstanding power derivatives. During the three months ended March 31, 2016 and 2015 , the Registrant Subsidiaries did not apply cash flow hedging to outstanding power derivatives. The Registrants reclassify gains and losses on interest rate derivative hedges related to debt financings from Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets into Interest Expense on the condensed statements of income in those periods in which hedged interest payments occur. During the three months ended March 31, 2016 and 2015 , AEP applied cash flow hedging to outstanding interest rate derivatives. During the three months ended March 31, 2016 and 2015 , the Registrant Subsidiaries did not apply cash flow hedging to outstanding interest rate derivatives. The accumulated gains or losses related to foreign currency hedges are reclassified from Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets into Depreciation and Amortization expense on the condensed statements of income over the depreciable lives of the fixed assets designated as the hedged items in qualifying foreign currency hedging relationships. During the three months ended March 31, 2016 and 2015 , the Registrants did not apply cash flow hedging to any outstanding foreign currency derivatives as cash flow hedges. During the three months ended March 31, 2016 and 2015 , hedge ineffectiveness was immaterial or nonexistent for all of the hedge strategies disclosed above. For details on effective cash flow hedges included in Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets and the reasons for changes in cash flow hedges, see Note 3 . Cash flow hedges included in Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets as of March 31, 2016 and December 31, 2015 were: Impact of Cash Flow Hedges on AEP’s Condensed Balance Sheets March 31, 2016 December 31, 2015 Company Commodity Interest Rate and Foreign Currency Commodity Interest Rate and Foreign Currency (in millions) Hedging Assets (a) $ 19.8 $ — $ 17.6 $ — Hedging Liabilities (a) 40.1 0.4 26.1 0.4 AOCI Loss Net of Tax (12.9 ) (16.9 ) (5.2 ) (17.2 ) Portion Expected to be Reclassified to Net Income During the Next Twelve Months (1.7 ) (1.4 ) (0.4 ) (1.5 ) (a) Hedging Assets and Hedging Liabilities are included in Risk Management Assets and Liabilities on the condensed balance sheets. As of March 31, 2016 the maximum length of time that AEP is hedging its exposure to variability in future cash flows related to forecasted transactions is 141 months. Impact of Cash Flow Hedges on the Registrant Subsidiaries’ Condensed Balance Sheets March 31, 2016 December 31, 2015 Interest Rate and Foreign Currency Company AOCI Gain (Loss) Net of Tax Expected to be Reclassified to Net Income During the Next Twelve Months AOCI Gain (Loss) Net of Tax Expected to be Reclassified to Net Income During the Next Twelve Months (in millions) APCo $ 3.4 $ 0.7 $ 3.6 $ 0.7 I&M (12.9 ) (1.3 ) (13.3 ) (1.3 ) OPCo 3.9 1.1 4.3 1.2 PSO 4.0 0.8 4.2 0.8 SWEPCo (8.6 ) (1.7 ) (9.1 ) (1.7 ) The actual amounts reclassified from Accumulated Other Comprehensive Income (Loss) to Net Income can differ from the estimate above due to market price changes. Credit Risk Management limits credit risk in wholesale marketing and trading activities by assessing the creditworthiness of potential counterparties before entering into transactions with them and continuing to evaluate their creditworthiness on an ongoing basis. Management uses Moody’s, Standard and Poor’s and current market-based qualitative and quantitative data as well as financial statements to assess the financial health of counterparties on an ongoing basis. Master agreements are typically used to facilitate the netting of cash flows associated with a single counterparty and may include collateral requirements. Collateral requirements in the form of cash, letters of credit and parental/affiliate guarantees may be obtained as security from counterparties in order to mitigate credit risk. A counterparty is required to post cash or letters of credit in the event exposure exceeds the established threshold. The threshold represents an unsecured credit limit which may be supported by a parental/affiliate guaranty, as determined in accordance with AEP’s credit policy. In addition, master agreements allow for termination and liquidation of all positions in the event of a failure or inability to post collateral. Collateral Triggering Events Credit Downgrade Triggers (Applies to AEP, APCo, I&M, PSO and SWEPCo) Under the tariffs of the RTOs and Independent System Operators (ISOs) and a limited number of derivative and non-derivative contracts primarily related to competitive retail auction loads, additional amounts of collateral are required if certain credit ratings decline below a specified rating threshold. The amount of collateral required fluctuates based on market prices and total exposure. On an ongoing basis, AEP’s risk management organization assesses the appropriateness of these collateral triggering items in contracts. AEP, APCo, I&M, PSO and SWEPCo have not experienced a downgrade below a specified rati |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The disclosures in this note apply to all Registrants unless indicated otherwise. Fair Value Hierarchy and Valuation Techniques The accounting guidance for “Fair Value Measurements and Disclosures” establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2. When quoted market prices are not available, pricing may be completed using comparable securities, dealer values, operating data and general market conditions to determine fair value. Valuation models utilize various inputs such as commodity, interest rate and, to a lesser degree, volatility and credit that include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, market corroborated inputs (i.e. inputs derived principally from, or correlated to, observable market data) and other observable inputs for the asset or liability. The amount of risk taken is determined by the Commercial Operations, Energy Supply and Finance groups in accordance with established risk management policies as approved by the Finance Committee of AEP’s Board of Directors. AEPSC’s market risk oversight staff independently monitors risk policies, procedures and risk levels and provides members of the Commercial Operations Risk Committee (Regulated Risk Committee) and the Energy Supply Risk Committee (Competitive Risk Committee) various reports regarding compliance with policies, limits and procedures. The Regulated Risk Committee consists of AEPSC’s Chief Operating Officer, Chief Financial Officer, Executive Vice President of Generation, Senior Vice President of Commercial Operations and Chief Risk Officer. The Competitive Risk Committee consists of AEPSC’s Chief Operating Officer, Chief Financial Officer and Chief Risk Officer in addition to Energy Supply’s President and Vice President. For commercial activities, exchange traded derivatives, namely futures contracts, are generally fair valued based on unadjusted quoted prices in active markets and are classified as Level 1. Level 2 inputs primarily consist of OTC broker quotes in moderately active or less active markets, as well as exchange traded contracts where there is insufficient market liquidity to warrant inclusion in Level 1. Management verifies price curves using these broker quotes and classifies these fair values within Level 2 when substantially all of the fair value can be corroborated. Management typically obtains multiple broker quotes, which are nonbinding in nature but are based on recent trades in the marketplace. When multiple broker quotes are obtained, the quoted bid and ask prices are averaged. In certain circumstances, a broker quote may be discarded if it is a clear outlier. Management uses a historical correlation analysis between the broker quoted location and the illiquid locations. If the points are highly correlated, these locations are included within Level 2 as well. Certain OTC and bilaterally executed derivative instruments are executed in less active markets with a lower availability of pricing information. Illiquid transactions, complex structured transactions, FTRs and counterparty credit risk may require nonmarket based inputs. Some of these inputs may be internally developed or extrapolated and utilized to estimate fair value. When such inputs have a significant impact on the measurement of fair value, the instrument is categorized as Level 3. The main driver of contracts being classified as Level 3 is the inability to substantiate energy price curves in the market. A portion of the Level 3 instruments have been economically hedged which limits potential earnings volatility. AEP utilizes its trustee’s external pricing service to estimate the fair value of the underlying investments held in the nuclear trusts. AEP’s investment managers review and validate the prices utilized by the trustee to determine fair value. AEP’s management performs its own valuation testing to verify the fair values of the securities. AEP receives audit reports of the trustee’s operating controls and valuation processes. The trustee uses multiple pricing vendors for the assets held in the trusts. Assets in the nuclear trusts, Cash and Cash Equivalents, Other Temporary Investments and Restricted Cash for Securitized Funding are classified using the following methods. Equities are classified as Level 1 holdings if they are actively traded on exchanges. Items classified as Level 1 are investments in money market funds, fixed income and equity mutual funds and domestic equity securities. They are valued based on observable inputs, primarily unadjusted quoted prices in active markets for identical assets. Items classified as Level 2 are primarily investments in individual fixed income securities and cash equivalent funds. Fixed income securities generally do not trade on exchanges and do not have an official closing price but their valuation inputs are based on observable market data. Pricing vendors calculate bond valuations using financial models and matrices. The models use observable inputs including yields on benchmark securities, quotes by securities brokers, rating agency actions, discounts or premiums on securities compared to par prices, changes in yields for U.S. Treasury securities, corporate actions by bond issuers, prepayment schedules and histories, economic events and, for certain securities, adjustments to yields to reflect changes in the rate of inflation. Other securities with model-derived valuation inputs that are observable are also classified as Level 2 investments. Investments with unobservable valuation inputs are classified as Level 3 investments. Fair Value Measurements of Long-term Debt The fair values of Long-term Debt are based on quoted market prices, without credit enhancements, for the same or similar issues and the current interest rates offered for instruments with similar maturities classified as Level 2 measurement inputs. These instruments are not marked-to-market. The estimates presented are not necessarily indicative of the amounts that could be realized in a current market exchange. The book values and fair values of Long-term Debt for the Registrants as of March 31, 2016 and December 31, 2015 are summarized in the following table: March 31, 2016 December 31, 2015 Company Book Value Fair Value Book Value Fair Value (in millions) AEP $ 19,782.6 $ 22,052.8 $ 19,572.7 $ 21,201.3 APCo 3,919.3 4,597.8 3,930.7 4,416.7 I&M 2,366.6 2,595.4 2,000.0 2,193.6 OPCo 2,135.5 2,515.4 2,157.7 2,472.7 PSO 1,286.3 1,463.6 1,286.1 1,402.9 SWEPCo 2,272.4 2,483.4 2,273.5 2,417.2 Fair Value Measurements of Other Temporary Investments (Applies to AEP) Other Temporary Investments include funds held by trustees primarily for the payment of securitization bonds and securities available for sale, including marketable securities that management intends to hold for less than one year and investments by its protected cell of EIS. The following is a summary of Other Temporary Investments: March 31, 2016 Other Temporary Investments Cost Gross Gains Gross Losses Fair Value (in millions) Restricted Cash (a) $ 147.4 $ — $ — $ 147.4 Fixed Income Securities – Mutual Funds 91.4 0.1 — 91.5 Equity Securities – Mutual Funds 13.9 11.7 — 25.6 Total Other Temporary Investments $ 252.7 $ 11.8 $ — $ 264.5 December 31, 2015 Other Temporary Investments Cost Gross Gains Gross Losses Fair Value (in millions) Restricted Cash (a) $ 271.0 $ — $ — $ 271.0 Fixed Income Securities – Mutual Funds 91.1 — (0.7 ) 90.4 Equity Securities – Mutual Funds 13.7 11.7 — 25.4 Total Other Temporary Investments $ 375.8 $ 11.7 $ (0.7 ) $ 386.8 (a) Primarily represents amounts held for the repayment of debt. The following table provides the activity for fixed income and equity securities within Other Temporary Investments for the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 2015 (in millions) Proceeds from Investment Sales $ — $ — Purchases of Investments 0.4 0.4 Gross Realized Gains on Investment Sales — — Gross Realized Losses on Investment Sales — — As of March 31, 2016 and December 31, 2015 , AEP had no Other Temporary Investments with an unrealized loss position. As of March 31, 2016 , fixed income securities were primarily debt based mutual funds with short and intermediate maturities. Mutual funds may be sold and do not contain maturity dates. For details of the reasons for changes in Securities Available for Sale included in Accumulated Other Comprehensive Income (Loss) for the three months ended March 31, 2016 and 2015 , see Note 3 . Fair Value Measurements of Trust Assets for Decommissioning and SNF Disposal (Applies to AEP and I&M) Nuclear decommissioning and spent nuclear fuel trust funds represent funds that regulatory commissions allow I&M to collect through rates to fund future decommissioning and spent nuclear fuel disposal liabilities. By rules or orders, the IURC, the MPSC and the FERC established investment limitations and general risk management guidelines. In general, limitations include: • Acceptable investments (rated investment grade or above when purchased). • Maximum percentage invested in a specific type of investment. • Prohibition of investment in obligations of AEP, I&M or their affiliates. • Withdrawals permitted only for payment of decommissioning costs and trust expenses. I&M maintains trust records for each regulatory jurisdiction. Regulatory approval is required to withdraw decommissioning funds. These funds are managed by external investment managers who must comply with the guidelines and rules of the applicable regulatory authorities. The trust assets are invested to optimize the net of tax earnings of the trust giving consideration to liquidity, risk, diversification and other prudent investment objectives. I&M records securities held in these trust funds in Spent Nuclear Fuel and Decommissioning Trusts on its balance sheets. I&M records these securities at fair value. I&M classifies securities in the trust funds as available-for-sale due to their long-term purpose. Other-than-temporary impairments for investments in both debt and equity securities are considered realized losses as a result of securities being managed by an external investment management firm. The external investment management firm makes specific investment decisions regarding the debt and equity investments held in these trusts and generally intends to sell debt securities in an unrealized loss position as part of a tax optimization strategy. Impairments reduce the cost basis of the securities which will affect any future unrealized gain or realized gain or loss due to the adjusted cost of investment. I&M records unrealized gains and other-than-temporary impairments from securities in these trust funds as adjustments to the regulatory liability account for the nuclear decommissioning trust funds and to regulatory assets or liabilities for the SNF disposal trust funds in accordance with their treatment in rates. Consequently, changes in fair value of trust assets do not affect earnings or AOCI. The following is a summary of nuclear trust fund investments as of March 31, 2016 and December 31, 2015 : March 31, 2016 December 31, 2015 Fair Value Gross Unrealized Gains Other-Than-Temporary Impairments Fair Value Gross Unrealized Gains Other-Than-Temporary Impairments (in millions) Cash and Cash Equivalents $ 142.0 $ — $ — $ 168.3 $ — $ — Fixed Income Securities: United States Government 761.1 52.3 (2.1 ) 731.1 35.9 (2.6 ) Corporate Debt 68.9 4.9 (1.0 ) 57.9 3.2 (1.1 ) State and Local Government 29.0 1.2 (0.3 ) 22.2 1.1 (0.3 ) Subtotal Fixed Income Securities 859.0 58.4 (3.4 ) 811.2 40.2 (4.0 ) Equity Securities - Domestic 1,151.4 583.5 (78.9 ) 1,126.9 571.6 (79.3 ) Spent Nuclear Fuel and Decommissioning Trusts $ 2,152.4 $ 641.9 $ (82.3 ) $ 2,106.4 $ 611.8 $ (83.3 ) The following table provides the securities activity within the decommissioning and SNF trusts for the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 2015 (in millions) Proceeds from Investment Sales $ 1,137.7 $ 228.2 Purchases of Investments 1,151.6 245.8 Gross Realized Gains on Investment Sales 15.8 11.2 Gross Realized Losses on Investment Sales 7.8 3.8 The adjusted cost of fixed income securities was $801 million and $771 million as of March 31, 2016 and December 31, 2015 , respectively. The adjusted cost of equity securities was $568 million and $555 million as of March 31, 2016 and December 31, 2015 , respectively. The fair value of fixed income securities held in the nuclear trust funds, summarized by contractual maturities, as of March 31, 2016 was as follows: Fair Value of Fixed Income Securities (in millions) Within 1 year $ 175.4 1 year – 5 years 369.6 5 years – 10 years 133.0 After 10 years 181.0 Total $ 859.0 Fair Value Measurements of Financial Assets and Liabilities The following tables set forth, by level within the fair value hierarchy, the Registrants’ financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2016 and December 31, 2015 . As required by the accounting guidance for “Fair Value Measurements and Disclosures,” financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Management’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. There have not been any significant changes in management’s valuation techniques. AEP Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 9.6 $ 4.4 $ — $ 176.4 $ 190.4 Other Temporary Investments Restricted Cash (a) 129.2 7.6 — 10.6 147.4 Fixed Income Securities – Mutual Funds 91.5 — — — 91.5 Equity Securities – Mutual Funds (b) 25.6 — — — 25.6 Total Other Temporary Investments 246.3 7.6 — 10.6 264.5 Risk Management Assets Risk Management Commodity Contracts (c) (d) 10.7 585.5 201.8 (346.0 ) 452.0 Cash Flow Hedges: Commodity Hedges (c) — 11.4 8.1 0.3 19.8 Fair Value Hedges — 0.5 — 0.4 0.9 Total Risk Management Assets 10.7 597.4 209.9 (345.3 ) 472.7 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 135.3 — — 6.7 142.0 Fixed Income Securities: United States Government — 761.1 — — 761.1 Corporate Debt — 68.9 — — 68.9 State and Local Government — 29.0 — — 29.0 Subtotal Fixed Income Securities — 859.0 — — 859.0 Equity Securities – Domestic (b) 1,151.4 — — — 1,151.4 Total Spent Nuclear Fuel and Decommissioning Trusts 1,286.7 859.0 — 6.7 2,152.4 Total Assets $ 1,553.3 $ 1,468.4 $ 209.9 $ (151.6 ) $ 3,080.0 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (d) $ 20.5 $ 569.2 $ 58.5 $ (377.2 ) $ 271.0 Cash Flow Hedges: Commodity Hedges (c) — 29.7 10.1 0.3 40.1 Interest Rate/Foreign Currency Hedges — 0.4 — — 0.4 Fair Value Hedges — — — 0.4 0.4 Total Risk Management Liabilities $ 20.5 $ 599.3 $ 68.6 $ (376.5 ) $ 311.9 AEP Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 3.9 $ 4.3 $ — $ 168.2 $ 176.4 Other Temporary Investments Restricted Cash (a) 230.0 7.7 — 33.3 271.0 Fixed Income Securities – Mutual Funds 90.4 — — — 90.4 Equity Securities – Mutual Funds (b) 25.4 — — — 25.4 Total Other Temporary Investments 345.8 7.7 — 33.3 386.8 Risk Management Assets Risk Management Commodity Contracts (c) (f) 11.5 495.0 219.7 (287.7 ) 438.5 Cash Flow Hedges: Commodity Hedges (c) — 15.9 1.0 0.7 17.6 Fair Value Hedges — — — 0.1 0.1 Total Risk Management Assets 11.5 510.9 220.7 (286.9 ) 456.2 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 160.5 — — 7.8 168.3 Fixed Income Securities: United States Government — 731.1 — — 731.1 Corporate Debt — 57.9 — — 57.9 State and Local Government — 22.2 — — 22.2 Subtotal Fixed Income Securities — 811.2 — — 811.2 Equity Securities – Domestic (b) 1,126.9 — — — 1,126.9 Total Spent Nuclear Fuel and Decommissioning Trusts 1,287.4 811.2 — 7.8 2,106.4 Total Assets $ 1,648.6 $ 1,334.1 $ 220.7 $ (77.6 ) $ 3,125.8 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (f) $ 24.1 $ 471.5 $ 67.3 $ (326.3 ) $ 236.6 Cash Flow Hedges: Commodity Hedges (c) — 18.9 6.5 0.7 26.1 Interest Rate/Foreign Currency Hedges — 0.4 — — 0.4 Fair Value Hedges — 3.0 — 0.1 3.1 Total Risk Management Liabilities $ 24.1 $ 493.8 $ 73.8 $ (325.5 ) $ 266.2 APCo Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ 7.5 $ — $ — $ 0.1 $ 7.6 Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) 0.2 16.2 8.2 (12.4 ) 12.2 Total Assets: $ 7.7 $ 16.2 $ 8.2 $ (12.3 ) $ 19.8 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.2 $ 17.7 $ 5.6 $ (13.0 ) $ 10.5 APCo Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ 14.8 $ — $ — $ 0.1 $ 14.9 Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) 0.2 13.9 12.2 (10.6 ) 15.7 Total Assets: $ 15.0 $ 13.9 $ 12.2 $ (10.5 ) $ 30.6 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.2 $ 17.8 $ 0.5 $ (13.6 ) $ 4.9 I&M Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 12.5 $ 5.5 $ (8.6 ) $ 9.5 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 135.3 — — 6.7 142.0 Fixed Income Securities: United States Government — 761.1 — — 761.1 Corporate Debt — 68.9 — — 68.9 State and Local Government — 29.0 — — 29.0 Subtotal Fixed Income Securities — 859.0 — — 859.0 Equity Securities - Domestic (b) 1,151.4 — — — 1,151.4 Total Spent Nuclear Fuel and Decommissioning Trusts 1,286.7 859.0 — 6.7 2,152.4 Total Assets $ 1,286.8 $ 871.5 $ 5.5 $ (1.9 ) $ 2,161.9 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 14.2 $ 1.8 $ (8.7 ) $ 7.4 I&M Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 17.0 $ 6.3 $ (11.1 ) $ 12.3 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 160.5 — — 7.8 168.3 Fixed Income Securities: United States Government — 731.1 — — 731.1 Corporate Debt — 57.9 — — 57.9 State and Local Government — 22.2 — — 22.2 Subtotal Fixed Income Securities — 811.2 — — 811.2 Equity Securities - Domestic (b) 1,126.9 — — — 1,126.9 Total Spent Nuclear Fuel and Decommissioning Trusts 1,287.4 811.2 — 7.8 2,106.4 Total Assets $ 1,287.5 $ 828.2 $ 6.3 $ (3.3 ) $ 2,118.7 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 17.5 $ 2.0 $ (11.7 ) $ 7.9 OPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ 16.2 $ — $ — $ — $ 16.2 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.6 $ 10.9 $ (0.2 ) $ 11.3 OPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ — $ — $ — $ 27.7 $ 27.7 Risk Management Assets Risk Management Commodity Contracts (c) (g) — — 16.0 3.2 19.2 Total Assets $ — $ — $ 16.0 $ 30.9 $ 46.9 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.8 $ 0.1 $ 2.7 $ 3.6 PSO Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets Risk Management Commodity Contracts (c) (g) $ — $ 0.1 $ 0.7 $ (0.1 ) $ 0.7 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.3 $ 0.1 $ (0.2 ) $ 0.2 PSO Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets Risk Management Commodity Contracts (c) (g) $ — $ — $ 0.7 $ (0.1 ) $ 0.6 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.5 $ 0.1 $ (0.4 ) $ 0.2 SWEPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 9.4 $ — $ — $ 2.9 $ 12.3 Risk Management Assets Risk Management Commodity Contracts (c) (g) — 0.1 0.8 (0.1 ) 0.8 Total Assets $ 9.4 $ 0.1 $ 0.8 $ 2.8 $ 13.1 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 5.5 $ 0.1 $ (0.3 ) $ 5.3 SWEPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 3.6 $ — $ — $ 1.6 $ 5.2 Risk Management Assets Risk Management Commodity Contracts (c) (g) — — 0.9 (0.1 ) 0.8 Total Assets $ 3.6 $ — $ 0.9 $ 1.5 $ 6.0 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 5.5 $ 0.1 $ (0.4 ) $ 5.2 (a) Amounts in “Other’’ column primarily represent cash deposits in bank accounts with financial institutions or with third parties. Level 1 and Level 2 amounts primarily represent investments in money market funds. (b) Amounts represent publicly traded equity securities and equity-based mutual funds. (c) Amounts in “Other’’ column primarily represent counterparty netting of risk management and hedging contracts and associated cash collateral under the accounting guidance for “Derivatives and Hedging.’’ (d) The March 31, 2016 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(5) million in 2016 and $(5) million in periods 2017-2019; Level 2 matures $3 million in 2016, $9 million in periods 2017-2019, $3 million in periods 2020-2021 and $1 million in periods 2022-2032; Level 3 matures $17 million in 2016, $37 million in periods 2017-2019, $21 million in periods 2020-2021 and $69 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. (e) Amounts in “Other’’ column primarily represent accrued interest receivables from financial institutions. Level 1 amounts primarily represent investments in money market funds. (f) The December 31, 2015 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(9) million in 2016 and $(4) million in periods 2017-2019; Level 2 matures $2 million in 2016, $18 million in periods 2017-2019 and $4 million in periods 2020-2021; Level 3 matures $28 million in 2016, $29 million in periods 2017-2019, $19 million in periods 2020-2021 and $76 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. (g) Substantially comprised of power contracts for APCo, I&M and OPCo and coal contracts for PSO and SWEPCo. There were no transfers between Level 1 and Level 2 during the three months ended March 31, 2016 and 2015 . The following tables set forth a reconciliation of changes in the fair value of net trading derivatives classified as Level 3 in the fair value hierarchy: Three Months Ended March 31, 2016 AEP APCo (a) I&M (a) OPCo PSO SWEPCo (in millions) Balance as of December 31, 2015 $ 146.9 $ 11.7 $ 4.3 $ 15.9 $ 0.6 $ 0.8 Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (b) (c) 23.5 15.3 2.5 (0.6 ) (0.8 ) 4.6 Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (b) 21.9 — — — — — Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income 1.3 — — — — — Purchases, Issuances and Settlements (d) (42.7 ) (27.7 ) (4.6 ) 1.4 0.5 (4.9 ) Transfers out of Level 3 (f) (g) 10.9 0.1 0.1 — — — Changes in Fair Value Allocated to Regulated Jurisdictions (h) (20.5 ) 3.2 1.4 (27.6 ) 0.3 0.2 Balance as of March 31, 2016 $ 141.3 $ 2.6 $ 3.7 $ (10.9 ) $ 0.6 $ 0.7 Three Months Ended March 31, 2015 AEP APCo I&M OPCo PSO SWEPCo (in millions) Balance as of December 31, 2014 $ 150.8 $ 15.8 $ 14.7 $ 48.4 $ (0.3 ) $ (0.5 ) Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (b) (c) 8.6 2.2 0.1 0.2 (0.3 ) 5.8 Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (b) 5.2 — — — — — Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income (1.9 ) — — — — — Purchases, Issuances and Settlements (d) (38.5 ) (13.4 ) (9.0 ) (6.8 ) 0.6 (5.3 ) Transfers into Level 3 (e) (f) 15.3 — — — — — Transfers out of Level 3 (f) (g) (12.4 ) — — — — — Changes in Fair Value Allocated to Regulated Jurisdictions (h) 3.5 1.4 (0.2 ) 4.1 (0.7 ) (1.2 ) Balance as of March 31, 2015 $ 130.6 $ 6.0 $ 5.6 $ 45.9 $ (0.7 ) $ (1.2 ) (a) Includes both affiliated and nonaffiliated transactions. (b) Included in revenues on the condensed statements of income. (c) Represents the change in fair value between the beginning of the reporting period and the settlement of the risk management commodity contract. (d) Represents the settlement of risk management commodity contracts for the reporting period. (e) Represents existing assets or liabilities that were previously categorized as Level 2. (f) Transfers are recognized based on their value at the beginning of the reporting period that the transfer occurred. (g) Represents existing assets or liabilities that were previously categorized as Level 3. (h) Relates to the net gains (losses) of those contracts that are not reflected on the condensed statements of income. These net gains (losses) are recorded as regulatory liabilities/assets. The following tables quantify the significant unobservable inputs used in developing the fair value of Level 3 positions as of March 31, 2016 and December 31, 2015 : Significant Unobservable Inputs March 31, 2016 AEP Significant Input/Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input Low High Average (in millions) Energy Contracts $ 207.6 $ 59.5 Discounted Cash Flow Forward Market Price (a) $ 8.77 $ 162.36 $ 45.45 Counterparty Credit Risk (b) 251 669 NA FTRs 2.3 9.1 Discounted Cash Flow Forward Market Price (a) $ (17.72 ) $ 10.50 $ 0.60 Total $ 209.9 $ 68.6 Significant Unobservable Inputs December 31, 2015 AEP Significant Input/Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input Low High Average (in millions) Energy Contracts $ 212.3 $ 70.3 Discounted Cash Flow Forward Market Price (a) $ 9.69 $ 165.36 $ 36.35 Counterparty Credit Risk (b) 670 FTRs 8.4 3.5 Discounted Cash Flow Forward Market Price (a) $ (6.99 ) $ 10.34 $ 1.10 Total $ 220.7 $ 73.8 Significant Unobservable Inputs March 31, 2016 APCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 8.2 $ 0.1 Discounted Cash Flow Forward Market Price $ 8.77 $ 47.05 $ 29.14 FTRs — 5.5 Discounted Cash Flow Forward Market Price 0.42 5.58 1.90 Total $ 8.2 $ 5.6 Significant Unobservable Inputs December 31, 2015 APCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 7.9 $ 0.2 Discounted Cash Flow Forward Market Price $ 12.61 $ 47.24 $ 32.38 FTRs 4.3 0.3 Discounted Cash Flow Forward Market Price (6.96 ) 8.43 1.34 Total $ 12.2 $ 0.5 Significant Unobservable Inputs March 31, 2016 I&M Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 5.5 $ 0.1 Discounted Cash Flow Forward Market Price $ 8.77 $ 47.05 $ 29.14 FTRs — 1.7 Discounted Cash Flow Forward Market Price (0.07 ) 5.58 0.42 Total $ 5.5 $ 1.8 Significant Unobservable Inputs December 31, 2015 I&M Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 6.0 $ 0.2 Discounted Cash Flow Forward Market Price $ 12.61 $ 47.24 $ 32.38 FTRs 0.3 1.8 Discounted Cash Flow Forward Market Price (6.96 ) 8.43 1.34 Total $ 6.3 $ 2.0 Significant Unobservable Inputs March 31, 2016 OPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input Low High Average (in millions) Energy Contracts $ — $ 10.9 Discounted Cash Flow Forward Market Price (a) $ 36.41 $ 162.36 $ 84.24 Counterparty Credit Risk (b) 251 Total $ — $ 10.9 Significant Unobservable Inputs December 31, 2015 OPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 16.0 $ 0.1 Discounted Cash Flow Forward Market Price $ 41.61 $ 165.36 $ 86.84 Significant Unobservable Inputs March 31, 2016 PSO Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.7 $ 0.1 Discounted Cash Flow Forward Market Price $ (17.72 ) $ 1.80 $ (0.59 ) Significant Unobservable Inputs December 31, 2015 PSO Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.7 $ 0.1 Discounted Cash Flow Forward Market Price $ (6.96 ) $ 8.43 $ 1.34 Significant Unobservable Inputs March 31, 2016 SWEPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.8 $ 0.1 Discounted Cash Flow Forward Market Price $ (17.72 ) $ 1.80 $ (0.59 ) Significant Unobservable Inputs December 31, 2015 SWEPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.9 $ 0.1 Discounted Cash Flow Forward Market Price $ (6.96 ) $ 8.43 $ 1.34 (a) Represents market prices in dollars per MWh. (b) Represents average price of credit default swaps used to calculate counterparty credit risk, reported in basis points. NA Not applicable. The following table provides sensitivity of fair value measurements to increases (decreases) in significant unobservable inputs related to Energy Contracts and FTRs for the Registrants as of March 31, 2016 and December 31, 2015 : Sensitivity of Fair Value Measurements Significant Unobservable Input Position Change in Input Impact on Fair Value Measurement Forward Market Price Buy Increase (Decrease) Higher (Lower) Forward Market Price Sell Increase (Decrease) Lower (Higher) Counterparty Credit Risk Loss Increase (Decrease) Higher (Lower) Counterparty Credit Risk Gain Increase (Decrease) Lower (Higher) |
Appalachian Power Co [Member] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The disclosures in this note apply to all Registrants unless indicated otherwise. Fair Value Hierarchy and Valuation Techniques The accounting guidance for “Fair Value Measurements and Disclosures” establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2. When quoted market prices are not available, pricing may be completed using comparable securities, dealer values, operating data and general market conditions to determine fair value. Valuation models utilize various inputs such as commodity, interest rate and, to a lesser degree, volatility and credit that include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, market corroborated inputs (i.e. inputs derived principally from, or correlated to, observable market data) and other observable inputs for the asset or liability. The amount of risk taken is determined by the Commercial Operations, Energy Supply and Finance groups in accordance with established risk management policies as approved by the Finance Committee of AEP’s Board of Directors. AEPSC’s market risk oversight staff independently monitors risk policies, procedures and risk levels and provides members of the Commercial Operations Risk Committee (Regulated Risk Committee) and the Energy Supply Risk Committee (Competitive Risk Committee) various reports regarding compliance with policies, limits and procedures. The Regulated Risk Committee consists of AEPSC’s Chief Operating Officer, Chief Financial Officer, Executive Vice President of Generation, Senior Vice President of Commercial Operations and Chief Risk Officer. The Competitive Risk Committee consists of AEPSC’s Chief Operating Officer, Chief Financial Officer and Chief Risk Officer in addition to Energy Supply’s President and Vice President. For commercial activities, exchange traded derivatives, namely futures contracts, are generally fair valued based on unadjusted quoted prices in active markets and are classified as Level 1. Level 2 inputs primarily consist of OTC broker quotes in moderately active or less active markets, as well as exchange traded contracts where there is insufficient market liquidity to warrant inclusion in Level 1. Management verifies price curves using these broker quotes and classifies these fair values within Level 2 when substantially all of the fair value can be corroborated. Management typically obtains multiple broker quotes, which are nonbinding in nature but are based on recent trades in the marketplace. When multiple broker quotes are obtained, the quoted bid and ask prices are averaged. In certain circumstances, a broker quote may be discarded if it is a clear outlier. Management uses a historical correlation analysis between the broker quoted location and the illiquid locations. If the points are highly correlated, these locations are included within Level 2 as well. Certain OTC and bilaterally executed derivative instruments are executed in less active markets with a lower availability of pricing information. Illiquid transactions, complex structured transactions, FTRs and counterparty credit risk may require nonmarket based inputs. Some of these inputs may be internally developed or extrapolated and utilized to estimate fair value. When such inputs have a significant impact on the measurement of fair value, the instrument is categorized as Level 3. The main driver of contracts being classified as Level 3 is the inability to substantiate energy price curves in the market. A portion of the Level 3 instruments have been economically hedged which limits potential earnings volatility. AEP utilizes its trustee’s external pricing service to estimate the fair value of the underlying investments held in the nuclear trusts. AEP’s investment managers review and validate the prices utilized by the trustee to determine fair value. AEP’s management performs its own valuation testing to verify the fair values of the securities. AEP receives audit reports of the trustee’s operating controls and valuation processes. The trustee uses multiple pricing vendors for the assets held in the trusts. Assets in the nuclear trusts, Cash and Cash Equivalents, Other Temporary Investments and Restricted Cash for Securitized Funding are classified using the following methods. Equities are classified as Level 1 holdings if they are actively traded on exchanges. Items classified as Level 1 are investments in money market funds, fixed income and equity mutual funds and domestic equity securities. They are valued based on observable inputs, primarily unadjusted quoted prices in active markets for identical assets. Items classified as Level 2 are primarily investments in individual fixed income securities and cash equivalent funds. Fixed income securities generally do not trade on exchanges and do not have an official closing price but their valuation inputs are based on observable market data. Pricing vendors calculate bond valuations using financial models and matrices. The models use observable inputs including yields on benchmark securities, quotes by securities brokers, rating agency actions, discounts or premiums on securities compared to par prices, changes in yields for U.S. Treasury securities, corporate actions by bond issuers, prepayment schedules and histories, economic events and, for certain securities, adjustments to yields to reflect changes in the rate of inflation. Other securities with model-derived valuation inputs that are observable are also classified as Level 2 investments. Investments with unobservable valuation inputs are classified as Level 3 investments. Fair Value Measurements of Long-term Debt The fair values of Long-term Debt are based on quoted market prices, without credit enhancements, for the same or similar issues and the current interest rates offered for instruments with similar maturities classified as Level 2 measurement inputs. These instruments are not marked-to-market. The estimates presented are not necessarily indicative of the amounts that could be realized in a current market exchange. The book values and fair values of Long-term Debt for the Registrants as of March 31, 2016 and December 31, 2015 are summarized in the following table: March 31, 2016 December 31, 2015 Company Book Value Fair Value Book Value Fair Value (in millions) AEP $ 19,782.6 $ 22,052.8 $ 19,572.7 $ 21,201.3 APCo 3,919.3 4,597.8 3,930.7 4,416.7 I&M 2,366.6 2,595.4 2,000.0 2,193.6 OPCo 2,135.5 2,515.4 2,157.7 2,472.7 PSO 1,286.3 1,463.6 1,286.1 1,402.9 SWEPCo 2,272.4 2,483.4 2,273.5 2,417.2 Fair Value Measurements of Other Temporary Investments (Applies to AEP) Other Temporary Investments include funds held by trustees primarily for the payment of securitization bonds and securities available for sale, including marketable securities that management intends to hold for less than one year and investments by its protected cell of EIS. The following is a summary of Other Temporary Investments: March 31, 2016 Other Temporary Investments Cost Gross Gains Gross Losses Fair Value (in millions) Restricted Cash (a) $ 147.4 $ — $ — $ 147.4 Fixed Income Securities – Mutual Funds 91.4 0.1 — 91.5 Equity Securities – Mutual Funds 13.9 11.7 — 25.6 Total Other Temporary Investments $ 252.7 $ 11.8 $ — $ 264.5 December 31, 2015 Other Temporary Investments Cost Gross Gains Gross Losses Fair Value (in millions) Restricted Cash (a) $ 271.0 $ — $ — $ 271.0 Fixed Income Securities – Mutual Funds 91.1 — (0.7 ) 90.4 Equity Securities – Mutual Funds 13.7 11.7 — 25.4 Total Other Temporary Investments $ 375.8 $ 11.7 $ (0.7 ) $ 386.8 (a) Primarily represents amounts held for the repayment of debt. The following table provides the activity for fixed income and equity securities within Other Temporary Investments for the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 2015 (in millions) Proceeds from Investment Sales $ — $ — Purchases of Investments 0.4 0.4 Gross Realized Gains on Investment Sales — — Gross Realized Losses on Investment Sales — — As of March 31, 2016 and December 31, 2015 , AEP had no Other Temporary Investments with an unrealized loss position. As of March 31, 2016 , fixed income securities were primarily debt based mutual funds with short and intermediate maturities. Mutual funds may be sold and do not contain maturity dates. For details of the reasons for changes in Securities Available for Sale included in Accumulated Other Comprehensive Income (Loss) for the three months ended March 31, 2016 and 2015 , see Note 3 . Fair Value Measurements of Trust Assets for Decommissioning and SNF Disposal (Applies to AEP and I&M) Nuclear decommissioning and spent nuclear fuel trust funds represent funds that regulatory commissions allow I&M to collect through rates to fund future decommissioning and spent nuclear fuel disposal liabilities. By rules or orders, the IURC, the MPSC and the FERC established investment limitations and general risk management guidelines. In general, limitations include: • Acceptable investments (rated investment grade or above when purchased). • Maximum percentage invested in a specific type of investment. • Prohibition of investment in obligations of AEP, I&M or their affiliates. • Withdrawals permitted only for payment of decommissioning costs and trust expenses. I&M maintains trust records for each regulatory jurisdiction. Regulatory approval is required to withdraw decommissioning funds. These funds are managed by external investment managers who must comply with the guidelines and rules of the applicable regulatory authorities. The trust assets are invested to optimize the net of tax earnings of the trust giving consideration to liquidity, risk, diversification and other prudent investment objectives. I&M records securities held in these trust funds in Spent Nuclear Fuel and Decommissioning Trusts on its balance sheets. I&M records these securities at fair value. I&M classifies securities in the trust funds as available-for-sale due to their long-term purpose. Other-than-temporary impairments for investments in both debt and equity securities are considered realized losses as a result of securities being managed by an external investment management firm. The external investment management firm makes specific investment decisions regarding the debt and equity investments held in these trusts and generally intends to sell debt securities in an unrealized loss position as part of a tax optimization strategy. Impairments reduce the cost basis of the securities which will affect any future unrealized gain or realized gain or loss due to the adjusted cost of investment. I&M records unrealized gains and other-than-temporary impairments from securities in these trust funds as adjustments to the regulatory liability account for the nuclear decommissioning trust funds and to regulatory assets or liabilities for the SNF disposal trust funds in accordance with their treatment in rates. Consequently, changes in fair value of trust assets do not affect earnings or AOCI. The following is a summary of nuclear trust fund investments as of March 31, 2016 and December 31, 2015 : March 31, 2016 December 31, 2015 Fair Value Gross Unrealized Gains Other-Than-Temporary Impairments Fair Value Gross Unrealized Gains Other-Than-Temporary Impairments (in millions) Cash and Cash Equivalents $ 142.0 $ — $ — $ 168.3 $ — $ — Fixed Income Securities: United States Government 761.1 52.3 (2.1 ) 731.1 35.9 (2.6 ) Corporate Debt 68.9 4.9 (1.0 ) 57.9 3.2 (1.1 ) State and Local Government 29.0 1.2 (0.3 ) 22.2 1.1 (0.3 ) Subtotal Fixed Income Securities 859.0 58.4 (3.4 ) 811.2 40.2 (4.0 ) Equity Securities - Domestic 1,151.4 583.5 (78.9 ) 1,126.9 571.6 (79.3 ) Spent Nuclear Fuel and Decommissioning Trusts $ 2,152.4 $ 641.9 $ (82.3 ) $ 2,106.4 $ 611.8 $ (83.3 ) The following table provides the securities activity within the decommissioning and SNF trusts for the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 2015 (in millions) Proceeds from Investment Sales $ 1,137.7 $ 228.2 Purchases of Investments 1,151.6 245.8 Gross Realized Gains on Investment Sales 15.8 11.2 Gross Realized Losses on Investment Sales 7.8 3.8 The adjusted cost of fixed income securities was $801 million and $771 million as of March 31, 2016 and December 31, 2015 , respectively. The adjusted cost of equity securities was $568 million and $555 million as of March 31, 2016 and December 31, 2015 , respectively. The fair value of fixed income securities held in the nuclear trust funds, summarized by contractual maturities, as of March 31, 2016 was as follows: Fair Value of Fixed Income Securities (in millions) Within 1 year $ 175.4 1 year – 5 years 369.6 5 years – 10 years 133.0 After 10 years 181.0 Total $ 859.0 Fair Value Measurements of Financial Assets and Liabilities The following tables set forth, by level within the fair value hierarchy, the Registrants’ financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2016 and December 31, 2015 . As required by the accounting guidance for “Fair Value Measurements and Disclosures,” financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Management’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. There have not been any significant changes in management’s valuation techniques. AEP Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 9.6 $ 4.4 $ — $ 176.4 $ 190.4 Other Temporary Investments Restricted Cash (a) 129.2 7.6 — 10.6 147.4 Fixed Income Securities – Mutual Funds 91.5 — — — 91.5 Equity Securities – Mutual Funds (b) 25.6 — — — 25.6 Total Other Temporary Investments 246.3 7.6 — 10.6 264.5 Risk Management Assets Risk Management Commodity Contracts (c) (d) 10.7 585.5 201.8 (346.0 ) 452.0 Cash Flow Hedges: Commodity Hedges (c) — 11.4 8.1 0.3 19.8 Fair Value Hedges — 0.5 — 0.4 0.9 Total Risk Management Assets 10.7 597.4 209.9 (345.3 ) 472.7 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 135.3 — — 6.7 142.0 Fixed Income Securities: United States Government — 761.1 — — 761.1 Corporate Debt — 68.9 — — 68.9 State and Local Government — 29.0 — — 29.0 Subtotal Fixed Income Securities — 859.0 — — 859.0 Equity Securities – Domestic (b) 1,151.4 — — — 1,151.4 Total Spent Nuclear Fuel and Decommissioning Trusts 1,286.7 859.0 — 6.7 2,152.4 Total Assets $ 1,553.3 $ 1,468.4 $ 209.9 $ (151.6 ) $ 3,080.0 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (d) $ 20.5 $ 569.2 $ 58.5 $ (377.2 ) $ 271.0 Cash Flow Hedges: Commodity Hedges (c) — 29.7 10.1 0.3 40.1 Interest Rate/Foreign Currency Hedges — 0.4 — — 0.4 Fair Value Hedges — — — 0.4 0.4 Total Risk Management Liabilities $ 20.5 $ 599.3 $ 68.6 $ (376.5 ) $ 311.9 AEP Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 3.9 $ 4.3 $ — $ 168.2 $ 176.4 Other Temporary Investments Restricted Cash (a) 230.0 7.7 — 33.3 271.0 Fixed Income Securities – Mutual Funds 90.4 — — — 90.4 Equity Securities – Mutual Funds (b) 25.4 — — — 25.4 Total Other Temporary Investments 345.8 7.7 — 33.3 386.8 Risk Management Assets Risk Management Commodity Contracts (c) (f) 11.5 495.0 219.7 (287.7 ) 438.5 Cash Flow Hedges: Commodity Hedges (c) — 15.9 1.0 0.7 17.6 Fair Value Hedges — — — 0.1 0.1 Total Risk Management Assets 11.5 510.9 220.7 (286.9 ) 456.2 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 160.5 — — 7.8 168.3 Fixed Income Securities: United States Government — 731.1 — — 731.1 Corporate Debt — 57.9 — — 57.9 State and Local Government — 22.2 — — 22.2 Subtotal Fixed Income Securities — 811.2 — — 811.2 Equity Securities – Domestic (b) 1,126.9 — — — 1,126.9 Total Spent Nuclear Fuel and Decommissioning Trusts 1,287.4 811.2 — 7.8 2,106.4 Total Assets $ 1,648.6 $ 1,334.1 $ 220.7 $ (77.6 ) $ 3,125.8 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (f) $ 24.1 $ 471.5 $ 67.3 $ (326.3 ) $ 236.6 Cash Flow Hedges: Commodity Hedges (c) — 18.9 6.5 0.7 26.1 Interest Rate/Foreign Currency Hedges — 0.4 — — 0.4 Fair Value Hedges — 3.0 — 0.1 3.1 Total Risk Management Liabilities $ 24.1 $ 493.8 $ 73.8 $ (325.5 ) $ 266.2 APCo Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ 7.5 $ — $ — $ 0.1 $ 7.6 Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) 0.2 16.2 8.2 (12.4 ) 12.2 Total Assets: $ 7.7 $ 16.2 $ 8.2 $ (12.3 ) $ 19.8 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.2 $ 17.7 $ 5.6 $ (13.0 ) $ 10.5 APCo Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ 14.8 $ — $ — $ 0.1 $ 14.9 Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) 0.2 13.9 12.2 (10.6 ) 15.7 Total Assets: $ 15.0 $ 13.9 $ 12.2 $ (10.5 ) $ 30.6 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.2 $ 17.8 $ 0.5 $ (13.6 ) $ 4.9 I&M Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 12.5 $ 5.5 $ (8.6 ) $ 9.5 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 135.3 — — 6.7 142.0 Fixed Income Securities: United States Government — 761.1 — — 761.1 Corporate Debt — 68.9 — — 68.9 State and Local Government — 29.0 — — 29.0 Subtotal Fixed Income Securities — 859.0 — — 859.0 Equity Securities - Domestic (b) 1,151.4 — — — 1,151.4 Total Spent Nuclear Fuel and Decommissioning Trusts 1,286.7 859.0 — 6.7 2,152.4 Total Assets $ 1,286.8 $ 871.5 $ 5.5 $ (1.9 ) $ 2,161.9 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 14.2 $ 1.8 $ (8.7 ) $ 7.4 I&M Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 17.0 $ 6.3 $ (11.1 ) $ 12.3 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 160.5 — — 7.8 168.3 Fixed Income Securities: United States Government — 731.1 — — 731.1 Corporate Debt — 57.9 — — 57.9 State and Local Government — 22.2 — — 22.2 Subtotal Fixed Income Securities — 811.2 — — 811.2 Equity Securities - Domestic (b) 1,126.9 — — — 1,126.9 Total Spent Nuclear Fuel and Decommissioning Trusts 1,287.4 811.2 — 7.8 2,106.4 Total Assets $ 1,287.5 $ 828.2 $ 6.3 $ (3.3 ) $ 2,118.7 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 17.5 $ 2.0 $ (11.7 ) $ 7.9 OPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ 16.2 $ — $ — $ — $ 16.2 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.6 $ 10.9 $ (0.2 ) $ 11.3 OPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ — $ — $ — $ 27.7 $ 27.7 Risk Management Assets Risk Management Commodity Contracts (c) (g) — — 16.0 3.2 19.2 Total Assets $ — $ — $ 16.0 $ 30.9 $ 46.9 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.8 $ 0.1 $ 2.7 $ 3.6 PSO Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets Risk Management Commodity Contracts (c) (g) $ — $ 0.1 $ 0.7 $ (0.1 ) $ 0.7 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.3 $ 0.1 $ (0.2 ) $ 0.2 PSO Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets Risk Management Commodity Contracts (c) (g) $ — $ — $ 0.7 $ (0.1 ) $ 0.6 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.5 $ 0.1 $ (0.4 ) $ 0.2 SWEPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 9.4 $ — $ — $ 2.9 $ 12.3 Risk Management Assets Risk Management Commodity Contracts (c) (g) — 0.1 0.8 (0.1 ) 0.8 Total Assets $ 9.4 $ 0.1 $ 0.8 $ 2.8 $ 13.1 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 5.5 $ 0.1 $ (0.3 ) $ 5.3 SWEPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 3.6 $ — $ — $ 1.6 $ 5.2 Risk Management Assets Risk Management Commodity Contracts (c) (g) — — 0.9 (0.1 ) 0.8 Total Assets $ 3.6 $ — $ 0.9 $ 1.5 $ 6.0 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 5.5 $ 0.1 $ (0.4 ) $ 5.2 (a) Amounts in “Other’’ column primarily represent cash deposits in bank accounts with financial institutions or with third parties. Level 1 and Level 2 amounts primarily represent investments in money market funds. (b) Amounts represent publicly traded equity securities and equity-based mutual funds. (c) Amounts in “Other’’ column primarily represent counterparty netting of risk management and hedging contracts and associated cash collateral under the accounting guidance for “Derivatives and Hedging.’’ (d) The March 31, 2016 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(5) million in 2016 and $(5) million in periods 2017-2019; Level 2 matures $3 million in 2016, $9 million in periods 2017-2019, $3 million in periods 2020-2021 and $1 million in periods 2022-2032; Level 3 matures $17 million in 2016, $37 million in periods 2017-2019, $21 million in periods 2020-2021 and $69 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. (e) Amounts in “Other’’ column primarily represent accrued interest receivables from financial institutions. Level 1 amounts primarily represent investments in money market funds. (f) The December 31, 2015 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(9) million in 2016 and $(4) million in periods 2017-2019; Level 2 matures $2 million in 2016, $18 million in periods 2017-2019 and $4 million in periods 2020-2021; Level 3 matures $28 million in 2016, $29 million in periods 2017-2019, $19 million in periods 2020-2021 and $76 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. (g) Substantially comprised of power contracts for APCo, I&M and OPCo and coal contracts for PSO and SWEPCo. There were no transfers between Level 1 and Level 2 during the three months ended March 31, 2016 and 2015 . The following tables set forth a reconciliation of changes in the fair value of net trading derivatives classified as Level 3 in the fair value hierarchy: Three Months Ended March 31, 2016 AEP APCo (a) I&M (a) OPCo PSO SWEPCo (in millions) Balance as of December 31, 2015 $ 146.9 $ 11.7 $ 4.3 $ 15.9 $ 0.6 $ 0.8 Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (b) (c) 23.5 15.3 2.5 (0.6 ) (0.8 ) 4.6 Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (b) 21.9 — — — — — Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income 1.3 — — — — — Purchases, Issuances and Settlements (d) (42.7 ) (27.7 ) (4.6 ) 1.4 0.5 (4.9 ) Transfers out of Level 3 (f) (g) 10.9 0.1 0.1 — — — Changes in Fair Value Allocated to Regulated Jurisdictions (h) (20.5 ) 3.2 1.4 (27.6 ) 0.3 0.2 Balance as of March 31, 2016 $ 141.3 $ 2.6 $ 3.7 $ (10.9 ) $ 0.6 $ 0.7 Three Months Ended March 31, 2015 AEP APCo I&M OPCo PSO SWEPCo (in millions) Balance as of December 31, 2014 $ 150.8 $ 15.8 $ 14.7 $ 48.4 $ (0.3 ) $ (0.5 ) Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (b) (c) 8.6 2.2 0.1 0.2 (0.3 ) 5.8 Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (b) 5.2 — — — — — Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income (1.9 ) — — — — — Purchases, Issuances and Settlements (d) (38.5 ) (13.4 ) (9.0 ) (6.8 ) 0.6 (5.3 ) Transfers into Level 3 (e) (f) 15.3 — — — — — Transfers out of Level 3 (f) (g) (12.4 ) — — — — — Changes in Fair Value Allocated to Regulated Jurisdictions (h) 3.5 1.4 (0.2 ) 4.1 (0.7 ) (1.2 ) Balance as of March 31, 2015 $ 130.6 $ 6.0 $ 5.6 $ 45.9 $ (0.7 ) $ (1.2 ) (a) Includes both affiliated and nonaffiliated transactions. (b) Included in revenues on the condensed statements of income. (c) Represents the change in fair value between the beginning of the reporting period and the settlement of the risk management commodity contract. (d) Represents the settlement of risk management commodity contracts for the reporting period. (e) Represents existing assets or liabilities that were previously categorized as Level 2. (f) Transfers are recognized based on their value at the beginning of the reporting period that the transfer occurred. (g) Represents existing assets or liabilities that were previously categorized as Level 3. (h) Relates to the net gains (losses) of those contracts that are not reflected on the condensed statements of income. These net gains (losses) are recorded as regulatory liabilities/assets. The following tables quantify the significant unobservable inputs used in developing the fair value of Level 3 positions as of March 31, 2016 and December 31, 2015 : Significant Unobservable Inputs March 31, 2016 AEP Significant Input/Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input Low High Average (in millions) Energy Contracts $ 207.6 $ 59.5 Discounted Cash Flow Forward Market Price (a) $ 8.77 $ 162.36 $ 45.45 Counterparty Credit Risk (b) 251 669 NA FTRs 2.3 9.1 Discounted Cash Flow Forward Market Price (a) $ (17.72 ) $ 10.50 $ 0.60 Total $ 209.9 $ 68.6 Significant Unobservable Inputs December 31, 2015 AEP Significant Input/Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input Low High Average (in millions) Energy Contracts $ 212.3 $ 70.3 Discounted Cash Flow Forward Market Price (a) $ 9.69 $ 165.36 $ 36.35 Counterparty Credit Risk (b) 670 FTRs 8.4 3.5 Discounted Cash Flow Forward Market Price (a) $ (6.99 ) $ 10.34 $ 1.10 Total $ 220.7 $ 73.8 Significant Unobservable Inputs March 31, 2016 APCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 8.2 $ 0.1 Discounted Cash Flow Forward Market Price $ 8.77 $ 47.05 $ 29.14 FTRs — 5.5 Discounted Cash Flow Forward Market Price 0.42 5.58 1.90 Total $ 8.2 $ 5.6 Significant Unobservable Inputs December 31, 2015 APCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 7.9 $ 0.2 Discounted Cash Flow Forward Market Price $ 12.61 $ 47.24 $ 32.38 FTRs 4.3 0.3 Discounted Cash Flow Forward Market Price (6.96 ) 8.43 1.34 Total $ 12.2 $ 0.5 Significant Unobservable Inputs March 31, 2016 I&M Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 5.5 $ 0.1 Discounted Cash Flow Forward Market Price $ 8.77 $ 47.05 $ 29.14 FTRs — 1.7 Discounted Cash Flow Forward Market Price (0.07 ) 5.58 0.42 Total $ 5.5 $ 1.8 Significant Unobservable Inputs December 31, 2015 I&M Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 6.0 $ 0.2 Discounted Cash Flow Forward Market Price $ 12.61 $ 47.24 $ 32.38 FTRs 0.3 1.8 Discounted Cash Flow Forward Market Price (6.96 ) 8.43 1.34 Total $ 6.3 $ 2.0 Significant Unobservable Inputs March 31, 2016 OPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input Low High Average (in millions) Energy Contracts $ — $ 10.9 Discounted Cash Flow Forward Market Price (a) $ 36.41 $ 162.36 $ 84.24 Counterparty Credit Risk (b) 251 Total $ — $ 10.9 Significant Unobservable Inputs December 31, 2015 OPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 16.0 $ 0.1 Discounted Cash Flow Forward Market Price $ 41.61 $ 165.36 $ 86.84 Significant Unobservable Inputs March 31, 2016 PSO Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.7 $ 0.1 Discounted Cash Flow Forward Market Price $ (17.72 ) $ 1.80 $ (0.59 ) Significant Unobservable Inputs December 31, 2015 PSO Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.7 $ 0.1 Discounted Cash Flow Forward Market Price $ (6.96 ) $ 8.43 $ 1.34 Significant Unobservable Inputs March 31, 2016 SWEPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.8 $ 0.1 Discounted Cash Flow Forward Market Price $ (17.72 ) $ 1.80 $ (0.59 ) Significant Unobservable Inputs December 31, 2015 SWEPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.9 $ 0.1 Discounted Cash Flow Forward Market Price $ (6.96 ) $ 8.43 $ 1.34 (a) Represents market prices in dollars per MWh. (b) Represents average price of credit default swaps used to calculate counterparty credit risk, reported in basis points. NA Not applicable. The following table provides sensitivity of fair value measurements to increases (decreases) in significant unobservable inputs related to Energy Contracts and FTRs for the Registrants as of March 31, 2016 and December 31, 2015 : Sensitivity of Fair Value Measurements Significant Unobservable Input Position Change in Input Impact on Fair Value Measurement Forward Market Price Buy Increase (Decrease) Higher (Lower) Forward Market Price Sell Increase (Decrease) Lower (Higher) Counterparty Credit Risk Loss Increase (Decrease) Higher (Lower) Counterparty Credit Risk Gain Increase (Decrease) Lower (Higher) |
Indiana Michigan Power Co [Member] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The disclosures in this note apply to all Registrants unless indicated otherwise. Fair Value Hierarchy and Valuation Techniques The accounting guidance for “Fair Value Measurements and Disclosures” establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2. When quoted market prices are not available, pricing may be completed using comparable securities, dealer values, operating data and general market conditions to determine fair value. Valuation models utilize various inputs such as commodity, interest rate and, to a lesser degree, volatility and credit that include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, market corroborated inputs (i.e. inputs derived principally from, or correlated to, observable market data) and other observable inputs for the asset or liability. The amount of risk taken is determined by the Commercial Operations, Energy Supply and Finance groups in accordance with established risk management policies as approved by the Finance Committee of AEP’s Board of Directors. AEPSC’s market risk oversight staff independently monitors risk policies, procedures and risk levels and provides members of the Commercial Operations Risk Committee (Regulated Risk Committee) and the Energy Supply Risk Committee (Competitive Risk Committee) various reports regarding compliance with policies, limits and procedures. The Regulated Risk Committee consists of AEPSC’s Chief Operating Officer, Chief Financial Officer, Executive Vice President of Generation, Senior Vice President of Commercial Operations and Chief Risk Officer. The Competitive Risk Committee consists of AEPSC’s Chief Operating Officer, Chief Financial Officer and Chief Risk Officer in addition to Energy Supply’s President and Vice President. For commercial activities, exchange traded derivatives, namely futures contracts, are generally fair valued based on unadjusted quoted prices in active markets and are classified as Level 1. Level 2 inputs primarily consist of OTC broker quotes in moderately active or less active markets, as well as exchange traded contracts where there is insufficient market liquidity to warrant inclusion in Level 1. Management verifies price curves using these broker quotes and classifies these fair values within Level 2 when substantially all of the fair value can be corroborated. Management typically obtains multiple broker quotes, which are nonbinding in nature but are based on recent trades in the marketplace. When multiple broker quotes are obtained, the quoted bid and ask prices are averaged. In certain circumstances, a broker quote may be discarded if it is a clear outlier. Management uses a historical correlation analysis between the broker quoted location and the illiquid locations. If the points are highly correlated, these locations are included within Level 2 as well. Certain OTC and bilaterally executed derivative instruments are executed in less active markets with a lower availability of pricing information. Illiquid transactions, complex structured transactions, FTRs and counterparty credit risk may require nonmarket based inputs. Some of these inputs may be internally developed or extrapolated and utilized to estimate fair value. When such inputs have a significant impact on the measurement of fair value, the instrument is categorized as Level 3. The main driver of contracts being classified as Level 3 is the inability to substantiate energy price curves in the market. A portion of the Level 3 instruments have been economically hedged which limits potential earnings volatility. AEP utilizes its trustee’s external pricing service to estimate the fair value of the underlying investments held in the nuclear trusts. AEP’s investment managers review and validate the prices utilized by the trustee to determine fair value. AEP’s management performs its own valuation testing to verify the fair values of the securities. AEP receives audit reports of the trustee’s operating controls and valuation processes. The trustee uses multiple pricing vendors for the assets held in the trusts. Assets in the nuclear trusts, Cash and Cash Equivalents, Other Temporary Investments and Restricted Cash for Securitized Funding are classified using the following methods. Equities are classified as Level 1 holdings if they are actively traded on exchanges. Items classified as Level 1 are investments in money market funds, fixed income and equity mutual funds and domestic equity securities. They are valued based on observable inputs, primarily unadjusted quoted prices in active markets for identical assets. Items classified as Level 2 are primarily investments in individual fixed income securities and cash equivalent funds. Fixed income securities generally do not trade on exchanges and do not have an official closing price but their valuation inputs are based on observable market data. Pricing vendors calculate bond valuations using financial models and matrices. The models use observable inputs including yields on benchmark securities, quotes by securities brokers, rating agency actions, discounts or premiums on securities compared to par prices, changes in yields for U.S. Treasury securities, corporate actions by bond issuers, prepayment schedules and histories, economic events and, for certain securities, adjustments to yields to reflect changes in the rate of inflation. Other securities with model-derived valuation inputs that are observable are also classified as Level 2 investments. Investments with unobservable valuation inputs are classified as Level 3 investments. Fair Value Measurements of Long-term Debt The fair values of Long-term Debt are based on quoted market prices, without credit enhancements, for the same or similar issues and the current interest rates offered for instruments with similar maturities classified as Level 2 measurement inputs. These instruments are not marked-to-market. The estimates presented are not necessarily indicative of the amounts that could be realized in a current market exchange. The book values and fair values of Long-term Debt for the Registrants as of March 31, 2016 and December 31, 2015 are summarized in the following table: March 31, 2016 December 31, 2015 Company Book Value Fair Value Book Value Fair Value (in millions) AEP $ 19,782.6 $ 22,052.8 $ 19,572.7 $ 21,201.3 APCo 3,919.3 4,597.8 3,930.7 4,416.7 I&M 2,366.6 2,595.4 2,000.0 2,193.6 OPCo 2,135.5 2,515.4 2,157.7 2,472.7 PSO 1,286.3 1,463.6 1,286.1 1,402.9 SWEPCo 2,272.4 2,483.4 2,273.5 2,417.2 Fair Value Measurements of Other Temporary Investments (Applies to AEP) Other Temporary Investments include funds held by trustees primarily for the payment of securitization bonds and securities available for sale, including marketable securities that management intends to hold for less than one year and investments by its protected cell of EIS. The following is a summary of Other Temporary Investments: March 31, 2016 Other Temporary Investments Cost Gross Gains Gross Losses Fair Value (in millions) Restricted Cash (a) $ 147.4 $ — $ — $ 147.4 Fixed Income Securities – Mutual Funds 91.4 0.1 — 91.5 Equity Securities – Mutual Funds 13.9 11.7 — 25.6 Total Other Temporary Investments $ 252.7 $ 11.8 $ — $ 264.5 December 31, 2015 Other Temporary Investments Cost Gross Gains Gross Losses Fair Value (in millions) Restricted Cash (a) $ 271.0 $ — $ — $ 271.0 Fixed Income Securities – Mutual Funds 91.1 — (0.7 ) 90.4 Equity Securities – Mutual Funds 13.7 11.7 — 25.4 Total Other Temporary Investments $ 375.8 $ 11.7 $ (0.7 ) $ 386.8 (a) Primarily represents amounts held for the repayment of debt. The following table provides the activity for fixed income and equity securities within Other Temporary Investments for the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 2015 (in millions) Proceeds from Investment Sales $ — $ — Purchases of Investments 0.4 0.4 Gross Realized Gains on Investment Sales — — Gross Realized Losses on Investment Sales — — As of March 31, 2016 and December 31, 2015 , AEP had no Other Temporary Investments with an unrealized loss position. As of March 31, 2016 , fixed income securities were primarily debt based mutual funds with short and intermediate maturities. Mutual funds may be sold and do not contain maturity dates. For details of the reasons for changes in Securities Available for Sale included in Accumulated Other Comprehensive Income (Loss) for the three months ended March 31, 2016 and 2015 , see Note 3 . Fair Value Measurements of Trust Assets for Decommissioning and SNF Disposal (Applies to AEP and I&M) Nuclear decommissioning and spent nuclear fuel trust funds represent funds that regulatory commissions allow I&M to collect through rates to fund future decommissioning and spent nuclear fuel disposal liabilities. By rules or orders, the IURC, the MPSC and the FERC established investment limitations and general risk management guidelines. In general, limitations include: • Acceptable investments (rated investment grade or above when purchased). • Maximum percentage invested in a specific type of investment. • Prohibition of investment in obligations of AEP, I&M or their affiliates. • Withdrawals permitted only for payment of decommissioning costs and trust expenses. I&M maintains trust records for each regulatory jurisdiction. Regulatory approval is required to withdraw decommissioning funds. These funds are managed by external investment managers who must comply with the guidelines and rules of the applicable regulatory authorities. The trust assets are invested to optimize the net of tax earnings of the trust giving consideration to liquidity, risk, diversification and other prudent investment objectives. I&M records securities held in these trust funds in Spent Nuclear Fuel and Decommissioning Trusts on its balance sheets. I&M records these securities at fair value. I&M classifies securities in the trust funds as available-for-sale due to their long-term purpose. Other-than-temporary impairments for investments in both debt and equity securities are considered realized losses as a result of securities being managed by an external investment management firm. The external investment management firm makes specific investment decisions regarding the debt and equity investments held in these trusts and generally intends to sell debt securities in an unrealized loss position as part of a tax optimization strategy. Impairments reduce the cost basis of the securities which will affect any future unrealized gain or realized gain or loss due to the adjusted cost of investment. I&M records unrealized gains and other-than-temporary impairments from securities in these trust funds as adjustments to the regulatory liability account for the nuclear decommissioning trust funds and to regulatory assets or liabilities for the SNF disposal trust funds in accordance with their treatment in rates. Consequently, changes in fair value of trust assets do not affect earnings or AOCI. The following is a summary of nuclear trust fund investments as of March 31, 2016 and December 31, 2015 : March 31, 2016 December 31, 2015 Fair Value Gross Unrealized Gains Other-Than-Temporary Impairments Fair Value Gross Unrealized Gains Other-Than-Temporary Impairments (in millions) Cash and Cash Equivalents $ 142.0 $ — $ — $ 168.3 $ — $ — Fixed Income Securities: United States Government 761.1 52.3 (2.1 ) 731.1 35.9 (2.6 ) Corporate Debt 68.9 4.9 (1.0 ) 57.9 3.2 (1.1 ) State and Local Government 29.0 1.2 (0.3 ) 22.2 1.1 (0.3 ) Subtotal Fixed Income Securities 859.0 58.4 (3.4 ) 811.2 40.2 (4.0 ) Equity Securities - Domestic 1,151.4 583.5 (78.9 ) 1,126.9 571.6 (79.3 ) Spent Nuclear Fuel and Decommissioning Trusts $ 2,152.4 $ 641.9 $ (82.3 ) $ 2,106.4 $ 611.8 $ (83.3 ) The following table provides the securities activity within the decommissioning and SNF trusts for the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 2015 (in millions) Proceeds from Investment Sales $ 1,137.7 $ 228.2 Purchases of Investments 1,151.6 245.8 Gross Realized Gains on Investment Sales 15.8 11.2 Gross Realized Losses on Investment Sales 7.8 3.8 The adjusted cost of fixed income securities was $801 million and $771 million as of March 31, 2016 and December 31, 2015 , respectively. The adjusted cost of equity securities was $568 million and $555 million as of March 31, 2016 and December 31, 2015 , respectively. The fair value of fixed income securities held in the nuclear trust funds, summarized by contractual maturities, as of March 31, 2016 was as follows: Fair Value of Fixed Income Securities (in millions) Within 1 year $ 175.4 1 year – 5 years 369.6 5 years – 10 years 133.0 After 10 years 181.0 Total $ 859.0 Fair Value Measurements of Financial Assets and Liabilities The following tables set forth, by level within the fair value hierarchy, the Registrants’ financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2016 and December 31, 2015 . As required by the accounting guidance for “Fair Value Measurements and Disclosures,” financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Management’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. There have not been any significant changes in management’s valuation techniques. AEP Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 9.6 $ 4.4 $ — $ 176.4 $ 190.4 Other Temporary Investments Restricted Cash (a) 129.2 7.6 — 10.6 147.4 Fixed Income Securities – Mutual Funds 91.5 — — — 91.5 Equity Securities – Mutual Funds (b) 25.6 — — — 25.6 Total Other Temporary Investments 246.3 7.6 — 10.6 264.5 Risk Management Assets Risk Management Commodity Contracts (c) (d) 10.7 585.5 201.8 (346.0 ) 452.0 Cash Flow Hedges: Commodity Hedges (c) — 11.4 8.1 0.3 19.8 Fair Value Hedges — 0.5 — 0.4 0.9 Total Risk Management Assets 10.7 597.4 209.9 (345.3 ) 472.7 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 135.3 — — 6.7 142.0 Fixed Income Securities: United States Government — 761.1 — — 761.1 Corporate Debt — 68.9 — — 68.9 State and Local Government — 29.0 — — 29.0 Subtotal Fixed Income Securities — 859.0 — — 859.0 Equity Securities – Domestic (b) 1,151.4 — — — 1,151.4 Total Spent Nuclear Fuel and Decommissioning Trusts 1,286.7 859.0 — 6.7 2,152.4 Total Assets $ 1,553.3 $ 1,468.4 $ 209.9 $ (151.6 ) $ 3,080.0 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (d) $ 20.5 $ 569.2 $ 58.5 $ (377.2 ) $ 271.0 Cash Flow Hedges: Commodity Hedges (c) — 29.7 10.1 0.3 40.1 Interest Rate/Foreign Currency Hedges — 0.4 — — 0.4 Fair Value Hedges — — — 0.4 0.4 Total Risk Management Liabilities $ 20.5 $ 599.3 $ 68.6 $ (376.5 ) $ 311.9 AEP Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 3.9 $ 4.3 $ — $ 168.2 $ 176.4 Other Temporary Investments Restricted Cash (a) 230.0 7.7 — 33.3 271.0 Fixed Income Securities – Mutual Funds 90.4 — — — 90.4 Equity Securities – Mutual Funds (b) 25.4 — — — 25.4 Total Other Temporary Investments 345.8 7.7 — 33.3 386.8 Risk Management Assets Risk Management Commodity Contracts (c) (f) 11.5 495.0 219.7 (287.7 ) 438.5 Cash Flow Hedges: Commodity Hedges (c) — 15.9 1.0 0.7 17.6 Fair Value Hedges — — — 0.1 0.1 Total Risk Management Assets 11.5 510.9 220.7 (286.9 ) 456.2 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 160.5 — — 7.8 168.3 Fixed Income Securities: United States Government — 731.1 — — 731.1 Corporate Debt — 57.9 — — 57.9 State and Local Government — 22.2 — — 22.2 Subtotal Fixed Income Securities — 811.2 — — 811.2 Equity Securities – Domestic (b) 1,126.9 — — — 1,126.9 Total Spent Nuclear Fuel and Decommissioning Trusts 1,287.4 811.2 — 7.8 2,106.4 Total Assets $ 1,648.6 $ 1,334.1 $ 220.7 $ (77.6 ) $ 3,125.8 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (f) $ 24.1 $ 471.5 $ 67.3 $ (326.3 ) $ 236.6 Cash Flow Hedges: Commodity Hedges (c) — 18.9 6.5 0.7 26.1 Interest Rate/Foreign Currency Hedges — 0.4 — — 0.4 Fair Value Hedges — 3.0 — 0.1 3.1 Total Risk Management Liabilities $ 24.1 $ 493.8 $ 73.8 $ (325.5 ) $ 266.2 APCo Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ 7.5 $ — $ — $ 0.1 $ 7.6 Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) 0.2 16.2 8.2 (12.4 ) 12.2 Total Assets: $ 7.7 $ 16.2 $ 8.2 $ (12.3 ) $ 19.8 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.2 $ 17.7 $ 5.6 $ (13.0 ) $ 10.5 APCo Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ 14.8 $ — $ — $ 0.1 $ 14.9 Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) 0.2 13.9 12.2 (10.6 ) 15.7 Total Assets: $ 15.0 $ 13.9 $ 12.2 $ (10.5 ) $ 30.6 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.2 $ 17.8 $ 0.5 $ (13.6 ) $ 4.9 I&M Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 12.5 $ 5.5 $ (8.6 ) $ 9.5 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 135.3 — — 6.7 142.0 Fixed Income Securities: United States Government — 761.1 — — 761.1 Corporate Debt — 68.9 — — 68.9 State and Local Government — 29.0 — — 29.0 Subtotal Fixed Income Securities — 859.0 — — 859.0 Equity Securities - Domestic (b) 1,151.4 — — — 1,151.4 Total Spent Nuclear Fuel and Decommissioning Trusts 1,286.7 859.0 — 6.7 2,152.4 Total Assets $ 1,286.8 $ 871.5 $ 5.5 $ (1.9 ) $ 2,161.9 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 14.2 $ 1.8 $ (8.7 ) $ 7.4 I&M Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 17.0 $ 6.3 $ (11.1 ) $ 12.3 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 160.5 — — 7.8 168.3 Fixed Income Securities: United States Government — 731.1 — — 731.1 Corporate Debt — 57.9 — — 57.9 State and Local Government — 22.2 — — 22.2 Subtotal Fixed Income Securities — 811.2 — — 811.2 Equity Securities - Domestic (b) 1,126.9 — — — 1,126.9 Total Spent Nuclear Fuel and Decommissioning Trusts 1,287.4 811.2 — 7.8 2,106.4 Total Assets $ 1,287.5 $ 828.2 $ 6.3 $ (3.3 ) $ 2,118.7 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 17.5 $ 2.0 $ (11.7 ) $ 7.9 OPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ 16.2 $ — $ — $ — $ 16.2 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.6 $ 10.9 $ (0.2 ) $ 11.3 OPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ — $ — $ — $ 27.7 $ 27.7 Risk Management Assets Risk Management Commodity Contracts (c) (g) — — 16.0 3.2 19.2 Total Assets $ — $ — $ 16.0 $ 30.9 $ 46.9 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.8 $ 0.1 $ 2.7 $ 3.6 PSO Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets Risk Management Commodity Contracts (c) (g) $ — $ 0.1 $ 0.7 $ (0.1 ) $ 0.7 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.3 $ 0.1 $ (0.2 ) $ 0.2 PSO Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets Risk Management Commodity Contracts (c) (g) $ — $ — $ 0.7 $ (0.1 ) $ 0.6 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.5 $ 0.1 $ (0.4 ) $ 0.2 SWEPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 9.4 $ — $ — $ 2.9 $ 12.3 Risk Management Assets Risk Management Commodity Contracts (c) (g) — 0.1 0.8 (0.1 ) 0.8 Total Assets $ 9.4 $ 0.1 $ 0.8 $ 2.8 $ 13.1 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 5.5 $ 0.1 $ (0.3 ) $ 5.3 SWEPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 3.6 $ — $ — $ 1.6 $ 5.2 Risk Management Assets Risk Management Commodity Contracts (c) (g) — — 0.9 (0.1 ) 0.8 Total Assets $ 3.6 $ — $ 0.9 $ 1.5 $ 6.0 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 5.5 $ 0.1 $ (0.4 ) $ 5.2 (a) Amounts in “Other’’ column primarily represent cash deposits in bank accounts with financial institutions or with third parties. Level 1 and Level 2 amounts primarily represent investments in money market funds. (b) Amounts represent publicly traded equity securities and equity-based mutual funds. (c) Amounts in “Other’’ column primarily represent counterparty netting of risk management and hedging contracts and associated cash collateral under the accounting guidance for “Derivatives and Hedging.’’ (d) The March 31, 2016 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(5) million in 2016 and $(5) million in periods 2017-2019; Level 2 matures $3 million in 2016, $9 million in periods 2017-2019, $3 million in periods 2020-2021 and $1 million in periods 2022-2032; Level 3 matures $17 million in 2016, $37 million in periods 2017-2019, $21 million in periods 2020-2021 and $69 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. (e) Amounts in “Other’’ column primarily represent accrued interest receivables from financial institutions. Level 1 amounts primarily represent investments in money market funds. (f) The December 31, 2015 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(9) million in 2016 and $(4) million in periods 2017-2019; Level 2 matures $2 million in 2016, $18 million in periods 2017-2019 and $4 million in periods 2020-2021; Level 3 matures $28 million in 2016, $29 million in periods 2017-2019, $19 million in periods 2020-2021 and $76 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. (g) Substantially comprised of power contracts for APCo, I&M and OPCo and coal contracts for PSO and SWEPCo. There were no transfers between Level 1 and Level 2 during the three months ended March 31, 2016 and 2015 . The following tables set forth a reconciliation of changes in the fair value of net trading derivatives classified as Level 3 in the fair value hierarchy: Three Months Ended March 31, 2016 AEP APCo (a) I&M (a) OPCo PSO SWEPCo (in millions) Balance as of December 31, 2015 $ 146.9 $ 11.7 $ 4.3 $ 15.9 $ 0.6 $ 0.8 Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (b) (c) 23.5 15.3 2.5 (0.6 ) (0.8 ) 4.6 Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (b) 21.9 — — — — — Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income 1.3 — — — — — Purchases, Issuances and Settlements (d) (42.7 ) (27.7 ) (4.6 ) 1.4 0.5 (4.9 ) Transfers out of Level 3 (f) (g) 10.9 0.1 0.1 — — — Changes in Fair Value Allocated to Regulated Jurisdictions (h) (20.5 ) 3.2 1.4 (27.6 ) 0.3 0.2 Balance as of March 31, 2016 $ 141.3 $ 2.6 $ 3.7 $ (10.9 ) $ 0.6 $ 0.7 Three Months Ended March 31, 2015 AEP APCo I&M OPCo PSO SWEPCo (in millions) Balance as of December 31, 2014 $ 150.8 $ 15.8 $ 14.7 $ 48.4 $ (0.3 ) $ (0.5 ) Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (b) (c) 8.6 2.2 0.1 0.2 (0.3 ) 5.8 Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (b) 5.2 — — — — — Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income (1.9 ) — — — — — Purchases, Issuances and Settlements (d) (38.5 ) (13.4 ) (9.0 ) (6.8 ) 0.6 (5.3 ) Transfers into Level 3 (e) (f) 15.3 — — — — — Transfers out of Level 3 (f) (g) (12.4 ) — — — — — Changes in Fair Value Allocated to Regulated Jurisdictions (h) 3.5 1.4 (0.2 ) 4.1 (0.7 ) (1.2 ) Balance as of March 31, 2015 $ 130.6 $ 6.0 $ 5.6 $ 45.9 $ (0.7 ) $ (1.2 ) (a) Includes both affiliated and nonaffiliated transactions. (b) Included in revenues on the condensed statements of income. (c) Represents the change in fair value between the beginning of the reporting period and the settlement of the risk management commodity contract. (d) Represents the settlement of risk management commodity contracts for the reporting period. (e) Represents existing assets or liabilities that were previously categorized as Level 2. (f) Transfers are recognized based on their value at the beginning of the reporting period that the transfer occurred. (g) Represents existing assets or liabilities that were previously categorized as Level 3. (h) Relates to the net gains (losses) of those contracts that are not reflected on the condensed statements of income. These net gains (losses) are recorded as regulatory liabilities/assets. The following tables quantify the significant unobservable inputs used in developing the fair value of Level 3 positions as of March 31, 2016 and December 31, 2015 : Significant Unobservable Inputs March 31, 2016 AEP Significant Input/Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input Low High Average (in millions) Energy Contracts $ 207.6 $ 59.5 Discounted Cash Flow Forward Market Price (a) $ 8.77 $ 162.36 $ 45.45 Counterparty Credit Risk (b) 251 669 NA FTRs 2.3 9.1 Discounted Cash Flow Forward Market Price (a) $ (17.72 ) $ 10.50 $ 0.60 Total $ 209.9 $ 68.6 Significant Unobservable Inputs December 31, 2015 AEP Significant Input/Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input Low High Average (in millions) Energy Contracts $ 212.3 $ 70.3 Discounted Cash Flow Forward Market Price (a) $ 9.69 $ 165.36 $ 36.35 Counterparty Credit Risk (b) 670 FTRs 8.4 3.5 Discounted Cash Flow Forward Market Price (a) $ (6.99 ) $ 10.34 $ 1.10 Total $ 220.7 $ 73.8 Significant Unobservable Inputs March 31, 2016 APCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 8.2 $ 0.1 Discounted Cash Flow Forward Market Price $ 8.77 $ 47.05 $ 29.14 FTRs — 5.5 Discounted Cash Flow Forward Market Price 0.42 5.58 1.90 Total $ 8.2 $ 5.6 Significant Unobservable Inputs December 31, 2015 APCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 7.9 $ 0.2 Discounted Cash Flow Forward Market Price $ 12.61 $ 47.24 $ 32.38 FTRs 4.3 0.3 Discounted Cash Flow Forward Market Price (6.96 ) 8.43 1.34 Total $ 12.2 $ 0.5 Significant Unobservable Inputs March 31, 2016 I&M Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 5.5 $ 0.1 Discounted Cash Flow Forward Market Price $ 8.77 $ 47.05 $ 29.14 FTRs — 1.7 Discounted Cash Flow Forward Market Price (0.07 ) 5.58 0.42 Total $ 5.5 $ 1.8 Significant Unobservable Inputs December 31, 2015 I&M Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 6.0 $ 0.2 Discounted Cash Flow Forward Market Price $ 12.61 $ 47.24 $ 32.38 FTRs 0.3 1.8 Discounted Cash Flow Forward Market Price (6.96 ) 8.43 1.34 Total $ 6.3 $ 2.0 Significant Unobservable Inputs March 31, 2016 OPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input Low High Average (in millions) Energy Contracts $ — $ 10.9 Discounted Cash Flow Forward Market Price (a) $ 36.41 $ 162.36 $ 84.24 Counterparty Credit Risk (b) 251 Total $ — $ 10.9 Significant Unobservable Inputs December 31, 2015 OPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 16.0 $ 0.1 Discounted Cash Flow Forward Market Price $ 41.61 $ 165.36 $ 86.84 Significant Unobservable Inputs March 31, 2016 PSO Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.7 $ 0.1 Discounted Cash Flow Forward Market Price $ (17.72 ) $ 1.80 $ (0.59 ) Significant Unobservable Inputs December 31, 2015 PSO Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.7 $ 0.1 Discounted Cash Flow Forward Market Price $ (6.96 ) $ 8.43 $ 1.34 Significant Unobservable Inputs March 31, 2016 SWEPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.8 $ 0.1 Discounted Cash Flow Forward Market Price $ (17.72 ) $ 1.80 $ (0.59 ) Significant Unobservable Inputs December 31, 2015 SWEPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.9 $ 0.1 Discounted Cash Flow Forward Market Price $ (6.96 ) $ 8.43 $ 1.34 (a) Represents market prices in dollars per MWh. (b) Represents average price of credit default swaps used to calculate counterparty credit risk, reported in basis points. NA Not applicable. The following table provides sensitivity of fair value measurements to increases (decreases) in significant unobservable inputs related to Energy Contracts and FTRs for the Registrants as of March 31, 2016 and December 31, 2015 : Sensitivity of Fair Value Measurements Significant Unobservable Input Position Change in Input Impact on Fair Value Measurement Forward Market Price Buy Increase (Decrease) Higher (Lower) Forward Market Price Sell Increase (Decrease) Lower (Higher) Counterparty Credit Risk Loss Increase (Decrease) Higher (Lower) Counterparty Credit Risk Gain Increase (Decrease) Lower (Higher) |
Ohio Power Co [Member] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The disclosures in this note apply to all Registrants unless indicated otherwise. Fair Value Hierarchy and Valuation Techniques The accounting guidance for “Fair Value Measurements and Disclosures” establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2. When quoted market prices are not available, pricing may be completed using comparable securities, dealer values, operating data and general market conditions to determine fair value. Valuation models utilize various inputs such as commodity, interest rate and, to a lesser degree, volatility and credit that include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, market corroborated inputs (i.e. inputs derived principally from, or correlated to, observable market data) and other observable inputs for the asset or liability. The amount of risk taken is determined by the Commercial Operations, Energy Supply and Finance groups in accordance with established risk management policies as approved by the Finance Committee of AEP’s Board of Directors. AEPSC’s market risk oversight staff independently monitors risk policies, procedures and risk levels and provides members of the Commercial Operations Risk Committee (Regulated Risk Committee) and the Energy Supply Risk Committee (Competitive Risk Committee) various reports regarding compliance with policies, limits and procedures. The Regulated Risk Committee consists of AEPSC’s Chief Operating Officer, Chief Financial Officer, Executive Vice President of Generation, Senior Vice President of Commercial Operations and Chief Risk Officer. The Competitive Risk Committee consists of AEPSC’s Chief Operating Officer, Chief Financial Officer and Chief Risk Officer in addition to Energy Supply’s President and Vice President. For commercial activities, exchange traded derivatives, namely futures contracts, are generally fair valued based on unadjusted quoted prices in active markets and are classified as Level 1. Level 2 inputs primarily consist of OTC broker quotes in moderately active or less active markets, as well as exchange traded contracts where there is insufficient market liquidity to warrant inclusion in Level 1. Management verifies price curves using these broker quotes and classifies these fair values within Level 2 when substantially all of the fair value can be corroborated. Management typically obtains multiple broker quotes, which are nonbinding in nature but are based on recent trades in the marketplace. When multiple broker quotes are obtained, the quoted bid and ask prices are averaged. In certain circumstances, a broker quote may be discarded if it is a clear outlier. Management uses a historical correlation analysis between the broker quoted location and the illiquid locations. If the points are highly correlated, these locations are included within Level 2 as well. Certain OTC and bilaterally executed derivative instruments are executed in less active markets with a lower availability of pricing information. Illiquid transactions, complex structured transactions, FTRs and counterparty credit risk may require nonmarket based inputs. Some of these inputs may be internally developed or extrapolated and utilized to estimate fair value. When such inputs have a significant impact on the measurement of fair value, the instrument is categorized as Level 3. The main driver of contracts being classified as Level 3 is the inability to substantiate energy price curves in the market. A portion of the Level 3 instruments have been economically hedged which limits potential earnings volatility. AEP utilizes its trustee’s external pricing service to estimate the fair value of the underlying investments held in the nuclear trusts. AEP’s investment managers review and validate the prices utilized by the trustee to determine fair value. AEP’s management performs its own valuation testing to verify the fair values of the securities. AEP receives audit reports of the trustee’s operating controls and valuation processes. The trustee uses multiple pricing vendors for the assets held in the trusts. Assets in the nuclear trusts, Cash and Cash Equivalents, Other Temporary Investments and Restricted Cash for Securitized Funding are classified using the following methods. Equities are classified as Level 1 holdings if they are actively traded on exchanges. Items classified as Level 1 are investments in money market funds, fixed income and equity mutual funds and domestic equity securities. They are valued based on observable inputs, primarily unadjusted quoted prices in active markets for identical assets. Items classified as Level 2 are primarily investments in individual fixed income securities and cash equivalent funds. Fixed income securities generally do not trade on exchanges and do not have an official closing price but their valuation inputs are based on observable market data. Pricing vendors calculate bond valuations using financial models and matrices. The models use observable inputs including yields on benchmark securities, quotes by securities brokers, rating agency actions, discounts or premiums on securities compared to par prices, changes in yields for U.S. Treasury securities, corporate actions by bond issuers, prepayment schedules and histories, economic events and, for certain securities, adjustments to yields to reflect changes in the rate of inflation. Other securities with model-derived valuation inputs that are observable are also classified as Level 2 investments. Investments with unobservable valuation inputs are classified as Level 3 investments. Fair Value Measurements of Long-term Debt The fair values of Long-term Debt are based on quoted market prices, without credit enhancements, for the same or similar issues and the current interest rates offered for instruments with similar maturities classified as Level 2 measurement inputs. These instruments are not marked-to-market. The estimates presented are not necessarily indicative of the amounts that could be realized in a current market exchange. The book values and fair values of Long-term Debt for the Registrants as of March 31, 2016 and December 31, 2015 are summarized in the following table: March 31, 2016 December 31, 2015 Company Book Value Fair Value Book Value Fair Value (in millions) AEP $ 19,782.6 $ 22,052.8 $ 19,572.7 $ 21,201.3 APCo 3,919.3 4,597.8 3,930.7 4,416.7 I&M 2,366.6 2,595.4 2,000.0 2,193.6 OPCo 2,135.5 2,515.4 2,157.7 2,472.7 PSO 1,286.3 1,463.6 1,286.1 1,402.9 SWEPCo 2,272.4 2,483.4 2,273.5 2,417.2 Fair Value Measurements of Other Temporary Investments (Applies to AEP) Other Temporary Investments include funds held by trustees primarily for the payment of securitization bonds and securities available for sale, including marketable securities that management intends to hold for less than one year and investments by its protected cell of EIS. The following is a summary of Other Temporary Investments: March 31, 2016 Other Temporary Investments Cost Gross Gains Gross Losses Fair Value (in millions) Restricted Cash (a) $ 147.4 $ — $ — $ 147.4 Fixed Income Securities – Mutual Funds 91.4 0.1 — 91.5 Equity Securities – Mutual Funds 13.9 11.7 — 25.6 Total Other Temporary Investments $ 252.7 $ 11.8 $ — $ 264.5 December 31, 2015 Other Temporary Investments Cost Gross Gains Gross Losses Fair Value (in millions) Restricted Cash (a) $ 271.0 $ — $ — $ 271.0 Fixed Income Securities – Mutual Funds 91.1 — (0.7 ) 90.4 Equity Securities – Mutual Funds 13.7 11.7 — 25.4 Total Other Temporary Investments $ 375.8 $ 11.7 $ (0.7 ) $ 386.8 (a) Primarily represents amounts held for the repayment of debt. The following table provides the activity for fixed income and equity securities within Other Temporary Investments for the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 2015 (in millions) Proceeds from Investment Sales $ — $ — Purchases of Investments 0.4 0.4 Gross Realized Gains on Investment Sales — — Gross Realized Losses on Investment Sales — — As of March 31, 2016 and December 31, 2015 , AEP had no Other Temporary Investments with an unrealized loss position. As of March 31, 2016 , fixed income securities were primarily debt based mutual funds with short and intermediate maturities. Mutual funds may be sold and do not contain maturity dates. For details of the reasons for changes in Securities Available for Sale included in Accumulated Other Comprehensive Income (Loss) for the three months ended March 31, 2016 and 2015 , see Note 3 . Fair Value Measurements of Trust Assets for Decommissioning and SNF Disposal (Applies to AEP and I&M) Nuclear decommissioning and spent nuclear fuel trust funds represent funds that regulatory commissions allow I&M to collect through rates to fund future decommissioning and spent nuclear fuel disposal liabilities. By rules or orders, the IURC, the MPSC and the FERC established investment limitations and general risk management guidelines. In general, limitations include: • Acceptable investments (rated investment grade or above when purchased). • Maximum percentage invested in a specific type of investment. • Prohibition of investment in obligations of AEP, I&M or their affiliates. • Withdrawals permitted only for payment of decommissioning costs and trust expenses. I&M maintains trust records for each regulatory jurisdiction. Regulatory approval is required to withdraw decommissioning funds. These funds are managed by external investment managers who must comply with the guidelines and rules of the applicable regulatory authorities. The trust assets are invested to optimize the net of tax earnings of the trust giving consideration to liquidity, risk, diversification and other prudent investment objectives. I&M records securities held in these trust funds in Spent Nuclear Fuel and Decommissioning Trusts on its balance sheets. I&M records these securities at fair value. I&M classifies securities in the trust funds as available-for-sale due to their long-term purpose. Other-than-temporary impairments for investments in both debt and equity securities are considered realized losses as a result of securities being managed by an external investment management firm. The external investment management firm makes specific investment decisions regarding the debt and equity investments held in these trusts and generally intends to sell debt securities in an unrealized loss position as part of a tax optimization strategy. Impairments reduce the cost basis of the securities which will affect any future unrealized gain or realized gain or loss due to the adjusted cost of investment. I&M records unrealized gains and other-than-temporary impairments from securities in these trust funds as adjustments to the regulatory liability account for the nuclear decommissioning trust funds and to regulatory assets or liabilities for the SNF disposal trust funds in accordance with their treatment in rates. Consequently, changes in fair value of trust assets do not affect earnings or AOCI. The following is a summary of nuclear trust fund investments as of March 31, 2016 and December 31, 2015 : March 31, 2016 December 31, 2015 Fair Value Gross Unrealized Gains Other-Than-Temporary Impairments Fair Value Gross Unrealized Gains Other-Than-Temporary Impairments (in millions) Cash and Cash Equivalents $ 142.0 $ — $ — $ 168.3 $ — $ — Fixed Income Securities: United States Government 761.1 52.3 (2.1 ) 731.1 35.9 (2.6 ) Corporate Debt 68.9 4.9 (1.0 ) 57.9 3.2 (1.1 ) State and Local Government 29.0 1.2 (0.3 ) 22.2 1.1 (0.3 ) Subtotal Fixed Income Securities 859.0 58.4 (3.4 ) 811.2 40.2 (4.0 ) Equity Securities - Domestic 1,151.4 583.5 (78.9 ) 1,126.9 571.6 (79.3 ) Spent Nuclear Fuel and Decommissioning Trusts $ 2,152.4 $ 641.9 $ (82.3 ) $ 2,106.4 $ 611.8 $ (83.3 ) The following table provides the securities activity within the decommissioning and SNF trusts for the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 2015 (in millions) Proceeds from Investment Sales $ 1,137.7 $ 228.2 Purchases of Investments 1,151.6 245.8 Gross Realized Gains on Investment Sales 15.8 11.2 Gross Realized Losses on Investment Sales 7.8 3.8 The adjusted cost of fixed income securities was $801 million and $771 million as of March 31, 2016 and December 31, 2015 , respectively. The adjusted cost of equity securities was $568 million and $555 million as of March 31, 2016 and December 31, 2015 , respectively. The fair value of fixed income securities held in the nuclear trust funds, summarized by contractual maturities, as of March 31, 2016 was as follows: Fair Value of Fixed Income Securities (in millions) Within 1 year $ 175.4 1 year – 5 years 369.6 5 years – 10 years 133.0 After 10 years 181.0 Total $ 859.0 Fair Value Measurements of Financial Assets and Liabilities The following tables set forth, by level within the fair value hierarchy, the Registrants’ financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2016 and December 31, 2015 . As required by the accounting guidance for “Fair Value Measurements and Disclosures,” financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Management’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. There have not been any significant changes in management’s valuation techniques. AEP Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 9.6 $ 4.4 $ — $ 176.4 $ 190.4 Other Temporary Investments Restricted Cash (a) 129.2 7.6 — 10.6 147.4 Fixed Income Securities – Mutual Funds 91.5 — — — 91.5 Equity Securities – Mutual Funds (b) 25.6 — — — 25.6 Total Other Temporary Investments 246.3 7.6 — 10.6 264.5 Risk Management Assets Risk Management Commodity Contracts (c) (d) 10.7 585.5 201.8 (346.0 ) 452.0 Cash Flow Hedges: Commodity Hedges (c) — 11.4 8.1 0.3 19.8 Fair Value Hedges — 0.5 — 0.4 0.9 Total Risk Management Assets 10.7 597.4 209.9 (345.3 ) 472.7 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 135.3 — — 6.7 142.0 Fixed Income Securities: United States Government — 761.1 — — 761.1 Corporate Debt — 68.9 — — 68.9 State and Local Government — 29.0 — — 29.0 Subtotal Fixed Income Securities — 859.0 — — 859.0 Equity Securities – Domestic (b) 1,151.4 — — — 1,151.4 Total Spent Nuclear Fuel and Decommissioning Trusts 1,286.7 859.0 — 6.7 2,152.4 Total Assets $ 1,553.3 $ 1,468.4 $ 209.9 $ (151.6 ) $ 3,080.0 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (d) $ 20.5 $ 569.2 $ 58.5 $ (377.2 ) $ 271.0 Cash Flow Hedges: Commodity Hedges (c) — 29.7 10.1 0.3 40.1 Interest Rate/Foreign Currency Hedges — 0.4 — — 0.4 Fair Value Hedges — — — 0.4 0.4 Total Risk Management Liabilities $ 20.5 $ 599.3 $ 68.6 $ (376.5 ) $ 311.9 AEP Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 3.9 $ 4.3 $ — $ 168.2 $ 176.4 Other Temporary Investments Restricted Cash (a) 230.0 7.7 — 33.3 271.0 Fixed Income Securities – Mutual Funds 90.4 — — — 90.4 Equity Securities – Mutual Funds (b) 25.4 — — — 25.4 Total Other Temporary Investments 345.8 7.7 — 33.3 386.8 Risk Management Assets Risk Management Commodity Contracts (c) (f) 11.5 495.0 219.7 (287.7 ) 438.5 Cash Flow Hedges: Commodity Hedges (c) — 15.9 1.0 0.7 17.6 Fair Value Hedges — — — 0.1 0.1 Total Risk Management Assets 11.5 510.9 220.7 (286.9 ) 456.2 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 160.5 — — 7.8 168.3 Fixed Income Securities: United States Government — 731.1 — — 731.1 Corporate Debt — 57.9 — — 57.9 State and Local Government — 22.2 — — 22.2 Subtotal Fixed Income Securities — 811.2 — — 811.2 Equity Securities – Domestic (b) 1,126.9 — — — 1,126.9 Total Spent Nuclear Fuel and Decommissioning Trusts 1,287.4 811.2 — 7.8 2,106.4 Total Assets $ 1,648.6 $ 1,334.1 $ 220.7 $ (77.6 ) $ 3,125.8 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (f) $ 24.1 $ 471.5 $ 67.3 $ (326.3 ) $ 236.6 Cash Flow Hedges: Commodity Hedges (c) — 18.9 6.5 0.7 26.1 Interest Rate/Foreign Currency Hedges — 0.4 — — 0.4 Fair Value Hedges — 3.0 — 0.1 3.1 Total Risk Management Liabilities $ 24.1 $ 493.8 $ 73.8 $ (325.5 ) $ 266.2 APCo Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ 7.5 $ — $ — $ 0.1 $ 7.6 Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) 0.2 16.2 8.2 (12.4 ) 12.2 Total Assets: $ 7.7 $ 16.2 $ 8.2 $ (12.3 ) $ 19.8 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.2 $ 17.7 $ 5.6 $ (13.0 ) $ 10.5 APCo Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ 14.8 $ — $ — $ 0.1 $ 14.9 Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) 0.2 13.9 12.2 (10.6 ) 15.7 Total Assets: $ 15.0 $ 13.9 $ 12.2 $ (10.5 ) $ 30.6 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.2 $ 17.8 $ 0.5 $ (13.6 ) $ 4.9 I&M Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 12.5 $ 5.5 $ (8.6 ) $ 9.5 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 135.3 — — 6.7 142.0 Fixed Income Securities: United States Government — 761.1 — — 761.1 Corporate Debt — 68.9 — — 68.9 State and Local Government — 29.0 — — 29.0 Subtotal Fixed Income Securities — 859.0 — — 859.0 Equity Securities - Domestic (b) 1,151.4 — — — 1,151.4 Total Spent Nuclear Fuel and Decommissioning Trusts 1,286.7 859.0 — 6.7 2,152.4 Total Assets $ 1,286.8 $ 871.5 $ 5.5 $ (1.9 ) $ 2,161.9 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 14.2 $ 1.8 $ (8.7 ) $ 7.4 I&M Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 17.0 $ 6.3 $ (11.1 ) $ 12.3 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 160.5 — — 7.8 168.3 Fixed Income Securities: United States Government — 731.1 — — 731.1 Corporate Debt — 57.9 — — 57.9 State and Local Government — 22.2 — — 22.2 Subtotal Fixed Income Securities — 811.2 — — 811.2 Equity Securities - Domestic (b) 1,126.9 — — — 1,126.9 Total Spent Nuclear Fuel and Decommissioning Trusts 1,287.4 811.2 — 7.8 2,106.4 Total Assets $ 1,287.5 $ 828.2 $ 6.3 $ (3.3 ) $ 2,118.7 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 17.5 $ 2.0 $ (11.7 ) $ 7.9 OPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ 16.2 $ — $ — $ — $ 16.2 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.6 $ 10.9 $ (0.2 ) $ 11.3 OPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ — $ — $ — $ 27.7 $ 27.7 Risk Management Assets Risk Management Commodity Contracts (c) (g) — — 16.0 3.2 19.2 Total Assets $ — $ — $ 16.0 $ 30.9 $ 46.9 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.8 $ 0.1 $ 2.7 $ 3.6 PSO Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets Risk Management Commodity Contracts (c) (g) $ — $ 0.1 $ 0.7 $ (0.1 ) $ 0.7 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.3 $ 0.1 $ (0.2 ) $ 0.2 PSO Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets Risk Management Commodity Contracts (c) (g) $ — $ — $ 0.7 $ (0.1 ) $ 0.6 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.5 $ 0.1 $ (0.4 ) $ 0.2 SWEPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 9.4 $ — $ — $ 2.9 $ 12.3 Risk Management Assets Risk Management Commodity Contracts (c) (g) — 0.1 0.8 (0.1 ) 0.8 Total Assets $ 9.4 $ 0.1 $ 0.8 $ 2.8 $ 13.1 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 5.5 $ 0.1 $ (0.3 ) $ 5.3 SWEPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 3.6 $ — $ — $ 1.6 $ 5.2 Risk Management Assets Risk Management Commodity Contracts (c) (g) — — 0.9 (0.1 ) 0.8 Total Assets $ 3.6 $ — $ 0.9 $ 1.5 $ 6.0 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 5.5 $ 0.1 $ (0.4 ) $ 5.2 (a) Amounts in “Other’’ column primarily represent cash deposits in bank accounts with financial institutions or with third parties. Level 1 and Level 2 amounts primarily represent investments in money market funds. (b) Amounts represent publicly traded equity securities and equity-based mutual funds. (c) Amounts in “Other’’ column primarily represent counterparty netting of risk management and hedging contracts and associated cash collateral under the accounting guidance for “Derivatives and Hedging.’’ (d) The March 31, 2016 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(5) million in 2016 and $(5) million in periods 2017-2019; Level 2 matures $3 million in 2016, $9 million in periods 2017-2019, $3 million in periods 2020-2021 and $1 million in periods 2022-2032; Level 3 matures $17 million in 2016, $37 million in periods 2017-2019, $21 million in periods 2020-2021 and $69 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. (e) Amounts in “Other’’ column primarily represent accrued interest receivables from financial institutions. Level 1 amounts primarily represent investments in money market funds. (f) The December 31, 2015 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(9) million in 2016 and $(4) million in periods 2017-2019; Level 2 matures $2 million in 2016, $18 million in periods 2017-2019 and $4 million in periods 2020-2021; Level 3 matures $28 million in 2016, $29 million in periods 2017-2019, $19 million in periods 2020-2021 and $76 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. (g) Substantially comprised of power contracts for APCo, I&M and OPCo and coal contracts for PSO and SWEPCo. There were no transfers between Level 1 and Level 2 during the three months ended March 31, 2016 and 2015 . The following tables set forth a reconciliation of changes in the fair value of net trading derivatives classified as Level 3 in the fair value hierarchy: Three Months Ended March 31, 2016 AEP APCo (a) I&M (a) OPCo PSO SWEPCo (in millions) Balance as of December 31, 2015 $ 146.9 $ 11.7 $ 4.3 $ 15.9 $ 0.6 $ 0.8 Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (b) (c) 23.5 15.3 2.5 (0.6 ) (0.8 ) 4.6 Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (b) 21.9 — — — — — Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income 1.3 — — — — — Purchases, Issuances and Settlements (d) (42.7 ) (27.7 ) (4.6 ) 1.4 0.5 (4.9 ) Transfers out of Level 3 (f) (g) 10.9 0.1 0.1 — — — Changes in Fair Value Allocated to Regulated Jurisdictions (h) (20.5 ) 3.2 1.4 (27.6 ) 0.3 0.2 Balance as of March 31, 2016 $ 141.3 $ 2.6 $ 3.7 $ (10.9 ) $ 0.6 $ 0.7 Three Months Ended March 31, 2015 AEP APCo I&M OPCo PSO SWEPCo (in millions) Balance as of December 31, 2014 $ 150.8 $ 15.8 $ 14.7 $ 48.4 $ (0.3 ) $ (0.5 ) Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (b) (c) 8.6 2.2 0.1 0.2 (0.3 ) 5.8 Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (b) 5.2 — — — — — Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income (1.9 ) — — — — — Purchases, Issuances and Settlements (d) (38.5 ) (13.4 ) (9.0 ) (6.8 ) 0.6 (5.3 ) Transfers into Level 3 (e) (f) 15.3 — — — — — Transfers out of Level 3 (f) (g) (12.4 ) — — — — — Changes in Fair Value Allocated to Regulated Jurisdictions (h) 3.5 1.4 (0.2 ) 4.1 (0.7 ) (1.2 ) Balance as of March 31, 2015 $ 130.6 $ 6.0 $ 5.6 $ 45.9 $ (0.7 ) $ (1.2 ) (a) Includes both affiliated and nonaffiliated transactions. (b) Included in revenues on the condensed statements of income. (c) Represents the change in fair value between the beginning of the reporting period and the settlement of the risk management commodity contract. (d) Represents the settlement of risk management commodity contracts for the reporting period. (e) Represents existing assets or liabilities that were previously categorized as Level 2. (f) Transfers are recognized based on their value at the beginning of the reporting period that the transfer occurred. (g) Represents existing assets or liabilities that were previously categorized as Level 3. (h) Relates to the net gains (losses) of those contracts that are not reflected on the condensed statements of income. These net gains (losses) are recorded as regulatory liabilities/assets. The following tables quantify the significant unobservable inputs used in developing the fair value of Level 3 positions as of March 31, 2016 and December 31, 2015 : Significant Unobservable Inputs March 31, 2016 AEP Significant Input/Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input Low High Average (in millions) Energy Contracts $ 207.6 $ 59.5 Discounted Cash Flow Forward Market Price (a) $ 8.77 $ 162.36 $ 45.45 Counterparty Credit Risk (b) 251 669 NA FTRs 2.3 9.1 Discounted Cash Flow Forward Market Price (a) $ (17.72 ) $ 10.50 $ 0.60 Total $ 209.9 $ 68.6 Significant Unobservable Inputs December 31, 2015 AEP Significant Input/Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input Low High Average (in millions) Energy Contracts $ 212.3 $ 70.3 Discounted Cash Flow Forward Market Price (a) $ 9.69 $ 165.36 $ 36.35 Counterparty Credit Risk (b) 670 FTRs 8.4 3.5 Discounted Cash Flow Forward Market Price (a) $ (6.99 ) $ 10.34 $ 1.10 Total $ 220.7 $ 73.8 Significant Unobservable Inputs March 31, 2016 APCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 8.2 $ 0.1 Discounted Cash Flow Forward Market Price $ 8.77 $ 47.05 $ 29.14 FTRs — 5.5 Discounted Cash Flow Forward Market Price 0.42 5.58 1.90 Total $ 8.2 $ 5.6 Significant Unobservable Inputs December 31, 2015 APCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 7.9 $ 0.2 Discounted Cash Flow Forward Market Price $ 12.61 $ 47.24 $ 32.38 FTRs 4.3 0.3 Discounted Cash Flow Forward Market Price (6.96 ) 8.43 1.34 Total $ 12.2 $ 0.5 Significant Unobservable Inputs March 31, 2016 I&M Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 5.5 $ 0.1 Discounted Cash Flow Forward Market Price $ 8.77 $ 47.05 $ 29.14 FTRs — 1.7 Discounted Cash Flow Forward Market Price (0.07 ) 5.58 0.42 Total $ 5.5 $ 1.8 Significant Unobservable Inputs December 31, 2015 I&M Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 6.0 $ 0.2 Discounted Cash Flow Forward Market Price $ 12.61 $ 47.24 $ 32.38 FTRs 0.3 1.8 Discounted Cash Flow Forward Market Price (6.96 ) 8.43 1.34 Total $ 6.3 $ 2.0 Significant Unobservable Inputs March 31, 2016 OPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input Low High Average (in millions) Energy Contracts $ — $ 10.9 Discounted Cash Flow Forward Market Price (a) $ 36.41 $ 162.36 $ 84.24 Counterparty Credit Risk (b) 251 Total $ — $ 10.9 Significant Unobservable Inputs December 31, 2015 OPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 16.0 $ 0.1 Discounted Cash Flow Forward Market Price $ 41.61 $ 165.36 $ 86.84 Significant Unobservable Inputs March 31, 2016 PSO Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.7 $ 0.1 Discounted Cash Flow Forward Market Price $ (17.72 ) $ 1.80 $ (0.59 ) Significant Unobservable Inputs December 31, 2015 PSO Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.7 $ 0.1 Discounted Cash Flow Forward Market Price $ (6.96 ) $ 8.43 $ 1.34 Significant Unobservable Inputs March 31, 2016 SWEPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.8 $ 0.1 Discounted Cash Flow Forward Market Price $ (17.72 ) $ 1.80 $ (0.59 ) Significant Unobservable Inputs December 31, 2015 SWEPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.9 $ 0.1 Discounted Cash Flow Forward Market Price $ (6.96 ) $ 8.43 $ 1.34 (a) Represents market prices in dollars per MWh. (b) Represents average price of credit default swaps used to calculate counterparty credit risk, reported in basis points. NA Not applicable. The following table provides sensitivity of fair value measurements to increases (decreases) in significant unobservable inputs related to Energy Contracts and FTRs for the Registrants as of March 31, 2016 and December 31, 2015 : Sensitivity of Fair Value Measurements Significant Unobservable Input Position Change in Input Impact on Fair Value Measurement Forward Market Price Buy Increase (Decrease) Higher (Lower) Forward Market Price Sell Increase (Decrease) Lower (Higher) Counterparty Credit Risk Loss Increase (Decrease) Higher (Lower) Counterparty Credit Risk Gain Increase (Decrease) Lower (Higher) |
Public Service Co Of Oklahoma [Member] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The disclosures in this note apply to all Registrants unless indicated otherwise. Fair Value Hierarchy and Valuation Techniques The accounting guidance for “Fair Value Measurements and Disclosures” establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2. When quoted market prices are not available, pricing may be completed using comparable securities, dealer values, operating data and general market conditions to determine fair value. Valuation models utilize various inputs such as commodity, interest rate and, to a lesser degree, volatility and credit that include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, market corroborated inputs (i.e. inputs derived principally from, or correlated to, observable market data) and other observable inputs for the asset or liability. The amount of risk taken is determined by the Commercial Operations, Energy Supply and Finance groups in accordance with established risk management policies as approved by the Finance Committee of AEP’s Board of Directors. AEPSC’s market risk oversight staff independently monitors risk policies, procedures and risk levels and provides members of the Commercial Operations Risk Committee (Regulated Risk Committee) and the Energy Supply Risk Committee (Competitive Risk Committee) various reports regarding compliance with policies, limits and procedures. The Regulated Risk Committee consists of AEPSC’s Chief Operating Officer, Chief Financial Officer, Executive Vice President of Generation, Senior Vice President of Commercial Operations and Chief Risk Officer. The Competitive Risk Committee consists of AEPSC’s Chief Operating Officer, Chief Financial Officer and Chief Risk Officer in addition to Energy Supply’s President and Vice President. For commercial activities, exchange traded derivatives, namely futures contracts, are generally fair valued based on unadjusted quoted prices in active markets and are classified as Level 1. Level 2 inputs primarily consist of OTC broker quotes in moderately active or less active markets, as well as exchange traded contracts where there is insufficient market liquidity to warrant inclusion in Level 1. Management verifies price curves using these broker quotes and classifies these fair values within Level 2 when substantially all of the fair value can be corroborated. Management typically obtains multiple broker quotes, which are nonbinding in nature but are based on recent trades in the marketplace. When multiple broker quotes are obtained, the quoted bid and ask prices are averaged. In certain circumstances, a broker quote may be discarded if it is a clear outlier. Management uses a historical correlation analysis between the broker quoted location and the illiquid locations. If the points are highly correlated, these locations are included within Level 2 as well. Certain OTC and bilaterally executed derivative instruments are executed in less active markets with a lower availability of pricing information. Illiquid transactions, complex structured transactions, FTRs and counterparty credit risk may require nonmarket based inputs. Some of these inputs may be internally developed or extrapolated and utilized to estimate fair value. When such inputs have a significant impact on the measurement of fair value, the instrument is categorized as Level 3. The main driver of contracts being classified as Level 3 is the inability to substantiate energy price curves in the market. A portion of the Level 3 instruments have been economically hedged which limits potential earnings volatility. AEP utilizes its trustee’s external pricing service to estimate the fair value of the underlying investments held in the nuclear trusts. AEP’s investment managers review and validate the prices utilized by the trustee to determine fair value. AEP’s management performs its own valuation testing to verify the fair values of the securities. AEP receives audit reports of the trustee’s operating controls and valuation processes. The trustee uses multiple pricing vendors for the assets held in the trusts. Assets in the nuclear trusts, Cash and Cash Equivalents, Other Temporary Investments and Restricted Cash for Securitized Funding are classified using the following methods. Equities are classified as Level 1 holdings if they are actively traded on exchanges. Items classified as Level 1 are investments in money market funds, fixed income and equity mutual funds and domestic equity securities. They are valued based on observable inputs, primarily unadjusted quoted prices in active markets for identical assets. Items classified as Level 2 are primarily investments in individual fixed income securities and cash equivalent funds. Fixed income securities generally do not trade on exchanges and do not have an official closing price but their valuation inputs are based on observable market data. Pricing vendors calculate bond valuations using financial models and matrices. The models use observable inputs including yields on benchmark securities, quotes by securities brokers, rating agency actions, discounts or premiums on securities compared to par prices, changes in yields for U.S. Treasury securities, corporate actions by bond issuers, prepayment schedules and histories, economic events and, for certain securities, adjustments to yields to reflect changes in the rate of inflation. Other securities with model-derived valuation inputs that are observable are also classified as Level 2 investments. Investments with unobservable valuation inputs are classified as Level 3 investments. Fair Value Measurements of Long-term Debt The fair values of Long-term Debt are based on quoted market prices, without credit enhancements, for the same or similar issues and the current interest rates offered for instruments with similar maturities classified as Level 2 measurement inputs. These instruments are not marked-to-market. The estimates presented are not necessarily indicative of the amounts that could be realized in a current market exchange. The book values and fair values of Long-term Debt for the Registrants as of March 31, 2016 and December 31, 2015 are summarized in the following table: March 31, 2016 December 31, 2015 Company Book Value Fair Value Book Value Fair Value (in millions) AEP $ 19,782.6 $ 22,052.8 $ 19,572.7 $ 21,201.3 APCo 3,919.3 4,597.8 3,930.7 4,416.7 I&M 2,366.6 2,595.4 2,000.0 2,193.6 OPCo 2,135.5 2,515.4 2,157.7 2,472.7 PSO 1,286.3 1,463.6 1,286.1 1,402.9 SWEPCo 2,272.4 2,483.4 2,273.5 2,417.2 Fair Value Measurements of Other Temporary Investments (Applies to AEP) Other Temporary Investments include funds held by trustees primarily for the payment of securitization bonds and securities available for sale, including marketable securities that management intends to hold for less than one year and investments by its protected cell of EIS. The following is a summary of Other Temporary Investments: March 31, 2016 Other Temporary Investments Cost Gross Gains Gross Losses Fair Value (in millions) Restricted Cash (a) $ 147.4 $ — $ — $ 147.4 Fixed Income Securities – Mutual Funds 91.4 0.1 — 91.5 Equity Securities – Mutual Funds 13.9 11.7 — 25.6 Total Other Temporary Investments $ 252.7 $ 11.8 $ — $ 264.5 December 31, 2015 Other Temporary Investments Cost Gross Gains Gross Losses Fair Value (in millions) Restricted Cash (a) $ 271.0 $ — $ — $ 271.0 Fixed Income Securities – Mutual Funds 91.1 — (0.7 ) 90.4 Equity Securities – Mutual Funds 13.7 11.7 — 25.4 Total Other Temporary Investments $ 375.8 $ 11.7 $ (0.7 ) $ 386.8 (a) Primarily represents amounts held for the repayment of debt. The following table provides the activity for fixed income and equity securities within Other Temporary Investments for the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 2015 (in millions) Proceeds from Investment Sales $ — $ — Purchases of Investments 0.4 0.4 Gross Realized Gains on Investment Sales — — Gross Realized Losses on Investment Sales — — As of March 31, 2016 and December 31, 2015 , AEP had no Other Temporary Investments with an unrealized loss position. As of March 31, 2016 , fixed income securities were primarily debt based mutual funds with short and intermediate maturities. Mutual funds may be sold and do not contain maturity dates. For details of the reasons for changes in Securities Available for Sale included in Accumulated Other Comprehensive Income (Loss) for the three months ended March 31, 2016 and 2015 , see Note 3 . Fair Value Measurements of Trust Assets for Decommissioning and SNF Disposal (Applies to AEP and I&M) Nuclear decommissioning and spent nuclear fuel trust funds represent funds that regulatory commissions allow I&M to collect through rates to fund future decommissioning and spent nuclear fuel disposal liabilities. By rules or orders, the IURC, the MPSC and the FERC established investment limitations and general risk management guidelines. In general, limitations include: • Acceptable investments (rated investment grade or above when purchased). • Maximum percentage invested in a specific type of investment. • Prohibition of investment in obligations of AEP, I&M or their affiliates. • Withdrawals permitted only for payment of decommissioning costs and trust expenses. I&M maintains trust records for each regulatory jurisdiction. Regulatory approval is required to withdraw decommissioning funds. These funds are managed by external investment managers who must comply with the guidelines and rules of the applicable regulatory authorities. The trust assets are invested to optimize the net of tax earnings of the trust giving consideration to liquidity, risk, diversification and other prudent investment objectives. I&M records securities held in these trust funds in Spent Nuclear Fuel and Decommissioning Trusts on its balance sheets. I&M records these securities at fair value. I&M classifies securities in the trust funds as available-for-sale due to their long-term purpose. Other-than-temporary impairments for investments in both debt and equity securities are considered realized losses as a result of securities being managed by an external investment management firm. The external investment management firm makes specific investment decisions regarding the debt and equity investments held in these trusts and generally intends to sell debt securities in an unrealized loss position as part of a tax optimization strategy. Impairments reduce the cost basis of the securities which will affect any future unrealized gain or realized gain or loss due to the adjusted cost of investment. I&M records unrealized gains and other-than-temporary impairments from securities in these trust funds as adjustments to the regulatory liability account for the nuclear decommissioning trust funds and to regulatory assets or liabilities for the SNF disposal trust funds in accordance with their treatment in rates. Consequently, changes in fair value of trust assets do not affect earnings or AOCI. The following is a summary of nuclear trust fund investments as of March 31, 2016 and December 31, 2015 : March 31, 2016 December 31, 2015 Fair Value Gross Unrealized Gains Other-Than-Temporary Impairments Fair Value Gross Unrealized Gains Other-Than-Temporary Impairments (in millions) Cash and Cash Equivalents $ 142.0 $ — $ — $ 168.3 $ — $ — Fixed Income Securities: United States Government 761.1 52.3 (2.1 ) 731.1 35.9 (2.6 ) Corporate Debt 68.9 4.9 (1.0 ) 57.9 3.2 (1.1 ) State and Local Government 29.0 1.2 (0.3 ) 22.2 1.1 (0.3 ) Subtotal Fixed Income Securities 859.0 58.4 (3.4 ) 811.2 40.2 (4.0 ) Equity Securities - Domestic 1,151.4 583.5 (78.9 ) 1,126.9 571.6 (79.3 ) Spent Nuclear Fuel and Decommissioning Trusts $ 2,152.4 $ 641.9 $ (82.3 ) $ 2,106.4 $ 611.8 $ (83.3 ) The following table provides the securities activity within the decommissioning and SNF trusts for the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 2015 (in millions) Proceeds from Investment Sales $ 1,137.7 $ 228.2 Purchases of Investments 1,151.6 245.8 Gross Realized Gains on Investment Sales 15.8 11.2 Gross Realized Losses on Investment Sales 7.8 3.8 The adjusted cost of fixed income securities was $801 million and $771 million as of March 31, 2016 and December 31, 2015 , respectively. The adjusted cost of equity securities was $568 million and $555 million as of March 31, 2016 and December 31, 2015 , respectively. The fair value of fixed income securities held in the nuclear trust funds, summarized by contractual maturities, as of March 31, 2016 was as follows: Fair Value of Fixed Income Securities (in millions) Within 1 year $ 175.4 1 year – 5 years 369.6 5 years – 10 years 133.0 After 10 years 181.0 Total $ 859.0 Fair Value Measurements of Financial Assets and Liabilities The following tables set forth, by level within the fair value hierarchy, the Registrants’ financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2016 and December 31, 2015 . As required by the accounting guidance for “Fair Value Measurements and Disclosures,” financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Management’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. There have not been any significant changes in management’s valuation techniques. AEP Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 9.6 $ 4.4 $ — $ 176.4 $ 190.4 Other Temporary Investments Restricted Cash (a) 129.2 7.6 — 10.6 147.4 Fixed Income Securities – Mutual Funds 91.5 — — — 91.5 Equity Securities – Mutual Funds (b) 25.6 — — — 25.6 Total Other Temporary Investments 246.3 7.6 — 10.6 264.5 Risk Management Assets Risk Management Commodity Contracts (c) (d) 10.7 585.5 201.8 (346.0 ) 452.0 Cash Flow Hedges: Commodity Hedges (c) — 11.4 8.1 0.3 19.8 Fair Value Hedges — 0.5 — 0.4 0.9 Total Risk Management Assets 10.7 597.4 209.9 (345.3 ) 472.7 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 135.3 — — 6.7 142.0 Fixed Income Securities: United States Government — 761.1 — — 761.1 Corporate Debt — 68.9 — — 68.9 State and Local Government — 29.0 — — 29.0 Subtotal Fixed Income Securities — 859.0 — — 859.0 Equity Securities – Domestic (b) 1,151.4 — — — 1,151.4 Total Spent Nuclear Fuel and Decommissioning Trusts 1,286.7 859.0 — 6.7 2,152.4 Total Assets $ 1,553.3 $ 1,468.4 $ 209.9 $ (151.6 ) $ 3,080.0 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (d) $ 20.5 $ 569.2 $ 58.5 $ (377.2 ) $ 271.0 Cash Flow Hedges: Commodity Hedges (c) — 29.7 10.1 0.3 40.1 Interest Rate/Foreign Currency Hedges — 0.4 — — 0.4 Fair Value Hedges — — — 0.4 0.4 Total Risk Management Liabilities $ 20.5 $ 599.3 $ 68.6 $ (376.5 ) $ 311.9 AEP Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 3.9 $ 4.3 $ — $ 168.2 $ 176.4 Other Temporary Investments Restricted Cash (a) 230.0 7.7 — 33.3 271.0 Fixed Income Securities – Mutual Funds 90.4 — — — 90.4 Equity Securities – Mutual Funds (b) 25.4 — — — 25.4 Total Other Temporary Investments 345.8 7.7 — 33.3 386.8 Risk Management Assets Risk Management Commodity Contracts (c) (f) 11.5 495.0 219.7 (287.7 ) 438.5 Cash Flow Hedges: Commodity Hedges (c) — 15.9 1.0 0.7 17.6 Fair Value Hedges — — — 0.1 0.1 Total Risk Management Assets 11.5 510.9 220.7 (286.9 ) 456.2 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 160.5 — — 7.8 168.3 Fixed Income Securities: United States Government — 731.1 — — 731.1 Corporate Debt — 57.9 — — 57.9 State and Local Government — 22.2 — — 22.2 Subtotal Fixed Income Securities — 811.2 — — 811.2 Equity Securities – Domestic (b) 1,126.9 — — — 1,126.9 Total Spent Nuclear Fuel and Decommissioning Trusts 1,287.4 811.2 — 7.8 2,106.4 Total Assets $ 1,648.6 $ 1,334.1 $ 220.7 $ (77.6 ) $ 3,125.8 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (f) $ 24.1 $ 471.5 $ 67.3 $ (326.3 ) $ 236.6 Cash Flow Hedges: Commodity Hedges (c) — 18.9 6.5 0.7 26.1 Interest Rate/Foreign Currency Hedges — 0.4 — — 0.4 Fair Value Hedges — 3.0 — 0.1 3.1 Total Risk Management Liabilities $ 24.1 $ 493.8 $ 73.8 $ (325.5 ) $ 266.2 APCo Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ 7.5 $ — $ — $ 0.1 $ 7.6 Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) 0.2 16.2 8.2 (12.4 ) 12.2 Total Assets: $ 7.7 $ 16.2 $ 8.2 $ (12.3 ) $ 19.8 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.2 $ 17.7 $ 5.6 $ (13.0 ) $ 10.5 APCo Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ 14.8 $ — $ — $ 0.1 $ 14.9 Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) 0.2 13.9 12.2 (10.6 ) 15.7 Total Assets: $ 15.0 $ 13.9 $ 12.2 $ (10.5 ) $ 30.6 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.2 $ 17.8 $ 0.5 $ (13.6 ) $ 4.9 I&M Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 12.5 $ 5.5 $ (8.6 ) $ 9.5 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 135.3 — — 6.7 142.0 Fixed Income Securities: United States Government — 761.1 — — 761.1 Corporate Debt — 68.9 — — 68.9 State and Local Government — 29.0 — — 29.0 Subtotal Fixed Income Securities — 859.0 — — 859.0 Equity Securities - Domestic (b) 1,151.4 — — — 1,151.4 Total Spent Nuclear Fuel and Decommissioning Trusts 1,286.7 859.0 — 6.7 2,152.4 Total Assets $ 1,286.8 $ 871.5 $ 5.5 $ (1.9 ) $ 2,161.9 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 14.2 $ 1.8 $ (8.7 ) $ 7.4 I&M Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 17.0 $ 6.3 $ (11.1 ) $ 12.3 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 160.5 — — 7.8 168.3 Fixed Income Securities: United States Government — 731.1 — — 731.1 Corporate Debt — 57.9 — — 57.9 State and Local Government — 22.2 — — 22.2 Subtotal Fixed Income Securities — 811.2 — — 811.2 Equity Securities - Domestic (b) 1,126.9 — — — 1,126.9 Total Spent Nuclear Fuel and Decommissioning Trusts 1,287.4 811.2 — 7.8 2,106.4 Total Assets $ 1,287.5 $ 828.2 $ 6.3 $ (3.3 ) $ 2,118.7 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 17.5 $ 2.0 $ (11.7 ) $ 7.9 OPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ 16.2 $ — $ — $ — $ 16.2 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.6 $ 10.9 $ (0.2 ) $ 11.3 OPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ — $ — $ — $ 27.7 $ 27.7 Risk Management Assets Risk Management Commodity Contracts (c) (g) — — 16.0 3.2 19.2 Total Assets $ — $ — $ 16.0 $ 30.9 $ 46.9 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.8 $ 0.1 $ 2.7 $ 3.6 PSO Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets Risk Management Commodity Contracts (c) (g) $ — $ 0.1 $ 0.7 $ (0.1 ) $ 0.7 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.3 $ 0.1 $ (0.2 ) $ 0.2 PSO Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets Risk Management Commodity Contracts (c) (g) $ — $ — $ 0.7 $ (0.1 ) $ 0.6 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.5 $ 0.1 $ (0.4 ) $ 0.2 SWEPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 9.4 $ — $ — $ 2.9 $ 12.3 Risk Management Assets Risk Management Commodity Contracts (c) (g) — 0.1 0.8 (0.1 ) 0.8 Total Assets $ 9.4 $ 0.1 $ 0.8 $ 2.8 $ 13.1 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 5.5 $ 0.1 $ (0.3 ) $ 5.3 SWEPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 3.6 $ — $ — $ 1.6 $ 5.2 Risk Management Assets Risk Management Commodity Contracts (c) (g) — — 0.9 (0.1 ) 0.8 Total Assets $ 3.6 $ — $ 0.9 $ 1.5 $ 6.0 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 5.5 $ 0.1 $ (0.4 ) $ 5.2 (a) Amounts in “Other’’ column primarily represent cash deposits in bank accounts with financial institutions or with third parties. Level 1 and Level 2 amounts primarily represent investments in money market funds. (b) Amounts represent publicly traded equity securities and equity-based mutual funds. (c) Amounts in “Other’’ column primarily represent counterparty netting of risk management and hedging contracts and associated cash collateral under the accounting guidance for “Derivatives and Hedging.’’ (d) The March 31, 2016 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(5) million in 2016 and $(5) million in periods 2017-2019; Level 2 matures $3 million in 2016, $9 million in periods 2017-2019, $3 million in periods 2020-2021 and $1 million in periods 2022-2032; Level 3 matures $17 million in 2016, $37 million in periods 2017-2019, $21 million in periods 2020-2021 and $69 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. (e) Amounts in “Other’’ column primarily represent accrued interest receivables from financial institutions. Level 1 amounts primarily represent investments in money market funds. (f) The December 31, 2015 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(9) million in 2016 and $(4) million in periods 2017-2019; Level 2 matures $2 million in 2016, $18 million in periods 2017-2019 and $4 million in periods 2020-2021; Level 3 matures $28 million in 2016, $29 million in periods 2017-2019, $19 million in periods 2020-2021 and $76 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. (g) Substantially comprised of power contracts for APCo, I&M and OPCo and coal contracts for PSO and SWEPCo. There were no transfers between Level 1 and Level 2 during the three months ended March 31, 2016 and 2015 . The following tables set forth a reconciliation of changes in the fair value of net trading derivatives classified as Level 3 in the fair value hierarchy: Three Months Ended March 31, 2016 AEP APCo (a) I&M (a) OPCo PSO SWEPCo (in millions) Balance as of December 31, 2015 $ 146.9 $ 11.7 $ 4.3 $ 15.9 $ 0.6 $ 0.8 Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (b) (c) 23.5 15.3 2.5 (0.6 ) (0.8 ) 4.6 Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (b) 21.9 — — — — — Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income 1.3 — — — — — Purchases, Issuances and Settlements (d) (42.7 ) (27.7 ) (4.6 ) 1.4 0.5 (4.9 ) Transfers out of Level 3 (f) (g) 10.9 0.1 0.1 — — — Changes in Fair Value Allocated to Regulated Jurisdictions (h) (20.5 ) 3.2 1.4 (27.6 ) 0.3 0.2 Balance as of March 31, 2016 $ 141.3 $ 2.6 $ 3.7 $ (10.9 ) $ 0.6 $ 0.7 Three Months Ended March 31, 2015 AEP APCo I&M OPCo PSO SWEPCo (in millions) Balance as of December 31, 2014 $ 150.8 $ 15.8 $ 14.7 $ 48.4 $ (0.3 ) $ (0.5 ) Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (b) (c) 8.6 2.2 0.1 0.2 (0.3 ) 5.8 Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (b) 5.2 — — — — — Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income (1.9 ) — — — — — Purchases, Issuances and Settlements (d) (38.5 ) (13.4 ) (9.0 ) (6.8 ) 0.6 (5.3 ) Transfers into Level 3 (e) (f) 15.3 — — — — — Transfers out of Level 3 (f) (g) (12.4 ) — — — — — Changes in Fair Value Allocated to Regulated Jurisdictions (h) 3.5 1.4 (0.2 ) 4.1 (0.7 ) (1.2 ) Balance as of March 31, 2015 $ 130.6 $ 6.0 $ 5.6 $ 45.9 $ (0.7 ) $ (1.2 ) (a) Includes both affiliated and nonaffiliated transactions. (b) Included in revenues on the condensed statements of income. (c) Represents the change in fair value between the beginning of the reporting period and the settlement of the risk management commodity contract. (d) Represents the settlement of risk management commodity contracts for the reporting period. (e) Represents existing assets or liabilities that were previously categorized as Level 2. (f) Transfers are recognized based on their value at the beginning of the reporting period that the transfer occurred. (g) Represents existing assets or liabilities that were previously categorized as Level 3. (h) Relates to the net gains (losses) of those contracts that are not reflected on the condensed statements of income. These net gains (losses) are recorded as regulatory liabilities/assets. The following tables quantify the significant unobservable inputs used in developing the fair value of Level 3 positions as of March 31, 2016 and December 31, 2015 : Significant Unobservable Inputs March 31, 2016 AEP Significant Input/Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input Low High Average (in millions) Energy Contracts $ 207.6 $ 59.5 Discounted Cash Flow Forward Market Price (a) $ 8.77 $ 162.36 $ 45.45 Counterparty Credit Risk (b) 251 669 NA FTRs 2.3 9.1 Discounted Cash Flow Forward Market Price (a) $ (17.72 ) $ 10.50 $ 0.60 Total $ 209.9 $ 68.6 Significant Unobservable Inputs December 31, 2015 AEP Significant Input/Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input Low High Average (in millions) Energy Contracts $ 212.3 $ 70.3 Discounted Cash Flow Forward Market Price (a) $ 9.69 $ 165.36 $ 36.35 Counterparty Credit Risk (b) 670 FTRs 8.4 3.5 Discounted Cash Flow Forward Market Price (a) $ (6.99 ) $ 10.34 $ 1.10 Total $ 220.7 $ 73.8 Significant Unobservable Inputs March 31, 2016 APCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 8.2 $ 0.1 Discounted Cash Flow Forward Market Price $ 8.77 $ 47.05 $ 29.14 FTRs — 5.5 Discounted Cash Flow Forward Market Price 0.42 5.58 1.90 Total $ 8.2 $ 5.6 Significant Unobservable Inputs December 31, 2015 APCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 7.9 $ 0.2 Discounted Cash Flow Forward Market Price $ 12.61 $ 47.24 $ 32.38 FTRs 4.3 0.3 Discounted Cash Flow Forward Market Price (6.96 ) 8.43 1.34 Total $ 12.2 $ 0.5 Significant Unobservable Inputs March 31, 2016 I&M Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 5.5 $ 0.1 Discounted Cash Flow Forward Market Price $ 8.77 $ 47.05 $ 29.14 FTRs — 1.7 Discounted Cash Flow Forward Market Price (0.07 ) 5.58 0.42 Total $ 5.5 $ 1.8 Significant Unobservable Inputs December 31, 2015 I&M Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 6.0 $ 0.2 Discounted Cash Flow Forward Market Price $ 12.61 $ 47.24 $ 32.38 FTRs 0.3 1.8 Discounted Cash Flow Forward Market Price (6.96 ) 8.43 1.34 Total $ 6.3 $ 2.0 Significant Unobservable Inputs March 31, 2016 OPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input Low High Average (in millions) Energy Contracts $ — $ 10.9 Discounted Cash Flow Forward Market Price (a) $ 36.41 $ 162.36 $ 84.24 Counterparty Credit Risk (b) 251 Total $ — $ 10.9 Significant Unobservable Inputs December 31, 2015 OPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 16.0 $ 0.1 Discounted Cash Flow Forward Market Price $ 41.61 $ 165.36 $ 86.84 Significant Unobservable Inputs March 31, 2016 PSO Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.7 $ 0.1 Discounted Cash Flow Forward Market Price $ (17.72 ) $ 1.80 $ (0.59 ) Significant Unobservable Inputs December 31, 2015 PSO Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.7 $ 0.1 Discounted Cash Flow Forward Market Price $ (6.96 ) $ 8.43 $ 1.34 Significant Unobservable Inputs March 31, 2016 SWEPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.8 $ 0.1 Discounted Cash Flow Forward Market Price $ (17.72 ) $ 1.80 $ (0.59 ) Significant Unobservable Inputs December 31, 2015 SWEPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.9 $ 0.1 Discounted Cash Flow Forward Market Price $ (6.96 ) $ 8.43 $ 1.34 (a) Represents market prices in dollars per MWh. (b) Represents average price of credit default swaps used to calculate counterparty credit risk, reported in basis points. NA Not applicable. The following table provides sensitivity of fair value measurements to increases (decreases) in significant unobservable inputs related to Energy Contracts and FTRs for the Registrants as of March 31, 2016 and December 31, 2015 : Sensitivity of Fair Value Measurements Significant Unobservable Input Position Change in Input Impact on Fair Value Measurement Forward Market Price Buy Increase (Decrease) Higher (Lower) Forward Market Price Sell Increase (Decrease) Lower (Higher) Counterparty Credit Risk Loss Increase (Decrease) Higher (Lower) Counterparty Credit Risk Gain Increase (Decrease) Lower (Higher) |
Southwestern Electric Power Co [Member] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The disclosures in this note apply to all Registrants unless indicated otherwise. Fair Value Hierarchy and Valuation Techniques The accounting guidance for “Fair Value Measurements and Disclosures” establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2. When quoted market prices are not available, pricing may be completed using comparable securities, dealer values, operating data and general market conditions to determine fair value. Valuation models utilize various inputs such as commodity, interest rate and, to a lesser degree, volatility and credit that include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, market corroborated inputs (i.e. inputs derived principally from, or correlated to, observable market data) and other observable inputs for the asset or liability. The amount of risk taken is determined by the Commercial Operations, Energy Supply and Finance groups in accordance with established risk management policies as approved by the Finance Committee of AEP’s Board of Directors. AEPSC’s market risk oversight staff independently monitors risk policies, procedures and risk levels and provides members of the Commercial Operations Risk Committee (Regulated Risk Committee) and the Energy Supply Risk Committee (Competitive Risk Committee) various reports regarding compliance with policies, limits and procedures. The Regulated Risk Committee consists of AEPSC’s Chief Operating Officer, Chief Financial Officer, Executive Vice President of Generation, Senior Vice President of Commercial Operations and Chief Risk Officer. The Competitive Risk Committee consists of AEPSC’s Chief Operating Officer, Chief Financial Officer and Chief Risk Officer in addition to Energy Supply’s President and Vice President. For commercial activities, exchange traded derivatives, namely futures contracts, are generally fair valued based on unadjusted quoted prices in active markets and are classified as Level 1. Level 2 inputs primarily consist of OTC broker quotes in moderately active or less active markets, as well as exchange traded contracts where there is insufficient market liquidity to warrant inclusion in Level 1. Management verifies price curves using these broker quotes and classifies these fair values within Level 2 when substantially all of the fair value can be corroborated. Management typically obtains multiple broker quotes, which are nonbinding in nature but are based on recent trades in the marketplace. When multiple broker quotes are obtained, the quoted bid and ask prices are averaged. In certain circumstances, a broker quote may be discarded if it is a clear outlier. Management uses a historical correlation analysis between the broker quoted location and the illiquid locations. If the points are highly correlated, these locations are included within Level 2 as well. Certain OTC and bilaterally executed derivative instruments are executed in less active markets with a lower availability of pricing information. Illiquid transactions, complex structured transactions, FTRs and counterparty credit risk may require nonmarket based inputs. Some of these inputs may be internally developed or extrapolated and utilized to estimate fair value. When such inputs have a significant impact on the measurement of fair value, the instrument is categorized as Level 3. The main driver of contracts being classified as Level 3 is the inability to substantiate energy price curves in the market. A portion of the Level 3 instruments have been economically hedged which limits potential earnings volatility. AEP utilizes its trustee’s external pricing service to estimate the fair value of the underlying investments held in the nuclear trusts. AEP’s investment managers review and validate the prices utilized by the trustee to determine fair value. AEP’s management performs its own valuation testing to verify the fair values of the securities. AEP receives audit reports of the trustee’s operating controls and valuation processes. The trustee uses multiple pricing vendors for the assets held in the trusts. Assets in the nuclear trusts, Cash and Cash Equivalents, Other Temporary Investments and Restricted Cash for Securitized Funding are classified using the following methods. Equities are classified as Level 1 holdings if they are actively traded on exchanges. Items classified as Level 1 are investments in money market funds, fixed income and equity mutual funds and domestic equity securities. They are valued based on observable inputs, primarily unadjusted quoted prices in active markets for identical assets. Items classified as Level 2 are primarily investments in individual fixed income securities and cash equivalent funds. Fixed income securities generally do not trade on exchanges and do not have an official closing price but their valuation inputs are based on observable market data. Pricing vendors calculate bond valuations using financial models and matrices. The models use observable inputs including yields on benchmark securities, quotes by securities brokers, rating agency actions, discounts or premiums on securities compared to par prices, changes in yields for U.S. Treasury securities, corporate actions by bond issuers, prepayment schedules and histories, economic events and, for certain securities, adjustments to yields to reflect changes in the rate of inflation. Other securities with model-derived valuation inputs that are observable are also classified as Level 2 investments. Investments with unobservable valuation inputs are classified as Level 3 investments. Fair Value Measurements of Long-term Debt The fair values of Long-term Debt are based on quoted market prices, without credit enhancements, for the same or similar issues and the current interest rates offered for instruments with similar maturities classified as Level 2 measurement inputs. These instruments are not marked-to-market. The estimates presented are not necessarily indicative of the amounts that could be realized in a current market exchange. The book values and fair values of Long-term Debt for the Registrants as of March 31, 2016 and December 31, 2015 are summarized in the following table: March 31, 2016 December 31, 2015 Company Book Value Fair Value Book Value Fair Value (in millions) AEP $ 19,782.6 $ 22,052.8 $ 19,572.7 $ 21,201.3 APCo 3,919.3 4,597.8 3,930.7 4,416.7 I&M 2,366.6 2,595.4 2,000.0 2,193.6 OPCo 2,135.5 2,515.4 2,157.7 2,472.7 PSO 1,286.3 1,463.6 1,286.1 1,402.9 SWEPCo 2,272.4 2,483.4 2,273.5 2,417.2 Fair Value Measurements of Other Temporary Investments (Applies to AEP) Other Temporary Investments include funds held by trustees primarily for the payment of securitization bonds and securities available for sale, including marketable securities that management intends to hold for less than one year and investments by its protected cell of EIS. The following is a summary of Other Temporary Investments: March 31, 2016 Other Temporary Investments Cost Gross Gains Gross Losses Fair Value (in millions) Restricted Cash (a) $ 147.4 $ — $ — $ 147.4 Fixed Income Securities – Mutual Funds 91.4 0.1 — 91.5 Equity Securities – Mutual Funds 13.9 11.7 — 25.6 Total Other Temporary Investments $ 252.7 $ 11.8 $ — $ 264.5 December 31, 2015 Other Temporary Investments Cost Gross Gains Gross Losses Fair Value (in millions) Restricted Cash (a) $ 271.0 $ — $ — $ 271.0 Fixed Income Securities – Mutual Funds 91.1 — (0.7 ) 90.4 Equity Securities – Mutual Funds 13.7 11.7 — 25.4 Total Other Temporary Investments $ 375.8 $ 11.7 $ (0.7 ) $ 386.8 (a) Primarily represents amounts held for the repayment of debt. The following table provides the activity for fixed income and equity securities within Other Temporary Investments for the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 2015 (in millions) Proceeds from Investment Sales $ — $ — Purchases of Investments 0.4 0.4 Gross Realized Gains on Investment Sales — — Gross Realized Losses on Investment Sales — — As of March 31, 2016 and December 31, 2015 , AEP had no Other Temporary Investments with an unrealized loss position. As of March 31, 2016 , fixed income securities were primarily debt based mutual funds with short and intermediate maturities. Mutual funds may be sold and do not contain maturity dates. For details of the reasons for changes in Securities Available for Sale included in Accumulated Other Comprehensive Income (Loss) for the three months ended March 31, 2016 and 2015 , see Note 3 . Fair Value Measurements of Trust Assets for Decommissioning and SNF Disposal (Applies to AEP and I&M) Nuclear decommissioning and spent nuclear fuel trust funds represent funds that regulatory commissions allow I&M to collect through rates to fund future decommissioning and spent nuclear fuel disposal liabilities. By rules or orders, the IURC, the MPSC and the FERC established investment limitations and general risk management guidelines. In general, limitations include: • Acceptable investments (rated investment grade or above when purchased). • Maximum percentage invested in a specific type of investment. • Prohibition of investment in obligations of AEP, I&M or their affiliates. • Withdrawals permitted only for payment of decommissioning costs and trust expenses. I&M maintains trust records for each regulatory jurisdiction. Regulatory approval is required to withdraw decommissioning funds. These funds are managed by external investment managers who must comply with the guidelines and rules of the applicable regulatory authorities. The trust assets are invested to optimize the net of tax earnings of the trust giving consideration to liquidity, risk, diversification and other prudent investment objectives. I&M records securities held in these trust funds in Spent Nuclear Fuel and Decommissioning Trusts on its balance sheets. I&M records these securities at fair value. I&M classifies securities in the trust funds as available-for-sale due to their long-term purpose. Other-than-temporary impairments for investments in both debt and equity securities are considered realized losses as a result of securities being managed by an external investment management firm. The external investment management firm makes specific investment decisions regarding the debt and equity investments held in these trusts and generally intends to sell debt securities in an unrealized loss position as part of a tax optimization strategy. Impairments reduce the cost basis of the securities which will affect any future unrealized gain or realized gain or loss due to the adjusted cost of investment. I&M records unrealized gains and other-than-temporary impairments from securities in these trust funds as adjustments to the regulatory liability account for the nuclear decommissioning trust funds and to regulatory assets or liabilities for the SNF disposal trust funds in accordance with their treatment in rates. Consequently, changes in fair value of trust assets do not affect earnings or AOCI. The following is a summary of nuclear trust fund investments as of March 31, 2016 and December 31, 2015 : March 31, 2016 December 31, 2015 Fair Value Gross Unrealized Gains Other-Than-Temporary Impairments Fair Value Gross Unrealized Gains Other-Than-Temporary Impairments (in millions) Cash and Cash Equivalents $ 142.0 $ — $ — $ 168.3 $ — $ — Fixed Income Securities: United States Government 761.1 52.3 (2.1 ) 731.1 35.9 (2.6 ) Corporate Debt 68.9 4.9 (1.0 ) 57.9 3.2 (1.1 ) State and Local Government 29.0 1.2 (0.3 ) 22.2 1.1 (0.3 ) Subtotal Fixed Income Securities 859.0 58.4 (3.4 ) 811.2 40.2 (4.0 ) Equity Securities - Domestic 1,151.4 583.5 (78.9 ) 1,126.9 571.6 (79.3 ) Spent Nuclear Fuel and Decommissioning Trusts $ 2,152.4 $ 641.9 $ (82.3 ) $ 2,106.4 $ 611.8 $ (83.3 ) The following table provides the securities activity within the decommissioning and SNF trusts for the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 2015 (in millions) Proceeds from Investment Sales $ 1,137.7 $ 228.2 Purchases of Investments 1,151.6 245.8 Gross Realized Gains on Investment Sales 15.8 11.2 Gross Realized Losses on Investment Sales 7.8 3.8 The adjusted cost of fixed income securities was $801 million and $771 million as of March 31, 2016 and December 31, 2015 , respectively. The adjusted cost of equity securities was $568 million and $555 million as of March 31, 2016 and December 31, 2015 , respectively. The fair value of fixed income securities held in the nuclear trust funds, summarized by contractual maturities, as of March 31, 2016 was as follows: Fair Value of Fixed Income Securities (in millions) Within 1 year $ 175.4 1 year – 5 years 369.6 5 years – 10 years 133.0 After 10 years 181.0 Total $ 859.0 Fair Value Measurements of Financial Assets and Liabilities The following tables set forth, by level within the fair value hierarchy, the Registrants’ financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2016 and December 31, 2015 . As required by the accounting guidance for “Fair Value Measurements and Disclosures,” financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Management’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. There have not been any significant changes in management’s valuation techniques. AEP Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 9.6 $ 4.4 $ — $ 176.4 $ 190.4 Other Temporary Investments Restricted Cash (a) 129.2 7.6 — 10.6 147.4 Fixed Income Securities – Mutual Funds 91.5 — — — 91.5 Equity Securities – Mutual Funds (b) 25.6 — — — 25.6 Total Other Temporary Investments 246.3 7.6 — 10.6 264.5 Risk Management Assets Risk Management Commodity Contracts (c) (d) 10.7 585.5 201.8 (346.0 ) 452.0 Cash Flow Hedges: Commodity Hedges (c) — 11.4 8.1 0.3 19.8 Fair Value Hedges — 0.5 — 0.4 0.9 Total Risk Management Assets 10.7 597.4 209.9 (345.3 ) 472.7 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 135.3 — — 6.7 142.0 Fixed Income Securities: United States Government — 761.1 — — 761.1 Corporate Debt — 68.9 — — 68.9 State and Local Government — 29.0 — — 29.0 Subtotal Fixed Income Securities — 859.0 — — 859.0 Equity Securities – Domestic (b) 1,151.4 — — — 1,151.4 Total Spent Nuclear Fuel and Decommissioning Trusts 1,286.7 859.0 — 6.7 2,152.4 Total Assets $ 1,553.3 $ 1,468.4 $ 209.9 $ (151.6 ) $ 3,080.0 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (d) $ 20.5 $ 569.2 $ 58.5 $ (377.2 ) $ 271.0 Cash Flow Hedges: Commodity Hedges (c) — 29.7 10.1 0.3 40.1 Interest Rate/Foreign Currency Hedges — 0.4 — — 0.4 Fair Value Hedges — — — 0.4 0.4 Total Risk Management Liabilities $ 20.5 $ 599.3 $ 68.6 $ (376.5 ) $ 311.9 AEP Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 3.9 $ 4.3 $ — $ 168.2 $ 176.4 Other Temporary Investments Restricted Cash (a) 230.0 7.7 — 33.3 271.0 Fixed Income Securities – Mutual Funds 90.4 — — — 90.4 Equity Securities – Mutual Funds (b) 25.4 — — — 25.4 Total Other Temporary Investments 345.8 7.7 — 33.3 386.8 Risk Management Assets Risk Management Commodity Contracts (c) (f) 11.5 495.0 219.7 (287.7 ) 438.5 Cash Flow Hedges: Commodity Hedges (c) — 15.9 1.0 0.7 17.6 Fair Value Hedges — — — 0.1 0.1 Total Risk Management Assets 11.5 510.9 220.7 (286.9 ) 456.2 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 160.5 — — 7.8 168.3 Fixed Income Securities: United States Government — 731.1 — — 731.1 Corporate Debt — 57.9 — — 57.9 State and Local Government — 22.2 — — 22.2 Subtotal Fixed Income Securities — 811.2 — — 811.2 Equity Securities – Domestic (b) 1,126.9 — — — 1,126.9 Total Spent Nuclear Fuel and Decommissioning Trusts 1,287.4 811.2 — 7.8 2,106.4 Total Assets $ 1,648.6 $ 1,334.1 $ 220.7 $ (77.6 ) $ 3,125.8 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (f) $ 24.1 $ 471.5 $ 67.3 $ (326.3 ) $ 236.6 Cash Flow Hedges: Commodity Hedges (c) — 18.9 6.5 0.7 26.1 Interest Rate/Foreign Currency Hedges — 0.4 — — 0.4 Fair Value Hedges — 3.0 — 0.1 3.1 Total Risk Management Liabilities $ 24.1 $ 493.8 $ 73.8 $ (325.5 ) $ 266.2 APCo Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ 7.5 $ — $ — $ 0.1 $ 7.6 Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) 0.2 16.2 8.2 (12.4 ) 12.2 Total Assets: $ 7.7 $ 16.2 $ 8.2 $ (12.3 ) $ 19.8 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.2 $ 17.7 $ 5.6 $ (13.0 ) $ 10.5 APCo Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ 14.8 $ — $ — $ 0.1 $ 14.9 Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) 0.2 13.9 12.2 (10.6 ) 15.7 Total Assets: $ 15.0 $ 13.9 $ 12.2 $ (10.5 ) $ 30.6 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.2 $ 17.8 $ 0.5 $ (13.6 ) $ 4.9 I&M Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 12.5 $ 5.5 $ (8.6 ) $ 9.5 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 135.3 — — 6.7 142.0 Fixed Income Securities: United States Government — 761.1 — — 761.1 Corporate Debt — 68.9 — — 68.9 State and Local Government — 29.0 — — 29.0 Subtotal Fixed Income Securities — 859.0 — — 859.0 Equity Securities - Domestic (b) 1,151.4 — — — 1,151.4 Total Spent Nuclear Fuel and Decommissioning Trusts 1,286.7 859.0 — 6.7 2,152.4 Total Assets $ 1,286.8 $ 871.5 $ 5.5 $ (1.9 ) $ 2,161.9 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 14.2 $ 1.8 $ (8.7 ) $ 7.4 I&M Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 17.0 $ 6.3 $ (11.1 ) $ 12.3 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 160.5 — — 7.8 168.3 Fixed Income Securities: United States Government — 731.1 — — 731.1 Corporate Debt — 57.9 — — 57.9 State and Local Government — 22.2 — — 22.2 Subtotal Fixed Income Securities — 811.2 — — 811.2 Equity Securities - Domestic (b) 1,126.9 — — — 1,126.9 Total Spent Nuclear Fuel and Decommissioning Trusts 1,287.4 811.2 — 7.8 2,106.4 Total Assets $ 1,287.5 $ 828.2 $ 6.3 $ (3.3 ) $ 2,118.7 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 17.5 $ 2.0 $ (11.7 ) $ 7.9 OPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ 16.2 $ — $ — $ — $ 16.2 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.6 $ 10.9 $ (0.2 ) $ 11.3 OPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ — $ — $ — $ 27.7 $ 27.7 Risk Management Assets Risk Management Commodity Contracts (c) (g) — — 16.0 3.2 19.2 Total Assets $ — $ — $ 16.0 $ 30.9 $ 46.9 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.8 $ 0.1 $ 2.7 $ 3.6 PSO Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets Risk Management Commodity Contracts (c) (g) $ — $ 0.1 $ 0.7 $ (0.1 ) $ 0.7 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.3 $ 0.1 $ (0.2 ) $ 0.2 PSO Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets Risk Management Commodity Contracts (c) (g) $ — $ — $ 0.7 $ (0.1 ) $ 0.6 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.5 $ 0.1 $ (0.4 ) $ 0.2 SWEPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 9.4 $ — $ — $ 2.9 $ 12.3 Risk Management Assets Risk Management Commodity Contracts (c) (g) — 0.1 0.8 (0.1 ) 0.8 Total Assets $ 9.4 $ 0.1 $ 0.8 $ 2.8 $ 13.1 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 5.5 $ 0.1 $ (0.3 ) $ 5.3 SWEPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 3.6 $ — $ — $ 1.6 $ 5.2 Risk Management Assets Risk Management Commodity Contracts (c) (g) — — 0.9 (0.1 ) 0.8 Total Assets $ 3.6 $ — $ 0.9 $ 1.5 $ 6.0 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 5.5 $ 0.1 $ (0.4 ) $ 5.2 (a) Amounts in “Other’’ column primarily represent cash deposits in bank accounts with financial institutions or with third parties. Level 1 and Level 2 amounts primarily represent investments in money market funds. (b) Amounts represent publicly traded equity securities and equity-based mutual funds. (c) Amounts in “Other’’ column primarily represent counterparty netting of risk management and hedging contracts and associated cash collateral under the accounting guidance for “Derivatives and Hedging.’’ (d) The March 31, 2016 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(5) million in 2016 and $(5) million in periods 2017-2019; Level 2 matures $3 million in 2016, $9 million in periods 2017-2019, $3 million in periods 2020-2021 and $1 million in periods 2022-2032; Level 3 matures $17 million in 2016, $37 million in periods 2017-2019, $21 million in periods 2020-2021 and $69 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. (e) Amounts in “Other’’ column primarily represent accrued interest receivables from financial institutions. Level 1 amounts primarily represent investments in money market funds. (f) The December 31, 2015 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(9) million in 2016 and $(4) million in periods 2017-2019; Level 2 matures $2 million in 2016, $18 million in periods 2017-2019 and $4 million in periods 2020-2021; Level 3 matures $28 million in 2016, $29 million in periods 2017-2019, $19 million in periods 2020-2021 and $76 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. (g) Substantially comprised of power contracts for APCo, I&M and OPCo and coal contracts for PSO and SWEPCo. There were no transfers between Level 1 and Level 2 during the three months ended March 31, 2016 and 2015 . The following tables set forth a reconciliation of changes in the fair value of net trading derivatives classified as Level 3 in the fair value hierarchy: Three Months Ended March 31, 2016 AEP APCo (a) I&M (a) OPCo PSO SWEPCo (in millions) Balance as of December 31, 2015 $ 146.9 $ 11.7 $ 4.3 $ 15.9 $ 0.6 $ 0.8 Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (b) (c) 23.5 15.3 2.5 (0.6 ) (0.8 ) 4.6 Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (b) 21.9 — — — — — Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income 1.3 — — — — — Purchases, Issuances and Settlements (d) (42.7 ) (27.7 ) (4.6 ) 1.4 0.5 (4.9 ) Transfers out of Level 3 (f) (g) 10.9 0.1 0.1 — — — Changes in Fair Value Allocated to Regulated Jurisdictions (h) (20.5 ) 3.2 1.4 (27.6 ) 0.3 0.2 Balance as of March 31, 2016 $ 141.3 $ 2.6 $ 3.7 $ (10.9 ) $ 0.6 $ 0.7 Three Months Ended March 31, 2015 AEP APCo I&M OPCo PSO SWEPCo (in millions) Balance as of December 31, 2014 $ 150.8 $ 15.8 $ 14.7 $ 48.4 $ (0.3 ) $ (0.5 ) Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (b) (c) 8.6 2.2 0.1 0.2 (0.3 ) 5.8 Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (b) 5.2 — — — — — Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income (1.9 ) — — — — — Purchases, Issuances and Settlements (d) (38.5 ) (13.4 ) (9.0 ) (6.8 ) 0.6 (5.3 ) Transfers into Level 3 (e) (f) 15.3 — — — — — Transfers out of Level 3 (f) (g) (12.4 ) — — — — — Changes in Fair Value Allocated to Regulated Jurisdictions (h) 3.5 1.4 (0.2 ) 4.1 (0.7 ) (1.2 ) Balance as of March 31, 2015 $ 130.6 $ 6.0 $ 5.6 $ 45.9 $ (0.7 ) $ (1.2 ) (a) Includes both affiliated and nonaffiliated transactions. (b) Included in revenues on the condensed statements of income. (c) Represents the change in fair value between the beginning of the reporting period and the settlement of the risk management commodity contract. (d) Represents the settlement of risk management commodity contracts for the reporting period. (e) Represents existing assets or liabilities that were previously categorized as Level 2. (f) Transfers are recognized based on their value at the beginning of the reporting period that the transfer occurred. (g) Represents existing assets or liabilities that were previously categorized as Level 3. (h) Relates to the net gains (losses) of those contracts that are not reflected on the condensed statements of income. These net gains (losses) are recorded as regulatory liabilities/assets. The following tables quantify the significant unobservable inputs used in developing the fair value of Level 3 positions as of March 31, 2016 and December 31, 2015 : Significant Unobservable Inputs March 31, 2016 AEP Significant Input/Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input Low High Average (in millions) Energy Contracts $ 207.6 $ 59.5 Discounted Cash Flow Forward Market Price (a) $ 8.77 $ 162.36 $ 45.45 Counterparty Credit Risk (b) 251 669 NA FTRs 2.3 9.1 Discounted Cash Flow Forward Market Price (a) $ (17.72 ) $ 10.50 $ 0.60 Total $ 209.9 $ 68.6 Significant Unobservable Inputs December 31, 2015 AEP Significant Input/Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input Low High Average (in millions) Energy Contracts $ 212.3 $ 70.3 Discounted Cash Flow Forward Market Price (a) $ 9.69 $ 165.36 $ 36.35 Counterparty Credit Risk (b) 670 FTRs 8.4 3.5 Discounted Cash Flow Forward Market Price (a) $ (6.99 ) $ 10.34 $ 1.10 Total $ 220.7 $ 73.8 Significant Unobservable Inputs March 31, 2016 APCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 8.2 $ 0.1 Discounted Cash Flow Forward Market Price $ 8.77 $ 47.05 $ 29.14 FTRs — 5.5 Discounted Cash Flow Forward Market Price 0.42 5.58 1.90 Total $ 8.2 $ 5.6 Significant Unobservable Inputs December 31, 2015 APCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 7.9 $ 0.2 Discounted Cash Flow Forward Market Price $ 12.61 $ 47.24 $ 32.38 FTRs 4.3 0.3 Discounted Cash Flow Forward Market Price (6.96 ) 8.43 1.34 Total $ 12.2 $ 0.5 Significant Unobservable Inputs March 31, 2016 I&M Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 5.5 $ 0.1 Discounted Cash Flow Forward Market Price $ 8.77 $ 47.05 $ 29.14 FTRs — 1.7 Discounted Cash Flow Forward Market Price (0.07 ) 5.58 0.42 Total $ 5.5 $ 1.8 Significant Unobservable Inputs December 31, 2015 I&M Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 6.0 $ 0.2 Discounted Cash Flow Forward Market Price $ 12.61 $ 47.24 $ 32.38 FTRs 0.3 1.8 Discounted Cash Flow Forward Market Price (6.96 ) 8.43 1.34 Total $ 6.3 $ 2.0 Significant Unobservable Inputs March 31, 2016 OPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input Low High Average (in millions) Energy Contracts $ — $ 10.9 Discounted Cash Flow Forward Market Price (a) $ 36.41 $ 162.36 $ 84.24 Counterparty Credit Risk (b) 251 Total $ — $ 10.9 Significant Unobservable Inputs December 31, 2015 OPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 16.0 $ 0.1 Discounted Cash Flow Forward Market Price $ 41.61 $ 165.36 $ 86.84 Significant Unobservable Inputs March 31, 2016 PSO Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.7 $ 0.1 Discounted Cash Flow Forward Market Price $ (17.72 ) $ 1.80 $ (0.59 ) Significant Unobservable Inputs December 31, 2015 PSO Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.7 $ 0.1 Discounted Cash Flow Forward Market Price $ (6.96 ) $ 8.43 $ 1.34 Significant Unobservable Inputs March 31, 2016 SWEPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.8 $ 0.1 Discounted Cash Flow Forward Market Price $ (17.72 ) $ 1.80 $ (0.59 ) Significant Unobservable Inputs December 31, 2015 SWEPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.9 $ 0.1 Discounted Cash Flow Forward Market Price $ (6.96 ) $ 8.43 $ 1.34 (a) Represents market prices in dollars per MWh. (b) Represents average price of credit default swaps used to calculate counterparty credit risk, reported in basis points. NA Not applicable. The following table provides sensitivity of fair value measurements to increases (decreases) in significant unobservable inputs related to Energy Contracts and FTRs for the Registrants as of March 31, 2016 and December 31, 2015 : Sensitivity of Fair Value Measurements Significant Unobservable Input Position Change in Input Impact on Fair Value Measurement Forward Market Price Buy Increase (Decrease) Higher (Lower) Forward Market Price Sell Increase (Decrease) Lower (Higher) Counterparty Credit Risk Loss Increase (Decrease) Higher (Lower) Counterparty Credit Risk Gain Increase (Decrease) Lower (Higher) |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
Income Taxes | INCOME TAXES The disclosures in this note apply to all Registrants unless indicated otherwise. AEP System Tax Allocation Agreement AEP and subsidiaries join in the filing of a consolidated federal income tax return. The allocation of the AEP System’s current consolidated federal income tax to the AEP System companies allocates the benefit of current tax losses to the AEP System companies giving rise to such losses in determining their current tax expense. The tax benefit of the Parent is allocated to its subsidiaries with taxable income. With the exception of the loss of the Parent, the method of allocation reflects a separate return result for each company in the consolidated group. Valuation Allowance (Applies to AEP) AEP assesses available positive and negative evidence to estimate whether sufficient future taxable income of the appropriate tax character will be generated to realize the benefits of existing deferred tax assets. When the evaluation of the evidence indicates that AEP will not be able to realize the benefits of existing deferred tax assets, a valuation allowance is recorded to reduce existing deferred tax assets to the net realizable amount. Objective negative evidence evaluated includes whether AEP has a history of recognizing income of the character which can be offset by loss carryforwards. Other objective negative evidence evaluated is the impact recently enacted federal tax legislation will have on future taxable income and on AEP’s ability to benefit from the carryforward of charitable contribution deductions. On the basis of this evaluation, AEP did not record a change in the valuation allowance in the first quarter of 2016. A valuation allowance of $130 million has been recorded against AEP’s deferred tax asset balance as of March 31, 2016. The valuation allowance reflects management’s assessment of the amount of deferred tax assets that are more likely than not to be realized. The amount of the deferred tax assets realizable; however, could be adjusted if estimates of future taxable income are materially impacted during the carryforward period. Federal and State Income Tax Audit Status AEP and subsidiaries are no longer subject to U.S. federal examination for years before 2011. The IRS examination of years 2011, 2012 and 2013 started in April 2014. AEP and subsidiaries received a Revenue Agents Report in April 2016, completing the 2011 through 2013 audit cycle indicating an agreed upon audit. Although the outcome of tax audits is uncertain, in management’s opinion, adequate provisions for federal income taxes have been made for potential liabilities resulting from such matters. In addition, the Registrants accrue interest on these uncertain tax positions. Management is not aware of any issues for open tax years that upon final resolution are expected to materially impact net income. AEP and subsidiaries file income tax returns in various state, local or foreign jurisdictions. These taxing authorities routinely examine the tax returns. AEP and subsidiaries are currently under examination in several state and local jurisdictions. However, it is possible that previously filed tax returns have positions that may be challenged by these tax authorities. Management believes that adequate provisions for income taxes have been made for potential liabilities resulting from such challenges and that the ultimate resolution of these audits will not materially impact net income. The Registrants are no longer subject to state, local or non-U.S. income tax examinations by tax authorities for years before 2009. State Tax Legislation (Applies to AEP, PSO and SWEPCo) In March 2016, the Texas Comptroller of Public Accounts issued clarifying guidance regarding the treatment of transmission and distribution expenses included in the computation of taxable income for purposes of calculating the Texas gross margins tax. The guidance clarified which specific transmission and distribution expenses are included in the computation of the cost of goods sold deduction. This guidance resulted in a net favorable adjustment to net income of $10 million , $1 million and $5 million for AEP, PSO and SWEPCo, respectively. In March 2016, Louisiana enacted several tax bills impacting income taxes, franchise taxes and sales taxes. The income tax provisions limit the use of Louisiana net operating losses and the sales tax provisions increase the sales tax rate and suspend or eliminate certain exemptions. The legislation is not expected to materially impact net income or cash flows. |
Appalachian Power Co [Member] | |
Income Taxes | INCOME TAXES The disclosures in this note apply to all Registrants unless indicated otherwise. AEP System Tax Allocation Agreement AEP and subsidiaries join in the filing of a consolidated federal income tax return. The allocation of the AEP System’s current consolidated federal income tax to the AEP System companies allocates the benefit of current tax losses to the AEP System companies giving rise to such losses in determining their current tax expense. The tax benefit of the Parent is allocated to its subsidiaries with taxable income. With the exception of the loss of the Parent, the method of allocation reflects a separate return result for each company in the consolidated group. Valuation Allowance (Applies to AEP) AEP assesses available positive and negative evidence to estimate whether sufficient future taxable income of the appropriate tax character will be generated to realize the benefits of existing deferred tax assets. When the evaluation of the evidence indicates that AEP will not be able to realize the benefits of existing deferred tax assets, a valuation allowance is recorded to reduce existing deferred tax assets to the net realizable amount. Objective negative evidence evaluated includes whether AEP has a history of recognizing income of the character which can be offset by loss carryforwards. Other objective negative evidence evaluated is the impact recently enacted federal tax legislation will have on future taxable income and on AEP’s ability to benefit from the carryforward of charitable contribution deductions. On the basis of this evaluation, AEP did not record a change in the valuation allowance in the first quarter of 2016. A valuation allowance of $130 million has been recorded against AEP’s deferred tax asset balance as of March 31, 2016. The valuation allowance reflects management’s assessment of the amount of deferred tax assets that are more likely than not to be realized. The amount of the deferred tax assets realizable; however, could be adjusted if estimates of future taxable income are materially impacted during the carryforward period. Federal and State Income Tax Audit Status AEP and subsidiaries are no longer subject to U.S. federal examination for years before 2011. The IRS examination of years 2011, 2012 and 2013 started in April 2014. AEP and subsidiaries received a Revenue Agents Report in April 2016, completing the 2011 through 2013 audit cycle indicating an agreed upon audit. Although the outcome of tax audits is uncertain, in management’s opinion, adequate provisions for federal income taxes have been made for potential liabilities resulting from such matters. In addition, the Registrants accrue interest on these uncertain tax positions. Management is not aware of any issues for open tax years that upon final resolution are expected to materially impact net income. AEP and subsidiaries file income tax returns in various state, local or foreign jurisdictions. These taxing authorities routinely examine the tax returns. AEP and subsidiaries are currently under examination in several state and local jurisdictions. However, it is possible that previously filed tax returns have positions that may be challenged by these tax authorities. Management believes that adequate provisions for income taxes have been made for potential liabilities resulting from such challenges and that the ultimate resolution of these audits will not materially impact net income. The Registrants are no longer subject to state, local or non-U.S. income tax examinations by tax authorities for years before 2009. State Tax Legislation (Applies to AEP, PSO and SWEPCo) In March 2016, the Texas Comptroller of Public Accounts issued clarifying guidance regarding the treatment of transmission and distribution expenses included in the computation of taxable income for purposes of calculating the Texas gross margins tax. The guidance clarified which specific transmission and distribution expenses are included in the computation of the cost of goods sold deduction. This guidance resulted in a net favorable adjustment to net income of $10 million , $1 million and $5 million for AEP, PSO and SWEPCo, respectively. In March 2016, Louisiana enacted several tax bills impacting income taxes, franchise taxes and sales taxes. The income tax provisions limit the use of Louisiana net operating losses and the sales tax provisions increase the sales tax rate and suspend or eliminate certain exemptions. The legislation is not expected to materially impact net income or cash flows. |
Indiana Michigan Power Co [Member] | |
Income Taxes | INCOME TAXES The disclosures in this note apply to all Registrants unless indicated otherwise. AEP System Tax Allocation Agreement AEP and subsidiaries join in the filing of a consolidated federal income tax return. The allocation of the AEP System’s current consolidated federal income tax to the AEP System companies allocates the benefit of current tax losses to the AEP System companies giving rise to such losses in determining their current tax expense. The tax benefit of the Parent is allocated to its subsidiaries with taxable income. With the exception of the loss of the Parent, the method of allocation reflects a separate return result for each company in the consolidated group. Valuation Allowance (Applies to AEP) AEP assesses available positive and negative evidence to estimate whether sufficient future taxable income of the appropriate tax character will be generated to realize the benefits of existing deferred tax assets. When the evaluation of the evidence indicates that AEP will not be able to realize the benefits of existing deferred tax assets, a valuation allowance is recorded to reduce existing deferred tax assets to the net realizable amount. Objective negative evidence evaluated includes whether AEP has a history of recognizing income of the character which can be offset by loss carryforwards. Other objective negative evidence evaluated is the impact recently enacted federal tax legislation will have on future taxable income and on AEP’s ability to benefit from the carryforward of charitable contribution deductions. On the basis of this evaluation, AEP did not record a change in the valuation allowance in the first quarter of 2016. A valuation allowance of $130 million has been recorded against AEP’s deferred tax asset balance as of March 31, 2016. The valuation allowance reflects management’s assessment of the amount of deferred tax assets that are more likely than not to be realized. The amount of the deferred tax assets realizable; however, could be adjusted if estimates of future taxable income are materially impacted during the carryforward period. Federal and State Income Tax Audit Status AEP and subsidiaries are no longer subject to U.S. federal examination for years before 2011. The IRS examination of years 2011, 2012 and 2013 started in April 2014. AEP and subsidiaries received a Revenue Agents Report in April 2016, completing the 2011 through 2013 audit cycle indicating an agreed upon audit. Although the outcome of tax audits is uncertain, in management’s opinion, adequate provisions for federal income taxes have been made for potential liabilities resulting from such matters. In addition, the Registrants accrue interest on these uncertain tax positions. Management is not aware of any issues for open tax years that upon final resolution are expected to materially impact net income. AEP and subsidiaries file income tax returns in various state, local or foreign jurisdictions. These taxing authorities routinely examine the tax returns. AEP and subsidiaries are currently under examination in several state and local jurisdictions. However, it is possible that previously filed tax returns have positions that may be challenged by these tax authorities. Management believes that adequate provisions for income taxes have been made for potential liabilities resulting from such challenges and that the ultimate resolution of these audits will not materially impact net income. The Registrants are no longer subject to state, local or non-U.S. income tax examinations by tax authorities for years before 2009. State Tax Legislation (Applies to AEP, PSO and SWEPCo) In March 2016, the Texas Comptroller of Public Accounts issued clarifying guidance regarding the treatment of transmission and distribution expenses included in the computation of taxable income for purposes of calculating the Texas gross margins tax. The guidance clarified which specific transmission and distribution expenses are included in the computation of the cost of goods sold deduction. This guidance resulted in a net favorable adjustment to net income of $10 million , $1 million and $5 million for AEP, PSO and SWEPCo, respectively. In March 2016, Louisiana enacted several tax bills impacting income taxes, franchise taxes and sales taxes. The income tax provisions limit the use of Louisiana net operating losses and the sales tax provisions increase the sales tax rate and suspend or eliminate certain exemptions. The legislation is not expected to materially impact net income or cash flows. |
Ohio Power Co [Member] | |
Income Taxes | INCOME TAXES The disclosures in this note apply to all Registrants unless indicated otherwise. AEP System Tax Allocation Agreement AEP and subsidiaries join in the filing of a consolidated federal income tax return. The allocation of the AEP System’s current consolidated federal income tax to the AEP System companies allocates the benefit of current tax losses to the AEP System companies giving rise to such losses in determining their current tax expense. The tax benefit of the Parent is allocated to its subsidiaries with taxable income. With the exception of the loss of the Parent, the method of allocation reflects a separate return result for each company in the consolidated group. Valuation Allowance (Applies to AEP) AEP assesses available positive and negative evidence to estimate whether sufficient future taxable income of the appropriate tax character will be generated to realize the benefits of existing deferred tax assets. When the evaluation of the evidence indicates that AEP will not be able to realize the benefits of existing deferred tax assets, a valuation allowance is recorded to reduce existing deferred tax assets to the net realizable amount. Objective negative evidence evaluated includes whether AEP has a history of recognizing income of the character which can be offset by loss carryforwards. Other objective negative evidence evaluated is the impact recently enacted federal tax legislation will have on future taxable income and on AEP’s ability to benefit from the carryforward of charitable contribution deductions. On the basis of this evaluation, AEP did not record a change in the valuation allowance in the first quarter of 2016. A valuation allowance of $130 million has been recorded against AEP’s deferred tax asset balance as of March 31, 2016. The valuation allowance reflects management’s assessment of the amount of deferred tax assets that are more likely than not to be realized. The amount of the deferred tax assets realizable; however, could be adjusted if estimates of future taxable income are materially impacted during the carryforward period. Federal and State Income Tax Audit Status AEP and subsidiaries are no longer subject to U.S. federal examination for years before 2011. The IRS examination of years 2011, 2012 and 2013 started in April 2014. AEP and subsidiaries received a Revenue Agents Report in April 2016, completing the 2011 through 2013 audit cycle indicating an agreed upon audit. Although the outcome of tax audits is uncertain, in management’s opinion, adequate provisions for federal income taxes have been made for potential liabilities resulting from such matters. In addition, the Registrants accrue interest on these uncertain tax positions. Management is not aware of any issues for open tax years that upon final resolution are expected to materially impact net income. AEP and subsidiaries file income tax returns in various state, local or foreign jurisdictions. These taxing authorities routinely examine the tax returns. AEP and subsidiaries are currently under examination in several state and local jurisdictions. However, it is possible that previously filed tax returns have positions that may be challenged by these tax authorities. Management believes that adequate provisions for income taxes have been made for potential liabilities resulting from such challenges and that the ultimate resolution of these audits will not materially impact net income. The Registrants are no longer subject to state, local or non-U.S. income tax examinations by tax authorities for years before 2009. State Tax Legislation (Applies to AEP, PSO and SWEPCo) In March 2016, the Texas Comptroller of Public Accounts issued clarifying guidance regarding the treatment of transmission and distribution expenses included in the computation of taxable income for purposes of calculating the Texas gross margins tax. The guidance clarified which specific transmission and distribution expenses are included in the computation of the cost of goods sold deduction. This guidance resulted in a net favorable adjustment to net income of $10 million , $1 million and $5 million for AEP, PSO and SWEPCo, respectively. In March 2016, Louisiana enacted several tax bills impacting income taxes, franchise taxes and sales taxes. The income tax provisions limit the use of Louisiana net operating losses and the sales tax provisions increase the sales tax rate and suspend or eliminate certain exemptions. The legislation is not expected to materially impact net income or cash flows. |
Public Service Co Of Oklahoma [Member] | |
Income Taxes | INCOME TAXES The disclosures in this note apply to all Registrants unless indicated otherwise. AEP System Tax Allocation Agreement AEP and subsidiaries join in the filing of a consolidated federal income tax return. The allocation of the AEP System’s current consolidated federal income tax to the AEP System companies allocates the benefit of current tax losses to the AEP System companies giving rise to such losses in determining their current tax expense. The tax benefit of the Parent is allocated to its subsidiaries with taxable income. With the exception of the loss of the Parent, the method of allocation reflects a separate return result for each company in the consolidated group. Valuation Allowance (Applies to AEP) AEP assesses available positive and negative evidence to estimate whether sufficient future taxable income of the appropriate tax character will be generated to realize the benefits of existing deferred tax assets. When the evaluation of the evidence indicates that AEP will not be able to realize the benefits of existing deferred tax assets, a valuation allowance is recorded to reduce existing deferred tax assets to the net realizable amount. Objective negative evidence evaluated includes whether AEP has a history of recognizing income of the character which can be offset by loss carryforwards. Other objective negative evidence evaluated is the impact recently enacted federal tax legislation will have on future taxable income and on AEP’s ability to benefit from the carryforward of charitable contribution deductions. On the basis of this evaluation, AEP did not record a change in the valuation allowance in the first quarter of 2016. A valuation allowance of $130 million has been recorded against AEP’s deferred tax asset balance as of March 31, 2016. The valuation allowance reflects management’s assessment of the amount of deferred tax assets that are more likely than not to be realized. The amount of the deferred tax assets realizable; however, could be adjusted if estimates of future taxable income are materially impacted during the carryforward period. Federal and State Income Tax Audit Status AEP and subsidiaries are no longer subject to U.S. federal examination for years before 2011. The IRS examination of years 2011, 2012 and 2013 started in April 2014. AEP and subsidiaries received a Revenue Agents Report in April 2016, completing the 2011 through 2013 audit cycle indicating an agreed upon audit. Although the outcome of tax audits is uncertain, in management’s opinion, adequate provisions for federal income taxes have been made for potential liabilities resulting from such matters. In addition, the Registrants accrue interest on these uncertain tax positions. Management is not aware of any issues for open tax years that upon final resolution are expected to materially impact net income. AEP and subsidiaries file income tax returns in various state, local or foreign jurisdictions. These taxing authorities routinely examine the tax returns. AEP and subsidiaries are currently under examination in several state and local jurisdictions. However, it is possible that previously filed tax returns have positions that may be challenged by these tax authorities. Management believes that adequate provisions for income taxes have been made for potential liabilities resulting from such challenges and that the ultimate resolution of these audits will not materially impact net income. The Registrants are no longer subject to state, local or non-U.S. income tax examinations by tax authorities for years before 2009. State Tax Legislation (Applies to AEP, PSO and SWEPCo) In March 2016, the Texas Comptroller of Public Accounts issued clarifying guidance regarding the treatment of transmission and distribution expenses included in the computation of taxable income for purposes of calculating the Texas gross margins tax. The guidance clarified which specific transmission and distribution expenses are included in the computation of the cost of goods sold deduction. This guidance resulted in a net favorable adjustment to net income of $10 million , $1 million and $5 million for AEP, PSO and SWEPCo, respectively. In March 2016, Louisiana enacted several tax bills impacting income taxes, franchise taxes and sales taxes. The income tax provisions limit the use of Louisiana net operating losses and the sales tax provisions increase the sales tax rate and suspend or eliminate certain exemptions. The legislation is not expected to materially impact net income or cash flows. |
Southwestern Electric Power Co [Member] | |
Income Taxes | INCOME TAXES The disclosures in this note apply to all Registrants unless indicated otherwise. AEP System Tax Allocation Agreement AEP and subsidiaries join in the filing of a consolidated federal income tax return. The allocation of the AEP System’s current consolidated federal income tax to the AEP System companies allocates the benefit of current tax losses to the AEP System companies giving rise to such losses in determining their current tax expense. The tax benefit of the Parent is allocated to its subsidiaries with taxable income. With the exception of the loss of the Parent, the method of allocation reflects a separate return result for each company in the consolidated group. Valuation Allowance (Applies to AEP) AEP assesses available positive and negative evidence to estimate whether sufficient future taxable income of the appropriate tax character will be generated to realize the benefits of existing deferred tax assets. When the evaluation of the evidence indicates that AEP will not be able to realize the benefits of existing deferred tax assets, a valuation allowance is recorded to reduce existing deferred tax assets to the net realizable amount. Objective negative evidence evaluated includes whether AEP has a history of recognizing income of the character which can be offset by loss carryforwards. Other objective negative evidence evaluated is the impact recently enacted federal tax legislation will have on future taxable income and on AEP’s ability to benefit from the carryforward of charitable contribution deductions. On the basis of this evaluation, AEP did not record a change in the valuation allowance in the first quarter of 2016. A valuation allowance of $130 million has been recorded against AEP’s deferred tax asset balance as of March 31, 2016. The valuation allowance reflects management’s assessment of the amount of deferred tax assets that are more likely than not to be realized. The amount of the deferred tax assets realizable; however, could be adjusted if estimates of future taxable income are materially impacted during the carryforward period. Federal and State Income Tax Audit Status AEP and subsidiaries are no longer subject to U.S. federal examination for years before 2011. The IRS examination of years 2011, 2012 and 2013 started in April 2014. AEP and subsidiaries received a Revenue Agents Report in April 2016, completing the 2011 through 2013 audit cycle indicating an agreed upon audit. Although the outcome of tax audits is uncertain, in management’s opinion, adequate provisions for federal income taxes have been made for potential liabilities resulting from such matters. In addition, the Registrants accrue interest on these uncertain tax positions. Management is not aware of any issues for open tax years that upon final resolution are expected to materially impact net income. AEP and subsidiaries file income tax returns in various state, local or foreign jurisdictions. These taxing authorities routinely examine the tax returns. AEP and subsidiaries are currently under examination in several state and local jurisdictions. However, it is possible that previously filed tax returns have positions that may be challenged by these tax authorities. Management believes that adequate provisions for income taxes have been made for potential liabilities resulting from such challenges and that the ultimate resolution of these audits will not materially impact net income. The Registrants are no longer subject to state, local or non-U.S. income tax examinations by tax authorities for years before 2009. State Tax Legislation (Applies to AEP, PSO and SWEPCo) In March 2016, the Texas Comptroller of Public Accounts issued clarifying guidance regarding the treatment of transmission and distribution expenses included in the computation of taxable income for purposes of calculating the Texas gross margins tax. The guidance clarified which specific transmission and distribution expenses are included in the computation of the cost of goods sold deduction. This guidance resulted in a net favorable adjustment to net income of $10 million , $1 million and $5 million for AEP, PSO and SWEPCo, respectively. In March 2016, Louisiana enacted several tax bills impacting income taxes, franchise taxes and sales taxes. The income tax provisions limit the use of Louisiana net operating losses and the sales tax provisions increase the sales tax rate and suspend or eliminate certain exemptions. The legislation is not expected to materially impact net income or cash flows. |
Financing Activities
Financing Activities | 3 Months Ended |
Mar. 31, 2016 | |
Financing Activities | FINANCING ACTIVITIES The disclosures in this note apply to all Registrants unless indicated otherwise. Long-term Debt Outstanding (Applies to AEP) The following table details long-term debt outstanding as of March 31, 2016 and December 31, 2015 : Type of Debt March 31, 2016 December 31, 2015 (in millions) Senior Unsecured Notes $ 14,026.2 $ 13,629.1 Pollution Control Bonds 1,784.1 1,784.8 Notes Payable 233.6 264.7 Securitization Bonds 1,863.1 2,024.0 Spent Nuclear Fuel Obligation (a) 265.7 265.6 Other Long-term Debt 1,609.9 1,604.5 Total Long-term Debt Outstanding 19,782.6 19,572.7 Long-term Debt Due Within One Year 2,033.3 1,831.8 Long-term Debt $ 17,749.3 $ 17,740.9 (a) Pursuant to the Nuclear Waste Policy Act of 1982, I&M, a nuclear licensee, has an obligation to the United States Department of Energy for spent nuclear fuel disposal. The obligation includes a one-time fee for nuclear fuel consumed prior to April 7, 1983. Trust fund assets related to this obligation were $309 million and $309 million as of March 31, 2016 and December 31, 2015 , respectively, and are included in Spent Nuclear Fuel and Decommissioning Trusts on the condensed balance sheets. Long-term Debt Activity Long-term debt and other securities issued, retired and principal payments made during the first three months of 2016 are shown in the tables below: Company Type of Debt Principal Amount (a) Interest Rate Due Date Issuances: (in millions) (%) APCo Pollution Control Bonds $ 125.3 Variable 2016 I&M Senior Unsecured Notes 400.0 4.55 2046 Non-Registrant: Transource Missouri Other Long-term Debt 5.5 Variable 2018 Total Issuances $ 530.8 (a) Amounts indicated on the statements of cash flows are net of issuance costs and premium or discount and will not tie to the issuance amounts. Company Type of Debt Principal Amount Paid Interest Rate Due Date Retirements and Principal Payments: (in millions) (%) APCo Pollution Control Bonds $ 125.3 Variable 2016 APCo Securitization Bonds 11.2 2.008 2024 I&M Notes Payable 0.4 Variable 2016 I&M Notes Payable 0.3 2.12 2016 I&M Notes Payable 6.9 Variable 2017 I&M Notes Payable 10.2 Variable 2019 I&M Notes Payable 10.7 Variable 2019 I&M Other Long-term Debt 0.3 6.00 2025 OPCo Securitization Bonds 22.8 0.958 2018 PSO Other Long-term Debt 0.1 3.00 2027 SWEPCo Notes Payable 1.6 4.58 2032 Non-Registrant: AEGCo Senior Unsecured Notes 3.7 6.33 2037 AEP Subsidiaries Notes Payable 1.0 Variable 2017 TCC Securitization Bonds 44.2 6.25 2016 TCC Securitization Bonds 83.7 5.17 2018 Total Retirements and Principal Payments $ 322.4 In April 2016, I&M retired $13 million of Notes Payable related to DCC Fuel. In April 2016, Transource Missouri drew $6 million on an existing variable rate credit facility due in 2018 . As of March 31, 2016 , trustees held, on behalf of AEP, $554 million of their reacquired Pollution Control Bonds. Of this total, $40 million and $345 million related to I&M and OPCo, respectively. Dividend Restrictions Parent Restrictions (Applies to AEP) The holders of AEP’s common stock are entitled to receive the dividends declared by the Board of Directors provided funds are legally available for such dividends. Parent’s income primarily derives from common stock equity in the earnings of its utility subsidiaries. Pursuant to the leverage restrictions in credit agreements, AEP must maintain a percentage of debt to total capitalization at a level that does not exceed 67.5% . The payment of cash dividends indirectly results in an increase in the percentage of debt to total capitalization of the company distributing the dividend. The method for calculating outstanding debt and capitalization is contractually defined in the credit agreements. As of March 31, 2016 , none of AEP’s retained earnings were restricted for the purpose of the payment of dividends. Utility Subsidiaries’ Restrictions AEP utility subsidiaries pay dividends to Parent provided funds are legally available. Various financing arrangements and regulatory requirements may impose certain restrictions on the ability of the subsidiaries to transfer funds to Parent in the form of dividends. Certain AEP subsidiaries have credit agreements that contain a covenant that limits their debt to capitalization ratio to 67.5% . The Federal Power Act prohibits the utility subsidiaries from participating “in the making or paying of any dividends of such public utility from any funds properly included in capital account.” As of March 31, 2016 , this restriction did not limit the ability of the utility subsidiaries to pay dividends out of retained earnings. Additionally, the Federal Power Act creates a reserve on earnings attributable to hydroelectric generation plants. Because of their ownership of such plants, this reserve applies to AGR, APCo and I&M. Corporate Borrowing Program - AEP System (Applies to Registrant Subsidiaries) The AEP System uses a corporate borrowing program to meet the short-term borrowing needs of AEP’s subsidiaries. The corporate borrowing program includes a Utility Money Pool, which funds AEP’s utility subsidiaries, and a Nonutility Money Pool, which funds certain AEP nonutility subsidiaries. The AEP System Utility Money Pool operates in accordance with the terms and conditions of the AEP System Utility Money Pool agreement filed with the FERC. The amounts of outstanding loans to (borrowings from) the Utility Money Pool as of March 31, 2016 and December 31, 2015 are included in Advances to Affiliates and Advances from Affiliates, respectively, on each of the Registrant Subsidiaries’ condensed balance sheets. The Utility Money Pool participants’ money pool activity and their corresponding authorized borrowing limits for the three months ended March 31, 2016 are described in the following table: Company Maximum Borrowings from the Utility Money Pool Maximum Loans to the Utility Money Pool Average Borrowings from the Utility Money Pool Average Loans to the Utility Money Pool Net Loans to (Borrowings from) the Utility Money Pool as of March 31, 2016 Authorized Short-term Borrowing Limit (in millions) APCo $ 286.9 $ 25.7 $ 183.2 $ 25.5 $ (146.4 ) $ 600.0 I&M 369.1 62.5 267.3 17.0 2.8 500.0 OPCo — 379.2 — 304.7 221.9 400.0 PSO — 91.0 — 48.7 8.4 300.0 SWEPCo 221.8 — 148.0 — (217.8 ) 350.0 The activity in the above table does not include short-term lending activity of SWEPCo’s wholly-owned subsidiary, Mutual Energy SWEPCo, LLC, which is a participant in the Nonutility Money Pool. The amounts of outstanding loans to the Nonutility Money Pool as of March 31, 2016 and December 31, 2015 are included in Advances to Affiliates on SWEPCo’s condensed balance sheets. For the three months ended March 31, 2016 , Mutual Energy SWEPCo, LLC had the following activity in the Nonutility Money Pool: Maximum Average Loans Loans Loans to the to the to the Nonutility Nonutility Nonutility Money Pool as of Money Pool Money Pool March 31, 2016 (in millions) $ 2.0 $ 2.0 $ 2.0 The maximum and minimum interest rates for funds either borrowed from or loaned to the Utility Money Pool were as follows: Three Months Ended March 31, 2016 2015 Maximum Interest Rate 0.83 % 0.59 % Minimum Interest Rate 0.69 % 0.39 % The average interest rates for funds borrowed from and loaned to the Utility Money Pool for the three months ended March 31, 2016 and 2015 are summarized for all Registrant Subsidiaries in the following table: Average Interest Rate for Funds Borrowed from the Utility Money Pool for Average Interest Rate for Funds Loaned to the Utility Money Pool for Three Months Ended March 31, Three Months Ended March 31, Company 2016 2015 2016 2015 APCo 0.73 % — % 0.73 % 0.45 % I&M 0.72 % 0.46 % 0.74 % 0.46 % OPCo — % — % 0.73 % 0.46 % PSO — % 0.49 % 0.72 % 0.44 % SWEPCo 0.73 % 0.46 % — % 0.52 % Maximum, minimum and average interest rates for funds loaned to the Nonutility Money Pool for the three months ended March 31, 2016 are summarized for Mutual Energy SWEPCo, LLC in the following table: Maximum Minimum Average Interest Rate Interest Rate Interest Rate for Funds for Funds for Funds Three Loaned to Loaned to Loaned to Months Ended the Nonutility the Nonutility the Nonutility March 31, Money Pool Money Pool Money Pool 2016 0.83 % 0.69 % 0.73 % Short-term Debt (Applies to AEP) Outstanding short-term debt was as follows: March 31, 2016 December 31, 2015 Type of Debt Outstanding Amount Interest Rate (a) Outstanding Interest (in millions) (in millions) Securitized Debt for Receivables (b) $ 719.0 0.58 % $ 675.0 0.30 % Commercial Paper 502.0 0.77 % 125.0 0.81 % Total Short-term Debt $ 1,221.0 $ 800.0 (a) Weighted average rate. (b) Amount of securitized debt for receivables as accounted for under the “Transfers and Servicing” accounting guidance. Credit Facilities For a discussion of credit facilities, see “Letters of Credit” section of Note 5 . Sale of Receivables – AEP Credit (Applies to AEP) AEP Credit has a receivables securitization agreement with bank conduits. Under the securitization agreement, AEP Credit receives financing from the bank conduits for the interest in the receivables AEP Credit acquires from affiliated utility subsidiaries. These securitized transactions allow AEP Credit to repay its outstanding debt obligations, continue to purchase the operating companies’ receivables and accelerate AEP Credit’s cash collections. AEP Credit’s receivables securitization agreement provides a commitment of $750 million from bank conduits to purchase receivables and expires in June 2017. Accounts receivable information for AEP Credit is as follows: Three Months Ended March 31, 2016 2015 (dollars in millions) Effective Interest Rates on Securitization of Accounts Receivable 0.58 % 0.26 % Net Uncollectible Accounts Receivable Written Off $ 5.7 $ 6.6 March 31, 2016 December 31, 2015 (in millions) Accounts Receivable Retained Interest and Pledged as Collateral Less Uncollectible Accounts $ 849.8 $ 924.8 Total Principal Outstanding 719.0 675.0 Delinquent Securitized Accounts Receivable 52.1 48.3 Bad Debt Reserves Related to Securitization of Accounts Receivable 20.9 17.5 Unbilled Receivables Related to Securitization of Accounts Receivable 264.0 357.8 AEP Credit’s delinquent customer accounts receivable represent accounts greater than 30 days past due. Sale of Receivables – AEP Credit (Applies to Registrant Subsidiaries) Under this sale of receivables arrangement, the Registrant Subsidiaries sell, without recourse, certain of their customer accounts receivable and accrued unbilled revenue balances to AEP Credit and are charged a fee based on AEP Credit’s financing costs, administrative costs and uncollectible accounts experience for each Registrant Subsidiary’s receivables. APCo does not have regulatory authority to sell its West Virginia accounts receivable. The costs of customer accounts receivable sold are reported in Other Operation expense on the Registrant Subsidiaries’ condensed statements of income. The Registrant Subsidiaries manage and service their customer accounts receivable, which are sold to AEP Credit. AEP Credit securitizes the eligible receivables for the operating companies and retains the remainder. The amount of accounts receivable and accrued unbilled revenues under the sale of receivables agreement for each Registrant Subsidiary as of March 31, 2016 and December 31, 2015 was as follows: Company March 31, 2016 December 31, 2015 (in millions) APCo $ 136.6 $ 135.4 I&M 125.3 134.8 OPCo 339.0 351.4 PSO 94.5 116.1 SWEPCo 121.2 151.8 The fees paid by the Registrant Subsidiaries to AEP Credit for customer accounts receivable sold were: Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 1.8 $ 2.5 I&M 1.9 2.4 OPCo 7.9 8.0 PSO 1.4 1.4 SWEPCo 1.5 1.7 The Registrant Subsidiaries’ proceeds on the sale of receivables to AEP Credit were: Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 384.4 $ 429.6 I&M 388.1 419.6 OPCo 646.6 715.0 PSO 272.1 302.5 SWEPCo 336.1 373.2 |
Appalachian Power Co [Member] | |
Financing Activities | FINANCING ACTIVITIES The disclosures in this note apply to all Registrants unless indicated otherwise. Long-term Debt Outstanding (Applies to AEP) The following table details long-term debt outstanding as of March 31, 2016 and December 31, 2015 : Type of Debt March 31, 2016 December 31, 2015 (in millions) Senior Unsecured Notes $ 14,026.2 $ 13,629.1 Pollution Control Bonds 1,784.1 1,784.8 Notes Payable 233.6 264.7 Securitization Bonds 1,863.1 2,024.0 Spent Nuclear Fuel Obligation (a) 265.7 265.6 Other Long-term Debt 1,609.9 1,604.5 Total Long-term Debt Outstanding 19,782.6 19,572.7 Long-term Debt Due Within One Year 2,033.3 1,831.8 Long-term Debt $ 17,749.3 $ 17,740.9 (a) Pursuant to the Nuclear Waste Policy Act of 1982, I&M, a nuclear licensee, has an obligation to the United States Department of Energy for spent nuclear fuel disposal. The obligation includes a one-time fee for nuclear fuel consumed prior to April 7, 1983. Trust fund assets related to this obligation were $309 million and $309 million as of March 31, 2016 and December 31, 2015 , respectively, and are included in Spent Nuclear Fuel and Decommissioning Trusts on the condensed balance sheets. Long-term Debt Activity Long-term debt and other securities issued, retired and principal payments made during the first three months of 2016 are shown in the tables below: Company Type of Debt Principal Amount (a) Interest Rate Due Date Issuances: (in millions) (%) APCo Pollution Control Bonds $ 125.3 Variable 2016 I&M Senior Unsecured Notes 400.0 4.55 2046 Non-Registrant: Transource Missouri Other Long-term Debt 5.5 Variable 2018 Total Issuances $ 530.8 (a) Amounts indicated on the statements of cash flows are net of issuance costs and premium or discount and will not tie to the issuance amounts. Company Type of Debt Principal Amount Paid Interest Rate Due Date Retirements and Principal Payments: (in millions) (%) APCo Pollution Control Bonds $ 125.3 Variable 2016 APCo Securitization Bonds 11.2 2.008 2024 I&M Notes Payable 0.4 Variable 2016 I&M Notes Payable 0.3 2.12 2016 I&M Notes Payable 6.9 Variable 2017 I&M Notes Payable 10.2 Variable 2019 I&M Notes Payable 10.7 Variable 2019 I&M Other Long-term Debt 0.3 6.00 2025 OPCo Securitization Bonds 22.8 0.958 2018 PSO Other Long-term Debt 0.1 3.00 2027 SWEPCo Notes Payable 1.6 4.58 2032 Non-Registrant: AEGCo Senior Unsecured Notes 3.7 6.33 2037 AEP Subsidiaries Notes Payable 1.0 Variable 2017 TCC Securitization Bonds 44.2 6.25 2016 TCC Securitization Bonds 83.7 5.17 2018 Total Retirements and Principal Payments $ 322.4 In April 2016, I&M retired $13 million of Notes Payable related to DCC Fuel. In April 2016, Transource Missouri drew $6 million on an existing variable rate credit facility due in 2018 . As of March 31, 2016 , trustees held, on behalf of AEP, $554 million of their reacquired Pollution Control Bonds. Of this total, $40 million and $345 million related to I&M and OPCo, respectively. Dividend Restrictions Parent Restrictions (Applies to AEP) The holders of AEP’s common stock are entitled to receive the dividends declared by the Board of Directors provided funds are legally available for such dividends. Parent’s income primarily derives from common stock equity in the earnings of its utility subsidiaries. Pursuant to the leverage restrictions in credit agreements, AEP must maintain a percentage of debt to total capitalization at a level that does not exceed 67.5% . The payment of cash dividends indirectly results in an increase in the percentage of debt to total capitalization of the company distributing the dividend. The method for calculating outstanding debt and capitalization is contractually defined in the credit agreements. As of March 31, 2016 , none of AEP’s retained earnings were restricted for the purpose of the payment of dividends. Utility Subsidiaries’ Restrictions AEP utility subsidiaries pay dividends to Parent provided funds are legally available. Various financing arrangements and regulatory requirements may impose certain restrictions on the ability of the subsidiaries to transfer funds to Parent in the form of dividends. Certain AEP subsidiaries have credit agreements that contain a covenant that limits their debt to capitalization ratio to 67.5% . The Federal Power Act prohibits the utility subsidiaries from participating “in the making or paying of any dividends of such public utility from any funds properly included in capital account.” As of March 31, 2016 , this restriction did not limit the ability of the utility subsidiaries to pay dividends out of retained earnings. Additionally, the Federal Power Act creates a reserve on earnings attributable to hydroelectric generation plants. Because of their ownership of such plants, this reserve applies to AGR, APCo and I&M. Corporate Borrowing Program - AEP System (Applies to Registrant Subsidiaries) The AEP System uses a corporate borrowing program to meet the short-term borrowing needs of AEP’s subsidiaries. The corporate borrowing program includes a Utility Money Pool, which funds AEP’s utility subsidiaries, and a Nonutility Money Pool, which funds certain AEP nonutility subsidiaries. The AEP System Utility Money Pool operates in accordance with the terms and conditions of the AEP System Utility Money Pool agreement filed with the FERC. The amounts of outstanding loans to (borrowings from) the Utility Money Pool as of March 31, 2016 and December 31, 2015 are included in Advances to Affiliates and Advances from Affiliates, respectively, on each of the Registrant Subsidiaries’ condensed balance sheets. The Utility Money Pool participants’ money pool activity and their corresponding authorized borrowing limits for the three months ended March 31, 2016 are described in the following table: Company Maximum Borrowings from the Utility Money Pool Maximum Loans to the Utility Money Pool Average Borrowings from the Utility Money Pool Average Loans to the Utility Money Pool Net Loans to (Borrowings from) the Utility Money Pool as of March 31, 2016 Authorized Short-term Borrowing Limit (in millions) APCo $ 286.9 $ 25.7 $ 183.2 $ 25.5 $ (146.4 ) $ 600.0 I&M 369.1 62.5 267.3 17.0 2.8 500.0 OPCo — 379.2 — 304.7 221.9 400.0 PSO — 91.0 — 48.7 8.4 300.0 SWEPCo 221.8 — 148.0 — (217.8 ) 350.0 The activity in the above table does not include short-term lending activity of SWEPCo’s wholly-owned subsidiary, Mutual Energy SWEPCo, LLC, which is a participant in the Nonutility Money Pool. The amounts of outstanding loans to the Nonutility Money Pool as of March 31, 2016 and December 31, 2015 are included in Advances to Affiliates on SWEPCo’s condensed balance sheets. For the three months ended March 31, 2016 , Mutual Energy SWEPCo, LLC had the following activity in the Nonutility Money Pool: Maximum Average Loans Loans Loans to the to the to the Nonutility Nonutility Nonutility Money Pool as of Money Pool Money Pool March 31, 2016 (in millions) $ 2.0 $ 2.0 $ 2.0 The maximum and minimum interest rates for funds either borrowed from or loaned to the Utility Money Pool were as follows: Three Months Ended March 31, 2016 2015 Maximum Interest Rate 0.83 % 0.59 % Minimum Interest Rate 0.69 % 0.39 % The average interest rates for funds borrowed from and loaned to the Utility Money Pool for the three months ended March 31, 2016 and 2015 are summarized for all Registrant Subsidiaries in the following table: Average Interest Rate for Funds Borrowed from the Utility Money Pool for Average Interest Rate for Funds Loaned to the Utility Money Pool for Three Months Ended March 31, Three Months Ended March 31, Company 2016 2015 2016 2015 APCo 0.73 % — % 0.73 % 0.45 % I&M 0.72 % 0.46 % 0.74 % 0.46 % OPCo — % — % 0.73 % 0.46 % PSO — % 0.49 % 0.72 % 0.44 % SWEPCo 0.73 % 0.46 % — % 0.52 % Maximum, minimum and average interest rates for funds loaned to the Nonutility Money Pool for the three months ended March 31, 2016 are summarized for Mutual Energy SWEPCo, LLC in the following table: Maximum Minimum Average Interest Rate Interest Rate Interest Rate for Funds for Funds for Funds Three Loaned to Loaned to Loaned to Months Ended the Nonutility the Nonutility the Nonutility March 31, Money Pool Money Pool Money Pool 2016 0.83 % 0.69 % 0.73 % Short-term Debt (Applies to AEP) Outstanding short-term debt was as follows: March 31, 2016 December 31, 2015 Type of Debt Outstanding Amount Interest Rate (a) Outstanding Interest (in millions) (in millions) Securitized Debt for Receivables (b) $ 719.0 0.58 % $ 675.0 0.30 % Commercial Paper 502.0 0.77 % 125.0 0.81 % Total Short-term Debt $ 1,221.0 $ 800.0 (a) Weighted average rate. (b) Amount of securitized debt for receivables as accounted for under the “Transfers and Servicing” accounting guidance. Credit Facilities For a discussion of credit facilities, see “Letters of Credit” section of Note 5 . Sale of Receivables – AEP Credit (Applies to AEP) AEP Credit has a receivables securitization agreement with bank conduits. Under the securitization agreement, AEP Credit receives financing from the bank conduits for the interest in the receivables AEP Credit acquires from affiliated utility subsidiaries. These securitized transactions allow AEP Credit to repay its outstanding debt obligations, continue to purchase the operating companies’ receivables and accelerate AEP Credit’s cash collections. AEP Credit’s receivables securitization agreement provides a commitment of $750 million from bank conduits to purchase receivables and expires in June 2017. Accounts receivable information for AEP Credit is as follows: Three Months Ended March 31, 2016 2015 (dollars in millions) Effective Interest Rates on Securitization of Accounts Receivable 0.58 % 0.26 % Net Uncollectible Accounts Receivable Written Off $ 5.7 $ 6.6 March 31, 2016 December 31, 2015 (in millions) Accounts Receivable Retained Interest and Pledged as Collateral Less Uncollectible Accounts $ 849.8 $ 924.8 Total Principal Outstanding 719.0 675.0 Delinquent Securitized Accounts Receivable 52.1 48.3 Bad Debt Reserves Related to Securitization of Accounts Receivable 20.9 17.5 Unbilled Receivables Related to Securitization of Accounts Receivable 264.0 357.8 AEP Credit’s delinquent customer accounts receivable represent accounts greater than 30 days past due. Sale of Receivables – AEP Credit (Applies to Registrant Subsidiaries) Under this sale of receivables arrangement, the Registrant Subsidiaries sell, without recourse, certain of their customer accounts receivable and accrued unbilled revenue balances to AEP Credit and are charged a fee based on AEP Credit’s financing costs, administrative costs and uncollectible accounts experience for each Registrant Subsidiary’s receivables. APCo does not have regulatory authority to sell its West Virginia accounts receivable. The costs of customer accounts receivable sold are reported in Other Operation expense on the Registrant Subsidiaries’ condensed statements of income. The Registrant Subsidiaries manage and service their customer accounts receivable, which are sold to AEP Credit. AEP Credit securitizes the eligible receivables for the operating companies and retains the remainder. The amount of accounts receivable and accrued unbilled revenues under the sale of receivables agreement for each Registrant Subsidiary as of March 31, 2016 and December 31, 2015 was as follows: Company March 31, 2016 December 31, 2015 (in millions) APCo $ 136.6 $ 135.4 I&M 125.3 134.8 OPCo 339.0 351.4 PSO 94.5 116.1 SWEPCo 121.2 151.8 The fees paid by the Registrant Subsidiaries to AEP Credit for customer accounts receivable sold were: Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 1.8 $ 2.5 I&M 1.9 2.4 OPCo 7.9 8.0 PSO 1.4 1.4 SWEPCo 1.5 1.7 The Registrant Subsidiaries’ proceeds on the sale of receivables to AEP Credit were: Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 384.4 $ 429.6 I&M 388.1 419.6 OPCo 646.6 715.0 PSO 272.1 302.5 SWEPCo 336.1 373.2 |
Indiana Michigan Power Co [Member] | |
Financing Activities | FINANCING ACTIVITIES The disclosures in this note apply to all Registrants unless indicated otherwise. Long-term Debt Outstanding (Applies to AEP) The following table details long-term debt outstanding as of March 31, 2016 and December 31, 2015 : Type of Debt March 31, 2016 December 31, 2015 (in millions) Senior Unsecured Notes $ 14,026.2 $ 13,629.1 Pollution Control Bonds 1,784.1 1,784.8 Notes Payable 233.6 264.7 Securitization Bonds 1,863.1 2,024.0 Spent Nuclear Fuel Obligation (a) 265.7 265.6 Other Long-term Debt 1,609.9 1,604.5 Total Long-term Debt Outstanding 19,782.6 19,572.7 Long-term Debt Due Within One Year 2,033.3 1,831.8 Long-term Debt $ 17,749.3 $ 17,740.9 (a) Pursuant to the Nuclear Waste Policy Act of 1982, I&M, a nuclear licensee, has an obligation to the United States Department of Energy for spent nuclear fuel disposal. The obligation includes a one-time fee for nuclear fuel consumed prior to April 7, 1983. Trust fund assets related to this obligation were $309 million and $309 million as of March 31, 2016 and December 31, 2015 , respectively, and are included in Spent Nuclear Fuel and Decommissioning Trusts on the condensed balance sheets. Long-term Debt Activity Long-term debt and other securities issued, retired and principal payments made during the first three months of 2016 are shown in the tables below: Company Type of Debt Principal Amount (a) Interest Rate Due Date Issuances: (in millions) (%) APCo Pollution Control Bonds $ 125.3 Variable 2016 I&M Senior Unsecured Notes 400.0 4.55 2046 Non-Registrant: Transource Missouri Other Long-term Debt 5.5 Variable 2018 Total Issuances $ 530.8 (a) Amounts indicated on the statements of cash flows are net of issuance costs and premium or discount and will not tie to the issuance amounts. Company Type of Debt Principal Amount Paid Interest Rate Due Date Retirements and Principal Payments: (in millions) (%) APCo Pollution Control Bonds $ 125.3 Variable 2016 APCo Securitization Bonds 11.2 2.008 2024 I&M Notes Payable 0.4 Variable 2016 I&M Notes Payable 0.3 2.12 2016 I&M Notes Payable 6.9 Variable 2017 I&M Notes Payable 10.2 Variable 2019 I&M Notes Payable 10.7 Variable 2019 I&M Other Long-term Debt 0.3 6.00 2025 OPCo Securitization Bonds 22.8 0.958 2018 PSO Other Long-term Debt 0.1 3.00 2027 SWEPCo Notes Payable 1.6 4.58 2032 Non-Registrant: AEGCo Senior Unsecured Notes 3.7 6.33 2037 AEP Subsidiaries Notes Payable 1.0 Variable 2017 TCC Securitization Bonds 44.2 6.25 2016 TCC Securitization Bonds 83.7 5.17 2018 Total Retirements and Principal Payments $ 322.4 In April 2016, I&M retired $13 million of Notes Payable related to DCC Fuel. In April 2016, Transource Missouri drew $6 million on an existing variable rate credit facility due in 2018 . As of March 31, 2016 , trustees held, on behalf of AEP, $554 million of their reacquired Pollution Control Bonds. Of this total, $40 million and $345 million related to I&M and OPCo, respectively. Dividend Restrictions Parent Restrictions (Applies to AEP) The holders of AEP’s common stock are entitled to receive the dividends declared by the Board of Directors provided funds are legally available for such dividends. Parent’s income primarily derives from common stock equity in the earnings of its utility subsidiaries. Pursuant to the leverage restrictions in credit agreements, AEP must maintain a percentage of debt to total capitalization at a level that does not exceed 67.5% . The payment of cash dividends indirectly results in an increase in the percentage of debt to total capitalization of the company distributing the dividend. The method for calculating outstanding debt and capitalization is contractually defined in the credit agreements. As of March 31, 2016 , none of AEP’s retained earnings were restricted for the purpose of the payment of dividends. Utility Subsidiaries’ Restrictions AEP utility subsidiaries pay dividends to Parent provided funds are legally available. Various financing arrangements and regulatory requirements may impose certain restrictions on the ability of the subsidiaries to transfer funds to Parent in the form of dividends. Certain AEP subsidiaries have credit agreements that contain a covenant that limits their debt to capitalization ratio to 67.5% . The Federal Power Act prohibits the utility subsidiaries from participating “in the making or paying of any dividends of such public utility from any funds properly included in capital account.” As of March 31, 2016 , this restriction did not limit the ability of the utility subsidiaries to pay dividends out of retained earnings. Additionally, the Federal Power Act creates a reserve on earnings attributable to hydroelectric generation plants. Because of their ownership of such plants, this reserve applies to AGR, APCo and I&M. Corporate Borrowing Program - AEP System (Applies to Registrant Subsidiaries) The AEP System uses a corporate borrowing program to meet the short-term borrowing needs of AEP’s subsidiaries. The corporate borrowing program includes a Utility Money Pool, which funds AEP’s utility subsidiaries, and a Nonutility Money Pool, which funds certain AEP nonutility subsidiaries. The AEP System Utility Money Pool operates in accordance with the terms and conditions of the AEP System Utility Money Pool agreement filed with the FERC. The amounts of outstanding loans to (borrowings from) the Utility Money Pool as of March 31, 2016 and December 31, 2015 are included in Advances to Affiliates and Advances from Affiliates, respectively, on each of the Registrant Subsidiaries’ condensed balance sheets. The Utility Money Pool participants’ money pool activity and their corresponding authorized borrowing limits for the three months ended March 31, 2016 are described in the following table: Company Maximum Borrowings from the Utility Money Pool Maximum Loans to the Utility Money Pool Average Borrowings from the Utility Money Pool Average Loans to the Utility Money Pool Net Loans to (Borrowings from) the Utility Money Pool as of March 31, 2016 Authorized Short-term Borrowing Limit (in millions) APCo $ 286.9 $ 25.7 $ 183.2 $ 25.5 $ (146.4 ) $ 600.0 I&M 369.1 62.5 267.3 17.0 2.8 500.0 OPCo — 379.2 — 304.7 221.9 400.0 PSO — 91.0 — 48.7 8.4 300.0 SWEPCo 221.8 — 148.0 — (217.8 ) 350.0 The activity in the above table does not include short-term lending activity of SWEPCo’s wholly-owned subsidiary, Mutual Energy SWEPCo, LLC, which is a participant in the Nonutility Money Pool. The amounts of outstanding loans to the Nonutility Money Pool as of March 31, 2016 and December 31, 2015 are included in Advances to Affiliates on SWEPCo’s condensed balance sheets. For the three months ended March 31, 2016 , Mutual Energy SWEPCo, LLC had the following activity in the Nonutility Money Pool: Maximum Average Loans Loans Loans to the to the to the Nonutility Nonutility Nonutility Money Pool as of Money Pool Money Pool March 31, 2016 (in millions) $ 2.0 $ 2.0 $ 2.0 The maximum and minimum interest rates for funds either borrowed from or loaned to the Utility Money Pool were as follows: Three Months Ended March 31, 2016 2015 Maximum Interest Rate 0.83 % 0.59 % Minimum Interest Rate 0.69 % 0.39 % The average interest rates for funds borrowed from and loaned to the Utility Money Pool for the three months ended March 31, 2016 and 2015 are summarized for all Registrant Subsidiaries in the following table: Average Interest Rate for Funds Borrowed from the Utility Money Pool for Average Interest Rate for Funds Loaned to the Utility Money Pool for Three Months Ended March 31, Three Months Ended March 31, Company 2016 2015 2016 2015 APCo 0.73 % — % 0.73 % 0.45 % I&M 0.72 % 0.46 % 0.74 % 0.46 % OPCo — % — % 0.73 % 0.46 % PSO — % 0.49 % 0.72 % 0.44 % SWEPCo 0.73 % 0.46 % — % 0.52 % Maximum, minimum and average interest rates for funds loaned to the Nonutility Money Pool for the three months ended March 31, 2016 are summarized for Mutual Energy SWEPCo, LLC in the following table: Maximum Minimum Average Interest Rate Interest Rate Interest Rate for Funds for Funds for Funds Three Loaned to Loaned to Loaned to Months Ended the Nonutility the Nonutility the Nonutility March 31, Money Pool Money Pool Money Pool 2016 0.83 % 0.69 % 0.73 % Short-term Debt (Applies to AEP) Outstanding short-term debt was as follows: March 31, 2016 December 31, 2015 Type of Debt Outstanding Amount Interest Rate (a) Outstanding Interest (in millions) (in millions) Securitized Debt for Receivables (b) $ 719.0 0.58 % $ 675.0 0.30 % Commercial Paper 502.0 0.77 % 125.0 0.81 % Total Short-term Debt $ 1,221.0 $ 800.0 (a) Weighted average rate. (b) Amount of securitized debt for receivables as accounted for under the “Transfers and Servicing” accounting guidance. Credit Facilities For a discussion of credit facilities, see “Letters of Credit” section of Note 5 . Sale of Receivables – AEP Credit (Applies to AEP) AEP Credit has a receivables securitization agreement with bank conduits. Under the securitization agreement, AEP Credit receives financing from the bank conduits for the interest in the receivables AEP Credit acquires from affiliated utility subsidiaries. These securitized transactions allow AEP Credit to repay its outstanding debt obligations, continue to purchase the operating companies’ receivables and accelerate AEP Credit’s cash collections. AEP Credit’s receivables securitization agreement provides a commitment of $750 million from bank conduits to purchase receivables and expires in June 2017. Accounts receivable information for AEP Credit is as follows: Three Months Ended March 31, 2016 2015 (dollars in millions) Effective Interest Rates on Securitization of Accounts Receivable 0.58 % 0.26 % Net Uncollectible Accounts Receivable Written Off $ 5.7 $ 6.6 March 31, 2016 December 31, 2015 (in millions) Accounts Receivable Retained Interest and Pledged as Collateral Less Uncollectible Accounts $ 849.8 $ 924.8 Total Principal Outstanding 719.0 675.0 Delinquent Securitized Accounts Receivable 52.1 48.3 Bad Debt Reserves Related to Securitization of Accounts Receivable 20.9 17.5 Unbilled Receivables Related to Securitization of Accounts Receivable 264.0 357.8 AEP Credit’s delinquent customer accounts receivable represent accounts greater than 30 days past due. Sale of Receivables – AEP Credit (Applies to Registrant Subsidiaries) Under this sale of receivables arrangement, the Registrant Subsidiaries sell, without recourse, certain of their customer accounts receivable and accrued unbilled revenue balances to AEP Credit and are charged a fee based on AEP Credit’s financing costs, administrative costs and uncollectible accounts experience for each Registrant Subsidiary’s receivables. APCo does not have regulatory authority to sell its West Virginia accounts receivable. The costs of customer accounts receivable sold are reported in Other Operation expense on the Registrant Subsidiaries’ condensed statements of income. The Registrant Subsidiaries manage and service their customer accounts receivable, which are sold to AEP Credit. AEP Credit securitizes the eligible receivables for the operating companies and retains the remainder. The amount of accounts receivable and accrued unbilled revenues under the sale of receivables agreement for each Registrant Subsidiary as of March 31, 2016 and December 31, 2015 was as follows: Company March 31, 2016 December 31, 2015 (in millions) APCo $ 136.6 $ 135.4 I&M 125.3 134.8 OPCo 339.0 351.4 PSO 94.5 116.1 SWEPCo 121.2 151.8 The fees paid by the Registrant Subsidiaries to AEP Credit for customer accounts receivable sold were: Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 1.8 $ 2.5 I&M 1.9 2.4 OPCo 7.9 8.0 PSO 1.4 1.4 SWEPCo 1.5 1.7 The Registrant Subsidiaries’ proceeds on the sale of receivables to AEP Credit were: Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 384.4 $ 429.6 I&M 388.1 419.6 OPCo 646.6 715.0 PSO 272.1 302.5 SWEPCo 336.1 373.2 |
Ohio Power Co [Member] | |
Financing Activities | FINANCING ACTIVITIES The disclosures in this note apply to all Registrants unless indicated otherwise. Long-term Debt Outstanding (Applies to AEP) The following table details long-term debt outstanding as of March 31, 2016 and December 31, 2015 : Type of Debt March 31, 2016 December 31, 2015 (in millions) Senior Unsecured Notes $ 14,026.2 $ 13,629.1 Pollution Control Bonds 1,784.1 1,784.8 Notes Payable 233.6 264.7 Securitization Bonds 1,863.1 2,024.0 Spent Nuclear Fuel Obligation (a) 265.7 265.6 Other Long-term Debt 1,609.9 1,604.5 Total Long-term Debt Outstanding 19,782.6 19,572.7 Long-term Debt Due Within One Year 2,033.3 1,831.8 Long-term Debt $ 17,749.3 $ 17,740.9 (a) Pursuant to the Nuclear Waste Policy Act of 1982, I&M, a nuclear licensee, has an obligation to the United States Department of Energy for spent nuclear fuel disposal. The obligation includes a one-time fee for nuclear fuel consumed prior to April 7, 1983. Trust fund assets related to this obligation were $309 million and $309 million as of March 31, 2016 and December 31, 2015 , respectively, and are included in Spent Nuclear Fuel and Decommissioning Trusts on the condensed balance sheets. Long-term Debt Activity Long-term debt and other securities issued, retired and principal payments made during the first three months of 2016 are shown in the tables below: Company Type of Debt Principal Amount (a) Interest Rate Due Date Issuances: (in millions) (%) APCo Pollution Control Bonds $ 125.3 Variable 2016 I&M Senior Unsecured Notes 400.0 4.55 2046 Non-Registrant: Transource Missouri Other Long-term Debt 5.5 Variable 2018 Total Issuances $ 530.8 (a) Amounts indicated on the statements of cash flows are net of issuance costs and premium or discount and will not tie to the issuance amounts. Company Type of Debt Principal Amount Paid Interest Rate Due Date Retirements and Principal Payments: (in millions) (%) APCo Pollution Control Bonds $ 125.3 Variable 2016 APCo Securitization Bonds 11.2 2.008 2024 I&M Notes Payable 0.4 Variable 2016 I&M Notes Payable 0.3 2.12 2016 I&M Notes Payable 6.9 Variable 2017 I&M Notes Payable 10.2 Variable 2019 I&M Notes Payable 10.7 Variable 2019 I&M Other Long-term Debt 0.3 6.00 2025 OPCo Securitization Bonds 22.8 0.958 2018 PSO Other Long-term Debt 0.1 3.00 2027 SWEPCo Notes Payable 1.6 4.58 2032 Non-Registrant: AEGCo Senior Unsecured Notes 3.7 6.33 2037 AEP Subsidiaries Notes Payable 1.0 Variable 2017 TCC Securitization Bonds 44.2 6.25 2016 TCC Securitization Bonds 83.7 5.17 2018 Total Retirements and Principal Payments $ 322.4 In April 2016, I&M retired $13 million of Notes Payable related to DCC Fuel. In April 2016, Transource Missouri drew $6 million on an existing variable rate credit facility due in 2018 . As of March 31, 2016 , trustees held, on behalf of AEP, $554 million of their reacquired Pollution Control Bonds. Of this total, $40 million and $345 million related to I&M and OPCo, respectively. Dividend Restrictions Parent Restrictions (Applies to AEP) The holders of AEP’s common stock are entitled to receive the dividends declared by the Board of Directors provided funds are legally available for such dividends. Parent’s income primarily derives from common stock equity in the earnings of its utility subsidiaries. Pursuant to the leverage restrictions in credit agreements, AEP must maintain a percentage of debt to total capitalization at a level that does not exceed 67.5% . The payment of cash dividends indirectly results in an increase in the percentage of debt to total capitalization of the company distributing the dividend. The method for calculating outstanding debt and capitalization is contractually defined in the credit agreements. As of March 31, 2016 , none of AEP’s retained earnings were restricted for the purpose of the payment of dividends. Utility Subsidiaries’ Restrictions AEP utility subsidiaries pay dividends to Parent provided funds are legally available. Various financing arrangements and regulatory requirements may impose certain restrictions on the ability of the subsidiaries to transfer funds to Parent in the form of dividends. Certain AEP subsidiaries have credit agreements that contain a covenant that limits their debt to capitalization ratio to 67.5% . The Federal Power Act prohibits the utility subsidiaries from participating “in the making or paying of any dividends of such public utility from any funds properly included in capital account.” As of March 31, 2016 , this restriction did not limit the ability of the utility subsidiaries to pay dividends out of retained earnings. Additionally, the Federal Power Act creates a reserve on earnings attributable to hydroelectric generation plants. Because of their ownership of such plants, this reserve applies to AGR, APCo and I&M. Corporate Borrowing Program - AEP System (Applies to Registrant Subsidiaries) The AEP System uses a corporate borrowing program to meet the short-term borrowing needs of AEP’s subsidiaries. The corporate borrowing program includes a Utility Money Pool, which funds AEP’s utility subsidiaries, and a Nonutility Money Pool, which funds certain AEP nonutility subsidiaries. The AEP System Utility Money Pool operates in accordance with the terms and conditions of the AEP System Utility Money Pool agreement filed with the FERC. The amounts of outstanding loans to (borrowings from) the Utility Money Pool as of March 31, 2016 and December 31, 2015 are included in Advances to Affiliates and Advances from Affiliates, respectively, on each of the Registrant Subsidiaries’ condensed balance sheets. The Utility Money Pool participants’ money pool activity and their corresponding authorized borrowing limits for the three months ended March 31, 2016 are described in the following table: Company Maximum Borrowings from the Utility Money Pool Maximum Loans to the Utility Money Pool Average Borrowings from the Utility Money Pool Average Loans to the Utility Money Pool Net Loans to (Borrowings from) the Utility Money Pool as of March 31, 2016 Authorized Short-term Borrowing Limit (in millions) APCo $ 286.9 $ 25.7 $ 183.2 $ 25.5 $ (146.4 ) $ 600.0 I&M 369.1 62.5 267.3 17.0 2.8 500.0 OPCo — 379.2 — 304.7 221.9 400.0 PSO — 91.0 — 48.7 8.4 300.0 SWEPCo 221.8 — 148.0 — (217.8 ) 350.0 The activity in the above table does not include short-term lending activity of SWEPCo’s wholly-owned subsidiary, Mutual Energy SWEPCo, LLC, which is a participant in the Nonutility Money Pool. The amounts of outstanding loans to the Nonutility Money Pool as of March 31, 2016 and December 31, 2015 are included in Advances to Affiliates on SWEPCo’s condensed balance sheets. For the three months ended March 31, 2016 , Mutual Energy SWEPCo, LLC had the following activity in the Nonutility Money Pool: Maximum Average Loans Loans Loans to the to the to the Nonutility Nonutility Nonutility Money Pool as of Money Pool Money Pool March 31, 2016 (in millions) $ 2.0 $ 2.0 $ 2.0 The maximum and minimum interest rates for funds either borrowed from or loaned to the Utility Money Pool were as follows: Three Months Ended March 31, 2016 2015 Maximum Interest Rate 0.83 % 0.59 % Minimum Interest Rate 0.69 % 0.39 % The average interest rates for funds borrowed from and loaned to the Utility Money Pool for the three months ended March 31, 2016 and 2015 are summarized for all Registrant Subsidiaries in the following table: Average Interest Rate for Funds Borrowed from the Utility Money Pool for Average Interest Rate for Funds Loaned to the Utility Money Pool for Three Months Ended March 31, Three Months Ended March 31, Company 2016 2015 2016 2015 APCo 0.73 % — % 0.73 % 0.45 % I&M 0.72 % 0.46 % 0.74 % 0.46 % OPCo — % — % 0.73 % 0.46 % PSO — % 0.49 % 0.72 % 0.44 % SWEPCo 0.73 % 0.46 % — % 0.52 % Maximum, minimum and average interest rates for funds loaned to the Nonutility Money Pool for the three months ended March 31, 2016 are summarized for Mutual Energy SWEPCo, LLC in the following table: Maximum Minimum Average Interest Rate Interest Rate Interest Rate for Funds for Funds for Funds Three Loaned to Loaned to Loaned to Months Ended the Nonutility the Nonutility the Nonutility March 31, Money Pool Money Pool Money Pool 2016 0.83 % 0.69 % 0.73 % Short-term Debt (Applies to AEP) Outstanding short-term debt was as follows: March 31, 2016 December 31, 2015 Type of Debt Outstanding Amount Interest Rate (a) Outstanding Interest (in millions) (in millions) Securitized Debt for Receivables (b) $ 719.0 0.58 % $ 675.0 0.30 % Commercial Paper 502.0 0.77 % 125.0 0.81 % Total Short-term Debt $ 1,221.0 $ 800.0 (a) Weighted average rate. (b) Amount of securitized debt for receivables as accounted for under the “Transfers and Servicing” accounting guidance. Credit Facilities For a discussion of credit facilities, see “Letters of Credit” section of Note 5 . Sale of Receivables – AEP Credit (Applies to AEP) AEP Credit has a receivables securitization agreement with bank conduits. Under the securitization agreement, AEP Credit receives financing from the bank conduits for the interest in the receivables AEP Credit acquires from affiliated utility subsidiaries. These securitized transactions allow AEP Credit to repay its outstanding debt obligations, continue to purchase the operating companies’ receivables and accelerate AEP Credit’s cash collections. AEP Credit’s receivables securitization agreement provides a commitment of $750 million from bank conduits to purchase receivables and expires in June 2017. Accounts receivable information for AEP Credit is as follows: Three Months Ended March 31, 2016 2015 (dollars in millions) Effective Interest Rates on Securitization of Accounts Receivable 0.58 % 0.26 % Net Uncollectible Accounts Receivable Written Off $ 5.7 $ 6.6 March 31, 2016 December 31, 2015 (in millions) Accounts Receivable Retained Interest and Pledged as Collateral Less Uncollectible Accounts $ 849.8 $ 924.8 Total Principal Outstanding 719.0 675.0 Delinquent Securitized Accounts Receivable 52.1 48.3 Bad Debt Reserves Related to Securitization of Accounts Receivable 20.9 17.5 Unbilled Receivables Related to Securitization of Accounts Receivable 264.0 357.8 AEP Credit’s delinquent customer accounts receivable represent accounts greater than 30 days past due. Sale of Receivables – AEP Credit (Applies to Registrant Subsidiaries) Under this sale of receivables arrangement, the Registrant Subsidiaries sell, without recourse, certain of their customer accounts receivable and accrued unbilled revenue balances to AEP Credit and are charged a fee based on AEP Credit’s financing costs, administrative costs and uncollectible accounts experience for each Registrant Subsidiary’s receivables. APCo does not have regulatory authority to sell its West Virginia accounts receivable. The costs of customer accounts receivable sold are reported in Other Operation expense on the Registrant Subsidiaries’ condensed statements of income. The Registrant Subsidiaries manage and service their customer accounts receivable, which are sold to AEP Credit. AEP Credit securitizes the eligible receivables for the operating companies and retains the remainder. The amount of accounts receivable and accrued unbilled revenues under the sale of receivables agreement for each Registrant Subsidiary as of March 31, 2016 and December 31, 2015 was as follows: Company March 31, 2016 December 31, 2015 (in millions) APCo $ 136.6 $ 135.4 I&M 125.3 134.8 OPCo 339.0 351.4 PSO 94.5 116.1 SWEPCo 121.2 151.8 The fees paid by the Registrant Subsidiaries to AEP Credit for customer accounts receivable sold were: Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 1.8 $ 2.5 I&M 1.9 2.4 OPCo 7.9 8.0 PSO 1.4 1.4 SWEPCo 1.5 1.7 The Registrant Subsidiaries’ proceeds on the sale of receivables to AEP Credit were: Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 384.4 $ 429.6 I&M 388.1 419.6 OPCo 646.6 715.0 PSO 272.1 302.5 SWEPCo 336.1 373.2 |
Public Service Co Of Oklahoma [Member] | |
Financing Activities | FINANCING ACTIVITIES The disclosures in this note apply to all Registrants unless indicated otherwise. Long-term Debt Outstanding (Applies to AEP) The following table details long-term debt outstanding as of March 31, 2016 and December 31, 2015 : Type of Debt March 31, 2016 December 31, 2015 (in millions) Senior Unsecured Notes $ 14,026.2 $ 13,629.1 Pollution Control Bonds 1,784.1 1,784.8 Notes Payable 233.6 264.7 Securitization Bonds 1,863.1 2,024.0 Spent Nuclear Fuel Obligation (a) 265.7 265.6 Other Long-term Debt 1,609.9 1,604.5 Total Long-term Debt Outstanding 19,782.6 19,572.7 Long-term Debt Due Within One Year 2,033.3 1,831.8 Long-term Debt $ 17,749.3 $ 17,740.9 (a) Pursuant to the Nuclear Waste Policy Act of 1982, I&M, a nuclear licensee, has an obligation to the United States Department of Energy for spent nuclear fuel disposal. The obligation includes a one-time fee for nuclear fuel consumed prior to April 7, 1983. Trust fund assets related to this obligation were $309 million and $309 million as of March 31, 2016 and December 31, 2015 , respectively, and are included in Spent Nuclear Fuel and Decommissioning Trusts on the condensed balance sheets. Long-term Debt Activity Long-term debt and other securities issued, retired and principal payments made during the first three months of 2016 are shown in the tables below: Company Type of Debt Principal Amount (a) Interest Rate Due Date Issuances: (in millions) (%) APCo Pollution Control Bonds $ 125.3 Variable 2016 I&M Senior Unsecured Notes 400.0 4.55 2046 Non-Registrant: Transource Missouri Other Long-term Debt 5.5 Variable 2018 Total Issuances $ 530.8 (a) Amounts indicated on the statements of cash flows are net of issuance costs and premium or discount and will not tie to the issuance amounts. Company Type of Debt Principal Amount Paid Interest Rate Due Date Retirements and Principal Payments: (in millions) (%) APCo Pollution Control Bonds $ 125.3 Variable 2016 APCo Securitization Bonds 11.2 2.008 2024 I&M Notes Payable 0.4 Variable 2016 I&M Notes Payable 0.3 2.12 2016 I&M Notes Payable 6.9 Variable 2017 I&M Notes Payable 10.2 Variable 2019 I&M Notes Payable 10.7 Variable 2019 I&M Other Long-term Debt 0.3 6.00 2025 OPCo Securitization Bonds 22.8 0.958 2018 PSO Other Long-term Debt 0.1 3.00 2027 SWEPCo Notes Payable 1.6 4.58 2032 Non-Registrant: AEGCo Senior Unsecured Notes 3.7 6.33 2037 AEP Subsidiaries Notes Payable 1.0 Variable 2017 TCC Securitization Bonds 44.2 6.25 2016 TCC Securitization Bonds 83.7 5.17 2018 Total Retirements and Principal Payments $ 322.4 In April 2016, I&M retired $13 million of Notes Payable related to DCC Fuel. In April 2016, Transource Missouri drew $6 million on an existing variable rate credit facility due in 2018 . As of March 31, 2016 , trustees held, on behalf of AEP, $554 million of their reacquired Pollution Control Bonds. Of this total, $40 million and $345 million related to I&M and OPCo, respectively. Dividend Restrictions Parent Restrictions (Applies to AEP) The holders of AEP’s common stock are entitled to receive the dividends declared by the Board of Directors provided funds are legally available for such dividends. Parent’s income primarily derives from common stock equity in the earnings of its utility subsidiaries. Pursuant to the leverage restrictions in credit agreements, AEP must maintain a percentage of debt to total capitalization at a level that does not exceed 67.5% . The payment of cash dividends indirectly results in an increase in the percentage of debt to total capitalization of the company distributing the dividend. The method for calculating outstanding debt and capitalization is contractually defined in the credit agreements. As of March 31, 2016 , none of AEP’s retained earnings were restricted for the purpose of the payment of dividends. Utility Subsidiaries’ Restrictions AEP utility subsidiaries pay dividends to Parent provided funds are legally available. Various financing arrangements and regulatory requirements may impose certain restrictions on the ability of the subsidiaries to transfer funds to Parent in the form of dividends. Certain AEP subsidiaries have credit agreements that contain a covenant that limits their debt to capitalization ratio to 67.5% . The Federal Power Act prohibits the utility subsidiaries from participating “in the making or paying of any dividends of such public utility from any funds properly included in capital account.” As of March 31, 2016 , this restriction did not limit the ability of the utility subsidiaries to pay dividends out of retained earnings. Additionally, the Federal Power Act creates a reserve on earnings attributable to hydroelectric generation plants. Because of their ownership of such plants, this reserve applies to AGR, APCo and I&M. Corporate Borrowing Program - AEP System (Applies to Registrant Subsidiaries) The AEP System uses a corporate borrowing program to meet the short-term borrowing needs of AEP’s subsidiaries. The corporate borrowing program includes a Utility Money Pool, which funds AEP’s utility subsidiaries, and a Nonutility Money Pool, which funds certain AEP nonutility subsidiaries. The AEP System Utility Money Pool operates in accordance with the terms and conditions of the AEP System Utility Money Pool agreement filed with the FERC. The amounts of outstanding loans to (borrowings from) the Utility Money Pool as of March 31, 2016 and December 31, 2015 are included in Advances to Affiliates and Advances from Affiliates, respectively, on each of the Registrant Subsidiaries’ condensed balance sheets. The Utility Money Pool participants’ money pool activity and their corresponding authorized borrowing limits for the three months ended March 31, 2016 are described in the following table: Company Maximum Borrowings from the Utility Money Pool Maximum Loans to the Utility Money Pool Average Borrowings from the Utility Money Pool Average Loans to the Utility Money Pool Net Loans to (Borrowings from) the Utility Money Pool as of March 31, 2016 Authorized Short-term Borrowing Limit (in millions) APCo $ 286.9 $ 25.7 $ 183.2 $ 25.5 $ (146.4 ) $ 600.0 I&M 369.1 62.5 267.3 17.0 2.8 500.0 OPCo — 379.2 — 304.7 221.9 400.0 PSO — 91.0 — 48.7 8.4 300.0 SWEPCo 221.8 — 148.0 — (217.8 ) 350.0 The activity in the above table does not include short-term lending activity of SWEPCo’s wholly-owned subsidiary, Mutual Energy SWEPCo, LLC, which is a participant in the Nonutility Money Pool. The amounts of outstanding loans to the Nonutility Money Pool as of March 31, 2016 and December 31, 2015 are included in Advances to Affiliates on SWEPCo’s condensed balance sheets. For the three months ended March 31, 2016 , Mutual Energy SWEPCo, LLC had the following activity in the Nonutility Money Pool: Maximum Average Loans Loans Loans to the to the to the Nonutility Nonutility Nonutility Money Pool as of Money Pool Money Pool March 31, 2016 (in millions) $ 2.0 $ 2.0 $ 2.0 The maximum and minimum interest rates for funds either borrowed from or loaned to the Utility Money Pool were as follows: Three Months Ended March 31, 2016 2015 Maximum Interest Rate 0.83 % 0.59 % Minimum Interest Rate 0.69 % 0.39 % The average interest rates for funds borrowed from and loaned to the Utility Money Pool for the three months ended March 31, 2016 and 2015 are summarized for all Registrant Subsidiaries in the following table: Average Interest Rate for Funds Borrowed from the Utility Money Pool for Average Interest Rate for Funds Loaned to the Utility Money Pool for Three Months Ended March 31, Three Months Ended March 31, Company 2016 2015 2016 2015 APCo 0.73 % — % 0.73 % 0.45 % I&M 0.72 % 0.46 % 0.74 % 0.46 % OPCo — % — % 0.73 % 0.46 % PSO — % 0.49 % 0.72 % 0.44 % SWEPCo 0.73 % 0.46 % — % 0.52 % Maximum, minimum and average interest rates for funds loaned to the Nonutility Money Pool for the three months ended March 31, 2016 are summarized for Mutual Energy SWEPCo, LLC in the following table: Maximum Minimum Average Interest Rate Interest Rate Interest Rate for Funds for Funds for Funds Three Loaned to Loaned to Loaned to Months Ended the Nonutility the Nonutility the Nonutility March 31, Money Pool Money Pool Money Pool 2016 0.83 % 0.69 % 0.73 % Short-term Debt (Applies to AEP) Outstanding short-term debt was as follows: March 31, 2016 December 31, 2015 Type of Debt Outstanding Amount Interest Rate (a) Outstanding Interest (in millions) (in millions) Securitized Debt for Receivables (b) $ 719.0 0.58 % $ 675.0 0.30 % Commercial Paper 502.0 0.77 % 125.0 0.81 % Total Short-term Debt $ 1,221.0 $ 800.0 (a) Weighted average rate. (b) Amount of securitized debt for receivables as accounted for under the “Transfers and Servicing” accounting guidance. Credit Facilities For a discussion of credit facilities, see “Letters of Credit” section of Note 5 . Sale of Receivables – AEP Credit (Applies to AEP) AEP Credit has a receivables securitization agreement with bank conduits. Under the securitization agreement, AEP Credit receives financing from the bank conduits for the interest in the receivables AEP Credit acquires from affiliated utility subsidiaries. These securitized transactions allow AEP Credit to repay its outstanding debt obligations, continue to purchase the operating companies’ receivables and accelerate AEP Credit’s cash collections. AEP Credit’s receivables securitization agreement provides a commitment of $750 million from bank conduits to purchase receivables and expires in June 2017. Accounts receivable information for AEP Credit is as follows: Three Months Ended March 31, 2016 2015 (dollars in millions) Effective Interest Rates on Securitization of Accounts Receivable 0.58 % 0.26 % Net Uncollectible Accounts Receivable Written Off $ 5.7 $ 6.6 March 31, 2016 December 31, 2015 (in millions) Accounts Receivable Retained Interest and Pledged as Collateral Less Uncollectible Accounts $ 849.8 $ 924.8 Total Principal Outstanding 719.0 675.0 Delinquent Securitized Accounts Receivable 52.1 48.3 Bad Debt Reserves Related to Securitization of Accounts Receivable 20.9 17.5 Unbilled Receivables Related to Securitization of Accounts Receivable 264.0 357.8 AEP Credit’s delinquent customer accounts receivable represent accounts greater than 30 days past due. Sale of Receivables – AEP Credit (Applies to Registrant Subsidiaries) Under this sale of receivables arrangement, the Registrant Subsidiaries sell, without recourse, certain of their customer accounts receivable and accrued unbilled revenue balances to AEP Credit and are charged a fee based on AEP Credit’s financing costs, administrative costs and uncollectible accounts experience for each Registrant Subsidiary’s receivables. APCo does not have regulatory authority to sell its West Virginia accounts receivable. The costs of customer accounts receivable sold are reported in Other Operation expense on the Registrant Subsidiaries’ condensed statements of income. The Registrant Subsidiaries manage and service their customer accounts receivable, which are sold to AEP Credit. AEP Credit securitizes the eligible receivables for the operating companies and retains the remainder. The amount of accounts receivable and accrued unbilled revenues under the sale of receivables agreement for each Registrant Subsidiary as of March 31, 2016 and December 31, 2015 was as follows: Company March 31, 2016 December 31, 2015 (in millions) APCo $ 136.6 $ 135.4 I&M 125.3 134.8 OPCo 339.0 351.4 PSO 94.5 116.1 SWEPCo 121.2 151.8 The fees paid by the Registrant Subsidiaries to AEP Credit for customer accounts receivable sold were: Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 1.8 $ 2.5 I&M 1.9 2.4 OPCo 7.9 8.0 PSO 1.4 1.4 SWEPCo 1.5 1.7 The Registrant Subsidiaries’ proceeds on the sale of receivables to AEP Credit were: Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 384.4 $ 429.6 I&M 388.1 419.6 OPCo 646.6 715.0 PSO 272.1 302.5 SWEPCo 336.1 373.2 |
Southwestern Electric Power Co [Member] | |
Financing Activities | FINANCING ACTIVITIES The disclosures in this note apply to all Registrants unless indicated otherwise. Long-term Debt Outstanding (Applies to AEP) The following table details long-term debt outstanding as of March 31, 2016 and December 31, 2015 : Type of Debt March 31, 2016 December 31, 2015 (in millions) Senior Unsecured Notes $ 14,026.2 $ 13,629.1 Pollution Control Bonds 1,784.1 1,784.8 Notes Payable 233.6 264.7 Securitization Bonds 1,863.1 2,024.0 Spent Nuclear Fuel Obligation (a) 265.7 265.6 Other Long-term Debt 1,609.9 1,604.5 Total Long-term Debt Outstanding 19,782.6 19,572.7 Long-term Debt Due Within One Year 2,033.3 1,831.8 Long-term Debt $ 17,749.3 $ 17,740.9 (a) Pursuant to the Nuclear Waste Policy Act of 1982, I&M, a nuclear licensee, has an obligation to the United States Department of Energy for spent nuclear fuel disposal. The obligation includes a one-time fee for nuclear fuel consumed prior to April 7, 1983. Trust fund assets related to this obligation were $309 million and $309 million as of March 31, 2016 and December 31, 2015 , respectively, and are included in Spent Nuclear Fuel and Decommissioning Trusts on the condensed balance sheets. Long-term Debt Activity Long-term debt and other securities issued, retired and principal payments made during the first three months of 2016 are shown in the tables below: Company Type of Debt Principal Amount (a) Interest Rate Due Date Issuances: (in millions) (%) APCo Pollution Control Bonds $ 125.3 Variable 2016 I&M Senior Unsecured Notes 400.0 4.55 2046 Non-Registrant: Transource Missouri Other Long-term Debt 5.5 Variable 2018 Total Issuances $ 530.8 (a) Amounts indicated on the statements of cash flows are net of issuance costs and premium or discount and will not tie to the issuance amounts. Company Type of Debt Principal Amount Paid Interest Rate Due Date Retirements and Principal Payments: (in millions) (%) APCo Pollution Control Bonds $ 125.3 Variable 2016 APCo Securitization Bonds 11.2 2.008 2024 I&M Notes Payable 0.4 Variable 2016 I&M Notes Payable 0.3 2.12 2016 I&M Notes Payable 6.9 Variable 2017 I&M Notes Payable 10.2 Variable 2019 I&M Notes Payable 10.7 Variable 2019 I&M Other Long-term Debt 0.3 6.00 2025 OPCo Securitization Bonds 22.8 0.958 2018 PSO Other Long-term Debt 0.1 3.00 2027 SWEPCo Notes Payable 1.6 4.58 2032 Non-Registrant: AEGCo Senior Unsecured Notes 3.7 6.33 2037 AEP Subsidiaries Notes Payable 1.0 Variable 2017 TCC Securitization Bonds 44.2 6.25 2016 TCC Securitization Bonds 83.7 5.17 2018 Total Retirements and Principal Payments $ 322.4 In April 2016, I&M retired $13 million of Notes Payable related to DCC Fuel. In April 2016, Transource Missouri drew $6 million on an existing variable rate credit facility due in 2018 . As of March 31, 2016 , trustees held, on behalf of AEP, $554 million of their reacquired Pollution Control Bonds. Of this total, $40 million and $345 million related to I&M and OPCo, respectively. Dividend Restrictions Parent Restrictions (Applies to AEP) The holders of AEP’s common stock are entitled to receive the dividends declared by the Board of Directors provided funds are legally available for such dividends. Parent’s income primarily derives from common stock equity in the earnings of its utility subsidiaries. Pursuant to the leverage restrictions in credit agreements, AEP must maintain a percentage of debt to total capitalization at a level that does not exceed 67.5% . The payment of cash dividends indirectly results in an increase in the percentage of debt to total capitalization of the company distributing the dividend. The method for calculating outstanding debt and capitalization is contractually defined in the credit agreements. As of March 31, 2016 , none of AEP’s retained earnings were restricted for the purpose of the payment of dividends. Utility Subsidiaries’ Restrictions AEP utility subsidiaries pay dividends to Parent provided funds are legally available. Various financing arrangements and regulatory requirements may impose certain restrictions on the ability of the subsidiaries to transfer funds to Parent in the form of dividends. Certain AEP subsidiaries have credit agreements that contain a covenant that limits their debt to capitalization ratio to 67.5% . The Federal Power Act prohibits the utility subsidiaries from participating “in the making or paying of any dividends of such public utility from any funds properly included in capital account.” As of March 31, 2016 , this restriction did not limit the ability of the utility subsidiaries to pay dividends out of retained earnings. Additionally, the Federal Power Act creates a reserve on earnings attributable to hydroelectric generation plants. Because of their ownership of such plants, this reserve applies to AGR, APCo and I&M. Corporate Borrowing Program - AEP System (Applies to Registrant Subsidiaries) The AEP System uses a corporate borrowing program to meet the short-term borrowing needs of AEP’s subsidiaries. The corporate borrowing program includes a Utility Money Pool, which funds AEP’s utility subsidiaries, and a Nonutility Money Pool, which funds certain AEP nonutility subsidiaries. The AEP System Utility Money Pool operates in accordance with the terms and conditions of the AEP System Utility Money Pool agreement filed with the FERC. The amounts of outstanding loans to (borrowings from) the Utility Money Pool as of March 31, 2016 and December 31, 2015 are included in Advances to Affiliates and Advances from Affiliates, respectively, on each of the Registrant Subsidiaries’ condensed balance sheets. The Utility Money Pool participants’ money pool activity and their corresponding authorized borrowing limits for the three months ended March 31, 2016 are described in the following table: Company Maximum Borrowings from the Utility Money Pool Maximum Loans to the Utility Money Pool Average Borrowings from the Utility Money Pool Average Loans to the Utility Money Pool Net Loans to (Borrowings from) the Utility Money Pool as of March 31, 2016 Authorized Short-term Borrowing Limit (in millions) APCo $ 286.9 $ 25.7 $ 183.2 $ 25.5 $ (146.4 ) $ 600.0 I&M 369.1 62.5 267.3 17.0 2.8 500.0 OPCo — 379.2 — 304.7 221.9 400.0 PSO — 91.0 — 48.7 8.4 300.0 SWEPCo 221.8 — 148.0 — (217.8 ) 350.0 The activity in the above table does not include short-term lending activity of SWEPCo’s wholly-owned subsidiary, Mutual Energy SWEPCo, LLC, which is a participant in the Nonutility Money Pool. The amounts of outstanding loans to the Nonutility Money Pool as of March 31, 2016 and December 31, 2015 are included in Advances to Affiliates on SWEPCo’s condensed balance sheets. For the three months ended March 31, 2016 , Mutual Energy SWEPCo, LLC had the following activity in the Nonutility Money Pool: Maximum Average Loans Loans Loans to the to the to the Nonutility Nonutility Nonutility Money Pool as of Money Pool Money Pool March 31, 2016 (in millions) $ 2.0 $ 2.0 $ 2.0 The maximum and minimum interest rates for funds either borrowed from or loaned to the Utility Money Pool were as follows: Three Months Ended March 31, 2016 2015 Maximum Interest Rate 0.83 % 0.59 % Minimum Interest Rate 0.69 % 0.39 % The average interest rates for funds borrowed from and loaned to the Utility Money Pool for the three months ended March 31, 2016 and 2015 are summarized for all Registrant Subsidiaries in the following table: Average Interest Rate for Funds Borrowed from the Utility Money Pool for Average Interest Rate for Funds Loaned to the Utility Money Pool for Three Months Ended March 31, Three Months Ended March 31, Company 2016 2015 2016 2015 APCo 0.73 % — % 0.73 % 0.45 % I&M 0.72 % 0.46 % 0.74 % 0.46 % OPCo — % — % 0.73 % 0.46 % PSO — % 0.49 % 0.72 % 0.44 % SWEPCo 0.73 % 0.46 % — % 0.52 % Maximum, minimum and average interest rates for funds loaned to the Nonutility Money Pool for the three months ended March 31, 2016 are summarized for Mutual Energy SWEPCo, LLC in the following table: Maximum Minimum Average Interest Rate Interest Rate Interest Rate for Funds for Funds for Funds Three Loaned to Loaned to Loaned to Months Ended the Nonutility the Nonutility the Nonutility March 31, Money Pool Money Pool Money Pool 2016 0.83 % 0.69 % 0.73 % Short-term Debt (Applies to AEP) Outstanding short-term debt was as follows: March 31, 2016 December 31, 2015 Type of Debt Outstanding Amount Interest Rate (a) Outstanding Interest (in millions) (in millions) Securitized Debt for Receivables (b) $ 719.0 0.58 % $ 675.0 0.30 % Commercial Paper 502.0 0.77 % 125.0 0.81 % Total Short-term Debt $ 1,221.0 $ 800.0 (a) Weighted average rate. (b) Amount of securitized debt for receivables as accounted for under the “Transfers and Servicing” accounting guidance. Credit Facilities For a discussion of credit facilities, see “Letters of Credit” section of Note 5 . Sale of Receivables – AEP Credit (Applies to AEP) AEP Credit has a receivables securitization agreement with bank conduits. Under the securitization agreement, AEP Credit receives financing from the bank conduits for the interest in the receivables AEP Credit acquires from affiliated utility subsidiaries. These securitized transactions allow AEP Credit to repay its outstanding debt obligations, continue to purchase the operating companies’ receivables and accelerate AEP Credit’s cash collections. AEP Credit’s receivables securitization agreement provides a commitment of $750 million from bank conduits to purchase receivables and expires in June 2017. Accounts receivable information for AEP Credit is as follows: Three Months Ended March 31, 2016 2015 (dollars in millions) Effective Interest Rates on Securitization of Accounts Receivable 0.58 % 0.26 % Net Uncollectible Accounts Receivable Written Off $ 5.7 $ 6.6 March 31, 2016 December 31, 2015 (in millions) Accounts Receivable Retained Interest and Pledged as Collateral Less Uncollectible Accounts $ 849.8 $ 924.8 Total Principal Outstanding 719.0 675.0 Delinquent Securitized Accounts Receivable 52.1 48.3 Bad Debt Reserves Related to Securitization of Accounts Receivable 20.9 17.5 Unbilled Receivables Related to Securitization of Accounts Receivable 264.0 357.8 AEP Credit’s delinquent customer accounts receivable represent accounts greater than 30 days past due. Sale of Receivables – AEP Credit (Applies to Registrant Subsidiaries) Under this sale of receivables arrangement, the Registrant Subsidiaries sell, without recourse, certain of their customer accounts receivable and accrued unbilled revenue balances to AEP Credit and are charged a fee based on AEP Credit’s financing costs, administrative costs and uncollectible accounts experience for each Registrant Subsidiary’s receivables. APCo does not have regulatory authority to sell its West Virginia accounts receivable. The costs of customer accounts receivable sold are reported in Other Operation expense on the Registrant Subsidiaries’ condensed statements of income. The Registrant Subsidiaries manage and service their customer accounts receivable, which are sold to AEP Credit. AEP Credit securitizes the eligible receivables for the operating companies and retains the remainder. The amount of accounts receivable and accrued unbilled revenues under the sale of receivables agreement for each Registrant Subsidiary as of March 31, 2016 and December 31, 2015 was as follows: Company March 31, 2016 December 31, 2015 (in millions) APCo $ 136.6 $ 135.4 I&M 125.3 134.8 OPCo 339.0 351.4 PSO 94.5 116.1 SWEPCo 121.2 151.8 The fees paid by the Registrant Subsidiaries to AEP Credit for customer accounts receivable sold were: Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 1.8 $ 2.5 I&M 1.9 2.4 OPCo 7.9 8.0 PSO 1.4 1.4 SWEPCo 1.5 1.7 The Registrant Subsidiaries’ proceeds on the sale of receivables to AEP Credit were: Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 384.4 $ 429.6 I&M 388.1 419.6 OPCo 646.6 715.0 PSO 272.1 302.5 SWEPCo 336.1 373.2 |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2016 | |
Variable Interest Entities | VARIABLE INTEREST ENTITIES The disclosures in this note apply to all Registrants unless indicated otherwise. The accounting guidance for “Variable Interest Entities” is a consolidation model that considers if a company has a controlling financial interest in a VIE. A controlling financial interest will have both (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. Entities are required to consolidate a VIE when it is determined that they have a controlling financial interest in a VIE and therefore, are the primary beneficiary of that VIE, as defined by the accounting guidance for “Variable Interest Entities.” In determining whether AEP is the primary beneficiary of a VIE, management considers factors such as equity at risk, the amount of the VIE’s variability AEP absorbs, guarantees of indebtedness, voting rights including kick-out rights, the power to direct the VIE, variable interests held by related parties and other factors. Management believes that significant assumptions and judgments were applied consistently. AEP is the primary beneficiary of Sabine, DCC Fuel, Transition Funding, Ohio Phase-in-Recovery Funding, Appalachian Consumer Rate Relief Funding, AEP Credit, a protected cell of EIS and Transource Energy. In addition, AEP has not provided material financial or other support to any of these entities that was not previously contractually required. AEP holds a significant variable interest in DHLC and Potomac-Appalachian Transmission Highline, LLC West Virginia Series (West Virginia Series). Consolidated Variable Interests Entities Sabine is a mining operator providing mining services to SWEPCo. SWEPCo has no equity investment in Sabine but is Sabine’s only customer. SWEPCo guarantees the debt obligations and lease obligations of Sabine. Under the terms of the note agreements, substantially all assets are pledged and all rights under the lignite mining agreement are assigned to SWEPCo. The creditors of Sabine have no recourse to any AEP entity other than SWEPCo. Under the provisions of the mining agreement, SWEPCo is required to pay, as a part of the cost of lignite delivered, an amount equal to mining costs plus a management fee. In addition, SWEPCo determines how much coal will be mined each year. Based on these facts, management concluded that SWEPCo is the primary beneficiary and is required to consolidate Sabine. SWEPCo’s total billings from Sabine for the three months ended March 31, 2016 and 2015 were $41 million and $42 million , respectively. See the tables below for the classification of Sabine’s assets and liabilities on SWEPCo’s condensed balance sheets. I&M has nuclear fuel lease agreements with DCC Fuel, which was formed for the purpose of acquiring, owning and leasing nuclear fuel to I&M. DCC Fuel purchased the nuclear fuel from I&M with funds received from the issuance of notes to financial institutions. Each DCC Fuel entity is a single-lessee leasing arrangement with only one asset and is capitalized with all debt. Each is a separate legal entity from I&M, the assets of which are not available to satisfy the debts of I&M. Payments on the leases for the three months ended March 31, 2016 and 2015 were $29 million and $23 million , respectively. The leases were recorded as capital leases on I&M’s balance sheet as title to the nuclear fuel transfers to I&M at the end of the respective lease terms, which do not exceed 54 months. Based on I&M’s control of DCC Fuel, management concluded that I&M is the primary beneficiary and is required to consolidate DCC Fuel. The capital leases are eliminated upon consolidation. See the tables below for the classification of DCC Fuel’s assets and liabilities on I&M’s condensed balance sheets. Transition Funding was formed for the sole purpose of issuing and servicing securitization bonds related to Texas Restructuring Legislation. Management has concluded that TCC is the primary beneficiary of Transition Funding because TCC has the power to direct the most significant activities of the VIE and TCC’s equity interest could potentially be significant. Therefore, TCC is required to consolidate Transition Funding. The securitized bonds totaled $1.4 billion and $1.5 billion as of March 31, 2016 and December 31, 2015 , respectively, and are included in Long-term Debt Due Within One Year - Nonaffiliated and Long-term Debt - Nonaffiliated on the condensed balance sheets. Transition Funding has securitized transition assets of $1.3 billion and $1.3 billion as of March 31, 2016 and December 31, 2015 , respectively, which are presented separately on the face of the condensed balance sheets. The securitized transition assets represent the right to impose and collect Texas true-up costs from customers receiving electric transmission or distribution service from TCC under recovery mechanisms approved by the PUCT. The securitization bonds are payable only from and secured by the securitized transition assets. The bondholders have no recourse to TCC or any other AEP entity. TCC acts as the servicer for Transition Funding’s securitized transition assets and remits all related amounts collected from customers to Transition Funding for interest and principal payments on the securitization bonds and related costs. See the tables below for the classification of Transition Funding’s assets and liabilities on the condensed balance sheets. Ohio Phase-in-Recovery Funding was formed for the sole purpose of issuing and servicing securitization bonds related to phase-in recovery property. Management has concluded that OPCo is the primary beneficiary of Ohio Phase-in-Recovery Funding because OPCo has the power to direct the most significant activities of the VIE and OPCo’s equity interest could potentially be significant. Therefore, OPCo is required to consolidate Ohio Phase-in-Recovery Funding. The securitized bonds totaled $163 million and $185 million as of March 31, 2016 and December 31, 2015 , respectively, and are included in Long-term Debt Due Within One Year - Nonaffiliated and Long-term Debt - Nonaffiliated on the condensed balance sheets. Ohio Phase-in-Recovery Funding has securitized assets of $80 million and $86 million as of March 31, 2016 and December 31, 2015 , respectively, which are presented separately on the face of the condensed balance sheets. The phase-in recovery property represents the right to impose and collect Ohio deferred distribution charges from customers receiving electric transmission and distribution service from OPCo under a recovery mechanism approved by the PUCO. In August 2013, securitization bonds were issued. The securitization bonds are payable only from and secured by the securitized assets. The bondholders have no recourse to OPCo or any other AEP entity. OPCo acts as the servicer for Ohio Phase-in-Recovery Funding’s securitized assets and remits all related amounts collected from customers to Ohio Phase-in-Recovery Funding for interest and principal payments on the securitization bonds and related costs. See the tables below for the classification of Ohio Phase-in-Recovery Funding’s assets and liabilities on OPCo’s condensed balance sheets. Appalachian Consumer Rate Relief Funding was formed for the sole purpose of issuing and servicing securitization bonds related to APCo’s under-recovered ENEC deferral balance. Management has concluded that APCo is the primary beneficiary of Appalachian Consumer Rate Relief Funding because APCo has the power to direct the most significant activities of the VIE and APCo’s equity interest could potentially be significant. Therefore, APCo is required to consolidate Appalachian Consumer Rate Relief Funding. The securitized bonds totaled $330 million and $342 million , as of March 31, 2016 and December 31, 2015 , respectively, and are included in Long-term Debt Due Within One Year - Nonaffiliated and Long-term Debt - Nonaffiliated on the condensed balance sheets. Appalachian Consumer Rate Relief Funding has securitized assets of $322 million and $328 million , as of March 31, 2016 and December 31, 2015 , respectively, which are presented separately on the face of the condensed balance sheets. The phase-in recovery property represents the right to impose and collect West Virginia deferred generation charges from customers receiving electric transmission, distribution and generation service from APCo under a recovery mechanism approved by the WVPSC. In November 2013, securitization bonds were issued. The securitization bonds are payable only from and secured by the securitized assets. The bondholders have no recourse to APCo or any other AEP entity. APCo acts as the servicer for Appalachian Consumer Rate Relief Funding’s securitized assets and remits all related amounts collected from customers to Appalachian Consumer Rate Relief Funding for interest and principal payments on the securitization bonds and related costs. See the tables below for the classification of Appalachian Consumer Rate Relief Funding’s assets and liabilities on APCo’s condensed balance sheets. AEP Credit is a wholly-owned subsidiary of Parent. AEP Credit purchases, without recourse, accounts receivable from certain utility subsidiaries of AEP to reduce working capital requirements. AEP provides a minimum of 5% equity and up to 20% of AEP Credit’s short-term borrowing needs in excess of third party financings. Any third party financing of AEP Credit only has recourse to the receivables securitized for such financing. Based on AEP’s control of AEP Credit, management concluded that AEP is the primary beneficiary and is required to consolidate AEP Credit. See the tables below for the classification of AEP Credit’s assets and liabilities on the condensed balance sheets. See “Sale of Receivables - AEP Credit” section of Note 12 . AEP’s subsidiaries participate in one protected cell of EIS for approximately ten lines of insurance. EIS has multiple protected cells. Neither AEP nor its subsidiaries have an equity investment in EIS. The AEP System is essentially this EIS cell’s only participant, but allows certain third parties access to this insurance. AEP’s subsidiaries and any allowed third parties share in the insurance coverage, premiums and risk of loss from claims. Based on AEP’s control and the structure of the protected cell of EIS, management concluded that AEP is the primary beneficiary of the protected cell and are required to consolidate the protected cell of EIS. The insurance premium expense to the protected cell for the three months ended March 31, 2016 and 2015 were $13 million and $14 million , respectively. See the tables below for the classification of the protected cell’s assets and liabilities on the condensed balance sheets. Transource Energy was formed for the purpose of investing in utilities which develop, acquire, construct, own and operate transmission facilities in accordance with FERC-approved rates. AEP has equity and voting ownership of 86.5% with the other owner having 13.5% interest. Management has concluded that Transource Energy is a VIE and that AEP is the primary beneficiary because AEP has the power to direct the most significant activities of the entity and AEP’s equity interest could potentially be significant. Therefore, AEP is required to consolidate Transource Energy. In January 2014, Transource Missouri (a wholly-owned subsidiary of Transource Energy) acquired transmission assets from the non-controlling owner and issued debt and received a capital contribution to fund the acquisition. The majority of Transource Energy’s activity resulted from the asset acquisition, construction projects, debt issuance and capital contribution. AEP has provided capital contributions to Transource Energy of $8 million and $47 million during the three months ended March 31, 2016 and the year ended December 31, 2015 , respectively. AEP and the other owner of Transource Energy are required to ensure a specific equity level in Transource Missouri upon completion of projects or if a project is abandoned by the RTO. See the tables below for the classification of Transource Energy’s assets and liabilities on the condensed balance sheets. The balances below represent the assets and liabilities of the VIEs that are consolidated. These balances include intercompany transactions that are eliminated upon consolidation. AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES VARIABLE INTEREST ENTITIES March 31, 2016 Registrant Subsidiaries Other Consolidated VIEs SWEPCo Sabine I&M DCC Fuel OPCo APCo AEP Credit TCC Transition Funding Protected Cell of EIS Transource Energy (in millions) ASSETS Current Assets $ 59.6 $ 79.6 $ 18.8 $ 10.8 $ 850.4 $ 139.4 $ 172.5 $ 13.6 Net Property, Plant and Equipment 140.4 129.0 — — — — — 253.1 Other Noncurrent Assets 62.8 67.7 150.6 (a) 326.2 (b) 7.6 1,316.8 (c) 2.0 6.3 Total Assets $ 262.8 $ 276.3 $ 169.4 $ 337.0 $ 858.0 $ 1,456.2 $ 174.5 $ 273.0 LIABILITIES AND EQUITY Current Liabilities $ 37.3 $ 73.4 $ 46.2 $ 24.8 $ 781.9 $ 238.0 $ 48.8 $ 44.5 Noncurrent Liabilities 225.1 202.9 121.9 310.9 0.4 1,200.1 81.8 118.7 Equity 0.4 — 1.3 1.3 75.7 18.1 43.9 109.8 Total Liabilities and Equity $ 262.8 $ 276.3 $ 169.4 $ 337.0 $ 858.0 $ 1,456.2 $ 174.5 $ 273.0 (a) Includes an intercompany item eliminated in consolidation of $70.7 million . (b) Includes an intercompany item eliminated in consolidation of $3.9 million . (c) Includes an intercompany item eliminated in consolidation of $66.6 million . AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES VARIABLE INTEREST ENTITIES December 31, 2015 Registrant Subsidiaries Other Consolidated VIEs SWEPCo Sabine I&M DCC Fuel OPCo APCo AEP Credit TCC Transition Funding Protected Cell of EIS Transource Energy (in millions) ASSETS Current Assets $ 61.7 $ 91.1 $ 31.2 $ 18.5 $ 925.7 $ 234.1 $ 165.3 $ 10.8 Net Property, Plant and Equipment 147.0 159.9 — — — — — 227.2 Other Noncurrent Assets 61.8 84.6 162.0 (a) 332.0 (b) 6.4 1,365.7 (c) 1.9 5.5 Total Assets $ 270.5 $ 335.6 $ 193.2 $ 350.5 $ 932.1 $ 1,599.8 $ 167.2 $ 243.5 LIABILITIES AND EQUITY Current Liabilities $ 47.7 $ 84.8 $ 47.3 $ 27.1 $ 855.1 $ 291.7 $ 41.8 $ 36.6 Noncurrent Liabilities 222.3 250.8 144.6 321.5 0.3 1,290.0 83.9 113.0 Equity 0.5 — 1.3 1.9 76.7 18.1 41.5 93.9 Total Liabilities and Equity $ 270.5 $ 335.6 $ 193.2 $ 350.5 $ 932.1 $ 1,599.8 $ 167.2 $ 243.5 (a) Includes an intercompany item eliminated in consolidation of $76.1 million . (b) Includes an intercompany item eliminated in consolidation of $4.0 million . (c) Includes an intercompany item eliminated in consolidation of $68.2 million . Non-Consolidated Significant Variable Interests DHLC is a mining operator which sells 50% of the lignite produced to SWEPCo and 50% to CLECO. SWEPCo and CLECO share the executive board seats and voting rights equally. Each entity guarantees 50% of DHLC’s debt. SWEPCo and CLECO equally approve DHLC’s annual budget. The creditors of DHLC have no recourse to any AEP entity other than SWEPCo. As SWEPCo is the sole equity owner of DHLC, it receives 100% of the management fee. SWEPCo’s total billings from DHLC for the three months ended March 31, 2016 and 2015 were $15 million and $15 million , respectively. SWEPCo is not required to consolidate DHLC as it is not the primary beneficiary, although SWEPCo holds a significant variable interest in DHLC. SWEPCo’s equity investment in DHLC is included in Deferred Charges and Other Noncurrent Assets on SWEPCo’s condensed balance sheets. SWEPCo’s investment in DHLC was: March 31, 2016 December 31, 2015 As Reported on the Balance Sheet Maximum Exposure As Reported on the Balance Sheet Maximum Exposure (in millions) Capital Contribution from SWEPCo $ 7.6 $ 7.6 $ 7.6 $ 7.6 Retained Earnings 8.7 8.7 7.7 7.7 SWEPCo’s Guarantee of Debt — 87.4 — 82.9 Total Investment in DHLC $ 16.3 $ 103.7 $ 15.3 $ 98.2 AEP and FirstEnergy Corp. (FirstEnergy) have a joint venture in Potomac-Appalachian Transmission Highline, LLC (PATH). PATH is a series limited liability company and was created to construct, through its operating companies, a high-voltage transmission line project in the PJM region. PATH consists of the “West Virginia Series (PATH-WV),” owned equally by subsidiaries of FirstEnergy and AEP, and the “Allegheny Series” which is 100% owned by a subsidiary of FirstEnergy. Provisions exist within the PATH-WV agreement that make it a VIE. AEP has no interest or control in the “Allegheny Series”. AEP is not required to consolidate PATH-WV as AEP is not the primary beneficiary, although AEP holds a significant variable interest in PATH-WV. AEP’s equity investment in PATH-WV is included in Deferred Charges and Other Noncurrent Assets on the condensed balance sheets. AEP and FirstEnergy share the returns and losses equally in PATH-WV. AEP’s subsidiaries and FirstEnergy’s subsidiaries provide services to the PATH companies through service agreements. The entities recover costs through regulated rates. In August 2012, the PJM board cancelled the PATH Project, the transmission project that PATH was intended to develop and removed it from the 2012 Regional Transmission Expansion Plan. In September 2012, the PATH Project companies submitted an application to the FERC requesting authority to recover prudently-incurred costs associated with the PATH Project. In November 2012, the FERC issued an order accepting the PATH Project’s abandonment cost recovery application, subject to settlement procedures and hearing. The parties to the case have been unable to reach a settlement agreement and in March 2014, settlement judge procedures were terminated. Hearings at FERC were held in March and April 2015. In April 2015, PATH filed a stipulation agreement with the FERC that agreed to a 50% debt and 50% equity capital structure and a 4.7% cost of long-term debt for the entire amortization period. In September 2015, the Administrative Law Judge who conducted the hearings issued an Initial Decision, which if adopted by the FERC, would deem certain costs not recoverable. The Initial Decision has no binding effect. Additional briefing was submitted during the fourth quarter of 2015. The case is currently pending before FERC. Depending on the outcome of this proceeding, PATH-WV may be required to refund certain amounts that have been collected under its formula rate. Management believes its financial statements adequately address the potential impact of this proceeding. AEP’s investment in PATH-WV was: March 31, 2016 December 31, 2015 As Reported on the Balance Sheet Maximum Exposure As Reported on Maximum Exposure (in millions) Capital Contribution from Parent $ 18.8 $ 18.8 $ 18.8 $ 18.8 Retained Earnings 2.2 2.2 2.2 2.2 Total Investment in PATH-WV $ 21.0 $ 21.0 $ 21.0 $ 21.0 As of March 31, 2016 , AEP’s $21 million investment in PATH-WV was included in Deferred Charges and Other Noncurrent Assets on the condensed balance sheet. If AEP cannot ultimately recover the investment related to PATH-WV, it could reduce future net income and cash flows. AEPSC provides certain managerial and professional services to AEP’s subsidiaries. Parent is the sole equity owner of AEPSC. AEP management controls the activities of AEPSC. The costs of the services are based on a direct charge or on a prorated basis and billed to the AEP subsidiary companies at AEPSC’s cost. AEP subsidiaries have not provided financial or other support outside of the reimbursement of costs for services rendered. AEPSC finances its operations through cost reimbursement from other AEP subsidiaries. There are no other terms or arrangements between AEPSC and any of the AEP subsidiaries that could require additional financial support from an AEP subsidiary or expose them to losses outside of the normal course of business. AEPSC and its billings are subject to regulation by the FERC. AEP subsidiaries are exposed to losses to the extent they cannot recover the costs of AEPSC through their normal business operations. AEP subsidiaries are considered to have a significant interest in AEPSC due to their activity in AEPSC’s cost reimbursement structure. However, AEP subsidiaries do not have control over AEPSC. AEPSC is consolidated by AEP. In the event AEPSC would require financing or other support outside the cost reimbursement billings, this financing would be provided by AEP. Total AEPSC billings to the Registrant Subsidiaries were as follows: Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 56.6 $ 48.2 I&M 35.0 33.5 OPCo 44.5 39.2 PSO 28.5 23.5 SWEPCo 36.7 31.5 The carrying amount and classification of variable interest in AEPSC’s accounts payable are as follows: March 31, 2016 December 31, 2015 Company As Reported on the Balance Sheet Maximum Exposure As Reported on the Balance Sheet Maximum Exposure (in millions) APCo $ 21.1 $ 21.1 $ 25.8 $ 25.8 I&M 11.6 11.6 16.6 16.6 OPCo 14.9 14.9 23.3 23.3 PSO 9.1 9.1 12.6 12.6 SWEPCo 12.6 12.6 16.4 16.4 AEGCo, a wholly-owned subsidiary of Parent, is consolidated by AEP. AEGCo owns a 50% ownership interest in Rockport Plant, Unit 1, leases a 50% interest in Rockport Plant, Unit 2 and owns 100% of the Lawrenceburg Generating Station. AEGCo sells all the output from the Rockport Plant to I&M and KPCo. AEGCo has a Unit Power Agreement associated with the Lawrenceburg Generating Station which was assigned by OPCo to AGR effective January 1, 2014. AEP has agreed to provide AEGCo with the funds necessary to satisfy all of the debt obligations of AEGCo. I&M is considered to have a significant interest in AEGCo due to these transactions. I&M is exposed to losses to the extent it cannot recover the costs of AEGCo through its normal business operations. In the event AEGCo would require financing or other support outside the billings to I&M and KPCo, this financing would be provided by AEP. Total billings to I&M from AEGCo for the three months ended March 31, 2016 and 2015 were $45 million and $55 million , respectively. The carrying amount of I&M’s liabilities associated with AEGCo as of March 31, 2016 and December 31, 2015 was $13 million and $17 million , respectively. Management estimates the maximum exposure of loss to be equal to the amount of such liability. For additional information regarding AEGCo’s lease, see “Rockport Lease” section of Note 13 in the 2015 Annual Report. |
Appalachian Power Co [Member] | |
Variable Interest Entities | VARIABLE INTEREST ENTITIES The disclosures in this note apply to all Registrants unless indicated otherwise. The accounting guidance for “Variable Interest Entities” is a consolidation model that considers if a company has a controlling financial interest in a VIE. A controlling financial interest will have both (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. Entities are required to consolidate a VIE when it is determined that they have a controlling financial interest in a VIE and therefore, are the primary beneficiary of that VIE, as defined by the accounting guidance for “Variable Interest Entities.” In determining whether AEP is the primary beneficiary of a VIE, management considers factors such as equity at risk, the amount of the VIE’s variability AEP absorbs, guarantees of indebtedness, voting rights including kick-out rights, the power to direct the VIE, variable interests held by related parties and other factors. Management believes that significant assumptions and judgments were applied consistently. AEP is the primary beneficiary of Sabine, DCC Fuel, Transition Funding, Ohio Phase-in-Recovery Funding, Appalachian Consumer Rate Relief Funding, AEP Credit, a protected cell of EIS and Transource Energy. In addition, AEP has not provided material financial or other support to any of these entities that was not previously contractually required. AEP holds a significant variable interest in DHLC and Potomac-Appalachian Transmission Highline, LLC West Virginia Series (West Virginia Series). Consolidated Variable Interests Entities Sabine is a mining operator providing mining services to SWEPCo. SWEPCo has no equity investment in Sabine but is Sabine’s only customer. SWEPCo guarantees the debt obligations and lease obligations of Sabine. Under the terms of the note agreements, substantially all assets are pledged and all rights under the lignite mining agreement are assigned to SWEPCo. The creditors of Sabine have no recourse to any AEP entity other than SWEPCo. Under the provisions of the mining agreement, SWEPCo is required to pay, as a part of the cost of lignite delivered, an amount equal to mining costs plus a management fee. In addition, SWEPCo determines how much coal will be mined each year. Based on these facts, management concluded that SWEPCo is the primary beneficiary and is required to consolidate Sabine. SWEPCo’s total billings from Sabine for the three months ended March 31, 2016 and 2015 were $41 million and $42 million , respectively. See the tables below for the classification of Sabine’s assets and liabilities on SWEPCo’s condensed balance sheets. I&M has nuclear fuel lease agreements with DCC Fuel, which was formed for the purpose of acquiring, owning and leasing nuclear fuel to I&M. DCC Fuel purchased the nuclear fuel from I&M with funds received from the issuance of notes to financial institutions. Each DCC Fuel entity is a single-lessee leasing arrangement with only one asset and is capitalized with all debt. Each is a separate legal entity from I&M, the assets of which are not available to satisfy the debts of I&M. Payments on the leases for the three months ended March 31, 2016 and 2015 were $29 million and $23 million , respectively. The leases were recorded as capital leases on I&M’s balance sheet as title to the nuclear fuel transfers to I&M at the end of the respective lease terms, which do not exceed 54 months. Based on I&M’s control of DCC Fuel, management concluded that I&M is the primary beneficiary and is required to consolidate DCC Fuel. The capital leases are eliminated upon consolidation. See the tables below for the classification of DCC Fuel’s assets and liabilities on I&M’s condensed balance sheets. Transition Funding was formed for the sole purpose of issuing and servicing securitization bonds related to Texas Restructuring Legislation. Management has concluded that TCC is the primary beneficiary of Transition Funding because TCC has the power to direct the most significant activities of the VIE and TCC’s equity interest could potentially be significant. Therefore, TCC is required to consolidate Transition Funding. The securitized bonds totaled $1.4 billion and $1.5 billion as of March 31, 2016 and December 31, 2015 , respectively, and are included in Long-term Debt Due Within One Year - Nonaffiliated and Long-term Debt - Nonaffiliated on the condensed balance sheets. Transition Funding has securitized transition assets of $1.3 billion and $1.3 billion as of March 31, 2016 and December 31, 2015 , respectively, which are presented separately on the face of the condensed balance sheets. The securitized transition assets represent the right to impose and collect Texas true-up costs from customers receiving electric transmission or distribution service from TCC under recovery mechanisms approved by the PUCT. The securitization bonds are payable only from and secured by the securitized transition assets. The bondholders have no recourse to TCC or any other AEP entity. TCC acts as the servicer for Transition Funding’s securitized transition assets and remits all related amounts collected from customers to Transition Funding for interest and principal payments on the securitization bonds and related costs. See the tables below for the classification of Transition Funding’s assets and liabilities on the condensed balance sheets. Ohio Phase-in-Recovery Funding was formed for the sole purpose of issuing and servicing securitization bonds related to phase-in recovery property. Management has concluded that OPCo is the primary beneficiary of Ohio Phase-in-Recovery Funding because OPCo has the power to direct the most significant activities of the VIE and OPCo’s equity interest could potentially be significant. Therefore, OPCo is required to consolidate Ohio Phase-in-Recovery Funding. The securitized bonds totaled $163 million and $185 million as of March 31, 2016 and December 31, 2015 , respectively, and are included in Long-term Debt Due Within One Year - Nonaffiliated and Long-term Debt - Nonaffiliated on the condensed balance sheets. Ohio Phase-in-Recovery Funding has securitized assets of $80 million and $86 million as of March 31, 2016 and December 31, 2015 , respectively, which are presented separately on the face of the condensed balance sheets. The phase-in recovery property represents the right to impose and collect Ohio deferred distribution charges from customers receiving electric transmission and distribution service from OPCo under a recovery mechanism approved by the PUCO. In August 2013, securitization bonds were issued. The securitization bonds are payable only from and secured by the securitized assets. The bondholders have no recourse to OPCo or any other AEP entity. OPCo acts as the servicer for Ohio Phase-in-Recovery Funding’s securitized assets and remits all related amounts collected from customers to Ohio Phase-in-Recovery Funding for interest and principal payments on the securitization bonds and related costs. See the tables below for the classification of Ohio Phase-in-Recovery Funding’s assets and liabilities on OPCo’s condensed balance sheets. Appalachian Consumer Rate Relief Funding was formed for the sole purpose of issuing and servicing securitization bonds related to APCo’s under-recovered ENEC deferral balance. Management has concluded that APCo is the primary beneficiary of Appalachian Consumer Rate Relief Funding because APCo has the power to direct the most significant activities of the VIE and APCo’s equity interest could potentially be significant. Therefore, APCo is required to consolidate Appalachian Consumer Rate Relief Funding. The securitized bonds totaled $330 million and $342 million , as of March 31, 2016 and December 31, 2015 , respectively, and are included in Long-term Debt Due Within One Year - Nonaffiliated and Long-term Debt - Nonaffiliated on the condensed balance sheets. Appalachian Consumer Rate Relief Funding has securitized assets of $322 million and $328 million , as of March 31, 2016 and December 31, 2015 , respectively, which are presented separately on the face of the condensed balance sheets. The phase-in recovery property represents the right to impose and collect West Virginia deferred generation charges from customers receiving electric transmission, distribution and generation service from APCo under a recovery mechanism approved by the WVPSC. In November 2013, securitization bonds were issued. The securitization bonds are payable only from and secured by the securitized assets. The bondholders have no recourse to APCo or any other AEP entity. APCo acts as the servicer for Appalachian Consumer Rate Relief Funding’s securitized assets and remits all related amounts collected from customers to Appalachian Consumer Rate Relief Funding for interest and principal payments on the securitization bonds and related costs. See the tables below for the classification of Appalachian Consumer Rate Relief Funding’s assets and liabilities on APCo’s condensed balance sheets. AEP Credit is a wholly-owned subsidiary of Parent. AEP Credit purchases, without recourse, accounts receivable from certain utility subsidiaries of AEP to reduce working capital requirements. AEP provides a minimum of 5% equity and up to 20% of AEP Credit’s short-term borrowing needs in excess of third party financings. Any third party financing of AEP Credit only has recourse to the receivables securitized for such financing. Based on AEP’s control of AEP Credit, management concluded that AEP is the primary beneficiary and is required to consolidate AEP Credit. See the tables below for the classification of AEP Credit’s assets and liabilities on the condensed balance sheets. See “Sale of Receivables - AEP Credit” section of Note 12 . AEP’s subsidiaries participate in one protected cell of EIS for approximately ten lines of insurance. EIS has multiple protected cells. Neither AEP nor its subsidiaries have an equity investment in EIS. The AEP System is essentially this EIS cell’s only participant, but allows certain third parties access to this insurance. AEP’s subsidiaries and any allowed third parties share in the insurance coverage, premiums and risk of loss from claims. Based on AEP’s control and the structure of the protected cell of EIS, management concluded that AEP is the primary beneficiary of the protected cell and are required to consolidate the protected cell of EIS. The insurance premium expense to the protected cell for the three months ended March 31, 2016 and 2015 were $13 million and $14 million , respectively. See the tables below for the classification of the protected cell’s assets and liabilities on the condensed balance sheets. Transource Energy was formed for the purpose of investing in utilities which develop, acquire, construct, own and operate transmission facilities in accordance with FERC-approved rates. AEP has equity and voting ownership of 86.5% with the other owner having 13.5% interest. Management has concluded that Transource Energy is a VIE and that AEP is the primary beneficiary because AEP has the power to direct the most significant activities of the entity and AEP’s equity interest could potentially be significant. Therefore, AEP is required to consolidate Transource Energy. In January 2014, Transource Missouri (a wholly-owned subsidiary of Transource Energy) acquired transmission assets from the non-controlling owner and issued debt and received a capital contribution to fund the acquisition. The majority of Transource Energy’s activity resulted from the asset acquisition, construction projects, debt issuance and capital contribution. AEP has provided capital contributions to Transource Energy of $8 million and $47 million during the three months ended March 31, 2016 and the year ended December 31, 2015 , respectively. AEP and the other owner of Transource Energy are required to ensure a specific equity level in Transource Missouri upon completion of projects or if a project is abandoned by the RTO. See the tables below for the classification of Transource Energy’s assets and liabilities on the condensed balance sheets. The balances below represent the assets and liabilities of the VIEs that are consolidated. These balances include intercompany transactions that are eliminated upon consolidation. AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES VARIABLE INTEREST ENTITIES March 31, 2016 Registrant Subsidiaries Other Consolidated VIEs SWEPCo Sabine I&M DCC Fuel OPCo APCo AEP Credit TCC Transition Funding Protected Cell of EIS Transource Energy (in millions) ASSETS Current Assets $ 59.6 $ 79.6 $ 18.8 $ 10.8 $ 850.4 $ 139.4 $ 172.5 $ 13.6 Net Property, Plant and Equipment 140.4 129.0 — — — — — 253.1 Other Noncurrent Assets 62.8 67.7 150.6 (a) 326.2 (b) 7.6 1,316.8 (c) 2.0 6.3 Total Assets $ 262.8 $ 276.3 $ 169.4 $ 337.0 $ 858.0 $ 1,456.2 $ 174.5 $ 273.0 LIABILITIES AND EQUITY Current Liabilities $ 37.3 $ 73.4 $ 46.2 $ 24.8 $ 781.9 $ 238.0 $ 48.8 $ 44.5 Noncurrent Liabilities 225.1 202.9 121.9 310.9 0.4 1,200.1 81.8 118.7 Equity 0.4 — 1.3 1.3 75.7 18.1 43.9 109.8 Total Liabilities and Equity $ 262.8 $ 276.3 $ 169.4 $ 337.0 $ 858.0 $ 1,456.2 $ 174.5 $ 273.0 (a) Includes an intercompany item eliminated in consolidation of $70.7 million . (b) Includes an intercompany item eliminated in consolidation of $3.9 million . (c) Includes an intercompany item eliminated in consolidation of $66.6 million . AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES VARIABLE INTEREST ENTITIES December 31, 2015 Registrant Subsidiaries Other Consolidated VIEs SWEPCo Sabine I&M DCC Fuel OPCo APCo AEP Credit TCC Transition Funding Protected Cell of EIS Transource Energy (in millions) ASSETS Current Assets $ 61.7 $ 91.1 $ 31.2 $ 18.5 $ 925.7 $ 234.1 $ 165.3 $ 10.8 Net Property, Plant and Equipment 147.0 159.9 — — — — — 227.2 Other Noncurrent Assets 61.8 84.6 162.0 (a) 332.0 (b) 6.4 1,365.7 (c) 1.9 5.5 Total Assets $ 270.5 $ 335.6 $ 193.2 $ 350.5 $ 932.1 $ 1,599.8 $ 167.2 $ 243.5 LIABILITIES AND EQUITY Current Liabilities $ 47.7 $ 84.8 $ 47.3 $ 27.1 $ 855.1 $ 291.7 $ 41.8 $ 36.6 Noncurrent Liabilities 222.3 250.8 144.6 321.5 0.3 1,290.0 83.9 113.0 Equity 0.5 — 1.3 1.9 76.7 18.1 41.5 93.9 Total Liabilities and Equity $ 270.5 $ 335.6 $ 193.2 $ 350.5 $ 932.1 $ 1,599.8 $ 167.2 $ 243.5 (a) Includes an intercompany item eliminated in consolidation of $76.1 million . (b) Includes an intercompany item eliminated in consolidation of $4.0 million . (c) Includes an intercompany item eliminated in consolidation of $68.2 million . Non-Consolidated Significant Variable Interests DHLC is a mining operator which sells 50% of the lignite produced to SWEPCo and 50% to CLECO. SWEPCo and CLECO share the executive board seats and voting rights equally. Each entity guarantees 50% of DHLC’s debt. SWEPCo and CLECO equally approve DHLC’s annual budget. The creditors of DHLC have no recourse to any AEP entity other than SWEPCo. As SWEPCo is the sole equity owner of DHLC, it receives 100% of the management fee. SWEPCo’s total billings from DHLC for the three months ended March 31, 2016 and 2015 were $15 million and $15 million , respectively. SWEPCo is not required to consolidate DHLC as it is not the primary beneficiary, although SWEPCo holds a significant variable interest in DHLC. SWEPCo’s equity investment in DHLC is included in Deferred Charges and Other Noncurrent Assets on SWEPCo’s condensed balance sheets. SWEPCo’s investment in DHLC was: March 31, 2016 December 31, 2015 As Reported on the Balance Sheet Maximum Exposure As Reported on the Balance Sheet Maximum Exposure (in millions) Capital Contribution from SWEPCo $ 7.6 $ 7.6 $ 7.6 $ 7.6 Retained Earnings 8.7 8.7 7.7 7.7 SWEPCo’s Guarantee of Debt — 87.4 — 82.9 Total Investment in DHLC $ 16.3 $ 103.7 $ 15.3 $ 98.2 AEP and FirstEnergy Corp. (FirstEnergy) have a joint venture in Potomac-Appalachian Transmission Highline, LLC (PATH). PATH is a series limited liability company and was created to construct, through its operating companies, a high-voltage transmission line project in the PJM region. PATH consists of the “West Virginia Series (PATH-WV),” owned equally by subsidiaries of FirstEnergy and AEP, and the “Allegheny Series” which is 100% owned by a subsidiary of FirstEnergy. Provisions exist within the PATH-WV agreement that make it a VIE. AEP has no interest or control in the “Allegheny Series”. AEP is not required to consolidate PATH-WV as AEP is not the primary beneficiary, although AEP holds a significant variable interest in PATH-WV. AEP’s equity investment in PATH-WV is included in Deferred Charges and Other Noncurrent Assets on the condensed balance sheets. AEP and FirstEnergy share the returns and losses equally in PATH-WV. AEP’s subsidiaries and FirstEnergy’s subsidiaries provide services to the PATH companies through service agreements. The entities recover costs through regulated rates. In August 2012, the PJM board cancelled the PATH Project, the transmission project that PATH was intended to develop and removed it from the 2012 Regional Transmission Expansion Plan. In September 2012, the PATH Project companies submitted an application to the FERC requesting authority to recover prudently-incurred costs associated with the PATH Project. In November 2012, the FERC issued an order accepting the PATH Project’s abandonment cost recovery application, subject to settlement procedures and hearing. The parties to the case have been unable to reach a settlement agreement and in March 2014, settlement judge procedures were terminated. Hearings at FERC were held in March and April 2015. In April 2015, PATH filed a stipulation agreement with the FERC that agreed to a 50% debt and 50% equity capital structure and a 4.7% cost of long-term debt for the entire amortization period. In September 2015, the Administrative Law Judge who conducted the hearings issued an Initial Decision, which if adopted by the FERC, would deem certain costs not recoverable. The Initial Decision has no binding effect. Additional briefing was submitted during the fourth quarter of 2015. The case is currently pending before FERC. Depending on the outcome of this proceeding, PATH-WV may be required to refund certain amounts that have been collected under its formula rate. Management believes its financial statements adequately address the potential impact of this proceeding. AEP’s investment in PATH-WV was: March 31, 2016 December 31, 2015 As Reported on the Balance Sheet Maximum Exposure As Reported on Maximum Exposure (in millions) Capital Contribution from Parent $ 18.8 $ 18.8 $ 18.8 $ 18.8 Retained Earnings 2.2 2.2 2.2 2.2 Total Investment in PATH-WV $ 21.0 $ 21.0 $ 21.0 $ 21.0 As of March 31, 2016 , AEP’s $21 million investment in PATH-WV was included in Deferred Charges and Other Noncurrent Assets on the condensed balance sheet. If AEP cannot ultimately recover the investment related to PATH-WV, it could reduce future net income and cash flows. AEPSC provides certain managerial and professional services to AEP’s subsidiaries. Parent is the sole equity owner of AEPSC. AEP management controls the activities of AEPSC. The costs of the services are based on a direct charge or on a prorated basis and billed to the AEP subsidiary companies at AEPSC’s cost. AEP subsidiaries have not provided financial or other support outside of the reimbursement of costs for services rendered. AEPSC finances its operations through cost reimbursement from other AEP subsidiaries. There are no other terms or arrangements between AEPSC and any of the AEP subsidiaries that could require additional financial support from an AEP subsidiary or expose them to losses outside of the normal course of business. AEPSC and its billings are subject to regulation by the FERC. AEP subsidiaries are exposed to losses to the extent they cannot recover the costs of AEPSC through their normal business operations. AEP subsidiaries are considered to have a significant interest in AEPSC due to their activity in AEPSC’s cost reimbursement structure. However, AEP subsidiaries do not have control over AEPSC. AEPSC is consolidated by AEP. In the event AEPSC would require financing or other support outside the cost reimbursement billings, this financing would be provided by AEP. Total AEPSC billings to the Registrant Subsidiaries were as follows: Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 56.6 $ 48.2 I&M 35.0 33.5 OPCo 44.5 39.2 PSO 28.5 23.5 SWEPCo 36.7 31.5 The carrying amount and classification of variable interest in AEPSC’s accounts payable are as follows: March 31, 2016 December 31, 2015 Company As Reported on the Balance Sheet Maximum Exposure As Reported on the Balance Sheet Maximum Exposure (in millions) APCo $ 21.1 $ 21.1 $ 25.8 $ 25.8 I&M 11.6 11.6 16.6 16.6 OPCo 14.9 14.9 23.3 23.3 PSO 9.1 9.1 12.6 12.6 SWEPCo 12.6 12.6 16.4 16.4 AEGCo, a wholly-owned subsidiary of Parent, is consolidated by AEP. AEGCo owns a 50% ownership interest in Rockport Plant, Unit 1, leases a 50% interest in Rockport Plant, Unit 2 and owns 100% of the Lawrenceburg Generating Station. AEGCo sells all the output from the Rockport Plant to I&M and KPCo. AEGCo has a Unit Power Agreement associated with the Lawrenceburg Generating Station which was assigned by OPCo to AGR effective January 1, 2014. AEP has agreed to provide AEGCo with the funds necessary to satisfy all of the debt obligations of AEGCo. I&M is considered to have a significant interest in AEGCo due to these transactions. I&M is exposed to losses to the extent it cannot recover the costs of AEGCo through its normal business operations. In the event AEGCo would require financing or other support outside the billings to I&M and KPCo, this financing would be provided by AEP. Total billings to I&M from AEGCo for the three months ended March 31, 2016 and 2015 were $45 million and $55 million , respectively. The carrying amount of I&M’s liabilities associated with AEGCo as of March 31, 2016 and December 31, 2015 was $13 million and $17 million , respectively. Management estimates the maximum exposure of loss to be equal to the amount of such liability. For additional information regarding AEGCo’s lease, see “Rockport Lease” section of Note 13 in the 2015 Annual Report. |
Indiana Michigan Power Co [Member] | |
Variable Interest Entities | VARIABLE INTEREST ENTITIES The disclosures in this note apply to all Registrants unless indicated otherwise. The accounting guidance for “Variable Interest Entities” is a consolidation model that considers if a company has a controlling financial interest in a VIE. A controlling financial interest will have both (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. Entities are required to consolidate a VIE when it is determined that they have a controlling financial interest in a VIE and therefore, are the primary beneficiary of that VIE, as defined by the accounting guidance for “Variable Interest Entities.” In determining whether AEP is the primary beneficiary of a VIE, management considers factors such as equity at risk, the amount of the VIE’s variability AEP absorbs, guarantees of indebtedness, voting rights including kick-out rights, the power to direct the VIE, variable interests held by related parties and other factors. Management believes that significant assumptions and judgments were applied consistently. AEP is the primary beneficiary of Sabine, DCC Fuel, Transition Funding, Ohio Phase-in-Recovery Funding, Appalachian Consumer Rate Relief Funding, AEP Credit, a protected cell of EIS and Transource Energy. In addition, AEP has not provided material financial or other support to any of these entities that was not previously contractually required. AEP holds a significant variable interest in DHLC and Potomac-Appalachian Transmission Highline, LLC West Virginia Series (West Virginia Series). Consolidated Variable Interests Entities Sabine is a mining operator providing mining services to SWEPCo. SWEPCo has no equity investment in Sabine but is Sabine’s only customer. SWEPCo guarantees the debt obligations and lease obligations of Sabine. Under the terms of the note agreements, substantially all assets are pledged and all rights under the lignite mining agreement are assigned to SWEPCo. The creditors of Sabine have no recourse to any AEP entity other than SWEPCo. Under the provisions of the mining agreement, SWEPCo is required to pay, as a part of the cost of lignite delivered, an amount equal to mining costs plus a management fee. In addition, SWEPCo determines how much coal will be mined each year. Based on these facts, management concluded that SWEPCo is the primary beneficiary and is required to consolidate Sabine. SWEPCo’s total billings from Sabine for the three months ended March 31, 2016 and 2015 were $41 million and $42 million , respectively. See the tables below for the classification of Sabine’s assets and liabilities on SWEPCo’s condensed balance sheets. I&M has nuclear fuel lease agreements with DCC Fuel, which was formed for the purpose of acquiring, owning and leasing nuclear fuel to I&M. DCC Fuel purchased the nuclear fuel from I&M with funds received from the issuance of notes to financial institutions. Each DCC Fuel entity is a single-lessee leasing arrangement with only one asset and is capitalized with all debt. Each is a separate legal entity from I&M, the assets of which are not available to satisfy the debts of I&M. Payments on the leases for the three months ended March 31, 2016 and 2015 were $29 million and $23 million , respectively. The leases were recorded as capital leases on I&M’s balance sheet as title to the nuclear fuel transfers to I&M at the end of the respective lease terms, which do not exceed 54 months. Based on I&M’s control of DCC Fuel, management concluded that I&M is the primary beneficiary and is required to consolidate DCC Fuel. The capital leases are eliminated upon consolidation. See the tables below for the classification of DCC Fuel’s assets and liabilities on I&M’s condensed balance sheets. Transition Funding was formed for the sole purpose of issuing and servicing securitization bonds related to Texas Restructuring Legislation. Management has concluded that TCC is the primary beneficiary of Transition Funding because TCC has the power to direct the most significant activities of the VIE and TCC’s equity interest could potentially be significant. Therefore, TCC is required to consolidate Transition Funding. The securitized bonds totaled $1.4 billion and $1.5 billion as of March 31, 2016 and December 31, 2015 , respectively, and are included in Long-term Debt Due Within One Year - Nonaffiliated and Long-term Debt - Nonaffiliated on the condensed balance sheets. Transition Funding has securitized transition assets of $1.3 billion and $1.3 billion as of March 31, 2016 and December 31, 2015 , respectively, which are presented separately on the face of the condensed balance sheets. The securitized transition assets represent the right to impose and collect Texas true-up costs from customers receiving electric transmission or distribution service from TCC under recovery mechanisms approved by the PUCT. The securitization bonds are payable only from and secured by the securitized transition assets. The bondholders have no recourse to TCC or any other AEP entity. TCC acts as the servicer for Transition Funding’s securitized transition assets and remits all related amounts collected from customers to Transition Funding for interest and principal payments on the securitization bonds and related costs. See the tables below for the classification of Transition Funding’s assets and liabilities on the condensed balance sheets. Ohio Phase-in-Recovery Funding was formed for the sole purpose of issuing and servicing securitization bonds related to phase-in recovery property. Management has concluded that OPCo is the primary beneficiary of Ohio Phase-in-Recovery Funding because OPCo has the power to direct the most significant activities of the VIE and OPCo’s equity interest could potentially be significant. Therefore, OPCo is required to consolidate Ohio Phase-in-Recovery Funding. The securitized bonds totaled $163 million and $185 million as of March 31, 2016 and December 31, 2015 , respectively, and are included in Long-term Debt Due Within One Year - Nonaffiliated and Long-term Debt - Nonaffiliated on the condensed balance sheets. Ohio Phase-in-Recovery Funding has securitized assets of $80 million and $86 million as of March 31, 2016 and December 31, 2015 , respectively, which are presented separately on the face of the condensed balance sheets. The phase-in recovery property represents the right to impose and collect Ohio deferred distribution charges from customers receiving electric transmission and distribution service from OPCo under a recovery mechanism approved by the PUCO. In August 2013, securitization bonds were issued. The securitization bonds are payable only from and secured by the securitized assets. The bondholders have no recourse to OPCo or any other AEP entity. OPCo acts as the servicer for Ohio Phase-in-Recovery Funding’s securitized assets and remits all related amounts collected from customers to Ohio Phase-in-Recovery Funding for interest and principal payments on the securitization bonds and related costs. See the tables below for the classification of Ohio Phase-in-Recovery Funding’s assets and liabilities on OPCo’s condensed balance sheets. Appalachian Consumer Rate Relief Funding was formed for the sole purpose of issuing and servicing securitization bonds related to APCo’s under-recovered ENEC deferral balance. Management has concluded that APCo is the primary beneficiary of Appalachian Consumer Rate Relief Funding because APCo has the power to direct the most significant activities of the VIE and APCo’s equity interest could potentially be significant. Therefore, APCo is required to consolidate Appalachian Consumer Rate Relief Funding. The securitized bonds totaled $330 million and $342 million , as of March 31, 2016 and December 31, 2015 , respectively, and are included in Long-term Debt Due Within One Year - Nonaffiliated and Long-term Debt - Nonaffiliated on the condensed balance sheets. Appalachian Consumer Rate Relief Funding has securitized assets of $322 million and $328 million , as of March 31, 2016 and December 31, 2015 , respectively, which are presented separately on the face of the condensed balance sheets. The phase-in recovery property represents the right to impose and collect West Virginia deferred generation charges from customers receiving electric transmission, distribution and generation service from APCo under a recovery mechanism approved by the WVPSC. In November 2013, securitization bonds were issued. The securitization bonds are payable only from and secured by the securitized assets. The bondholders have no recourse to APCo or any other AEP entity. APCo acts as the servicer for Appalachian Consumer Rate Relief Funding’s securitized assets and remits all related amounts collected from customers to Appalachian Consumer Rate Relief Funding for interest and principal payments on the securitization bonds and related costs. See the tables below for the classification of Appalachian Consumer Rate Relief Funding’s assets and liabilities on APCo’s condensed balance sheets. AEP Credit is a wholly-owned subsidiary of Parent. AEP Credit purchases, without recourse, accounts receivable from certain utility subsidiaries of AEP to reduce working capital requirements. AEP provides a minimum of 5% equity and up to 20% of AEP Credit’s short-term borrowing needs in excess of third party financings. Any third party financing of AEP Credit only has recourse to the receivables securitized for such financing. Based on AEP’s control of AEP Credit, management concluded that AEP is the primary beneficiary and is required to consolidate AEP Credit. See the tables below for the classification of AEP Credit’s assets and liabilities on the condensed balance sheets. See “Sale of Receivables - AEP Credit” section of Note 12 . AEP’s subsidiaries participate in one protected cell of EIS for approximately ten lines of insurance. EIS has multiple protected cells. Neither AEP nor its subsidiaries have an equity investment in EIS. The AEP System is essentially this EIS cell’s only participant, but allows certain third parties access to this insurance. AEP’s subsidiaries and any allowed third parties share in the insurance coverage, premiums and risk of loss from claims. Based on AEP’s control and the structure of the protected cell of EIS, management concluded that AEP is the primary beneficiary of the protected cell and are required to consolidate the protected cell of EIS. The insurance premium expense to the protected cell for the three months ended March 31, 2016 and 2015 were $13 million and $14 million , respectively. See the tables below for the classification of the protected cell’s assets and liabilities on the condensed balance sheets. Transource Energy was formed for the purpose of investing in utilities which develop, acquire, construct, own and operate transmission facilities in accordance with FERC-approved rates. AEP has equity and voting ownership of 86.5% with the other owner having 13.5% interest. Management has concluded that Transource Energy is a VIE and that AEP is the primary beneficiary because AEP has the power to direct the most significant activities of the entity and AEP’s equity interest could potentially be significant. Therefore, AEP is required to consolidate Transource Energy. In January 2014, Transource Missouri (a wholly-owned subsidiary of Transource Energy) acquired transmission assets from the non-controlling owner and issued debt and received a capital contribution to fund the acquisition. The majority of Transource Energy’s activity resulted from the asset acquisition, construction projects, debt issuance and capital contribution. AEP has provided capital contributions to Transource Energy of $8 million and $47 million during the three months ended March 31, 2016 and the year ended December 31, 2015 , respectively. AEP and the other owner of Transource Energy are required to ensure a specific equity level in Transource Missouri upon completion of projects or if a project is abandoned by the RTO. See the tables below for the classification of Transource Energy’s assets and liabilities on the condensed balance sheets. The balances below represent the assets and liabilities of the VIEs that are consolidated. These balances include intercompany transactions that are eliminated upon consolidation. AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES VARIABLE INTEREST ENTITIES March 31, 2016 Registrant Subsidiaries Other Consolidated VIEs SWEPCo Sabine I&M DCC Fuel OPCo APCo AEP Credit TCC Transition Funding Protected Cell of EIS Transource Energy (in millions) ASSETS Current Assets $ 59.6 $ 79.6 $ 18.8 $ 10.8 $ 850.4 $ 139.4 $ 172.5 $ 13.6 Net Property, Plant and Equipment 140.4 129.0 — — — — — 253.1 Other Noncurrent Assets 62.8 67.7 150.6 (a) 326.2 (b) 7.6 1,316.8 (c) 2.0 6.3 Total Assets $ 262.8 $ 276.3 $ 169.4 $ 337.0 $ 858.0 $ 1,456.2 $ 174.5 $ 273.0 LIABILITIES AND EQUITY Current Liabilities $ 37.3 $ 73.4 $ 46.2 $ 24.8 $ 781.9 $ 238.0 $ 48.8 $ 44.5 Noncurrent Liabilities 225.1 202.9 121.9 310.9 0.4 1,200.1 81.8 118.7 Equity 0.4 — 1.3 1.3 75.7 18.1 43.9 109.8 Total Liabilities and Equity $ 262.8 $ 276.3 $ 169.4 $ 337.0 $ 858.0 $ 1,456.2 $ 174.5 $ 273.0 (a) Includes an intercompany item eliminated in consolidation of $70.7 million . (b) Includes an intercompany item eliminated in consolidation of $3.9 million . (c) Includes an intercompany item eliminated in consolidation of $66.6 million . AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES VARIABLE INTEREST ENTITIES December 31, 2015 Registrant Subsidiaries Other Consolidated VIEs SWEPCo Sabine I&M DCC Fuel OPCo APCo AEP Credit TCC Transition Funding Protected Cell of EIS Transource Energy (in millions) ASSETS Current Assets $ 61.7 $ 91.1 $ 31.2 $ 18.5 $ 925.7 $ 234.1 $ 165.3 $ 10.8 Net Property, Plant and Equipment 147.0 159.9 — — — — — 227.2 Other Noncurrent Assets 61.8 84.6 162.0 (a) 332.0 (b) 6.4 1,365.7 (c) 1.9 5.5 Total Assets $ 270.5 $ 335.6 $ 193.2 $ 350.5 $ 932.1 $ 1,599.8 $ 167.2 $ 243.5 LIABILITIES AND EQUITY Current Liabilities $ 47.7 $ 84.8 $ 47.3 $ 27.1 $ 855.1 $ 291.7 $ 41.8 $ 36.6 Noncurrent Liabilities 222.3 250.8 144.6 321.5 0.3 1,290.0 83.9 113.0 Equity 0.5 — 1.3 1.9 76.7 18.1 41.5 93.9 Total Liabilities and Equity $ 270.5 $ 335.6 $ 193.2 $ 350.5 $ 932.1 $ 1,599.8 $ 167.2 $ 243.5 (a) Includes an intercompany item eliminated in consolidation of $76.1 million . (b) Includes an intercompany item eliminated in consolidation of $4.0 million . (c) Includes an intercompany item eliminated in consolidation of $68.2 million . Non-Consolidated Significant Variable Interests DHLC is a mining operator which sells 50% of the lignite produced to SWEPCo and 50% to CLECO. SWEPCo and CLECO share the executive board seats and voting rights equally. Each entity guarantees 50% of DHLC’s debt. SWEPCo and CLECO equally approve DHLC’s annual budget. The creditors of DHLC have no recourse to any AEP entity other than SWEPCo. As SWEPCo is the sole equity owner of DHLC, it receives 100% of the management fee. SWEPCo’s total billings from DHLC for the three months ended March 31, 2016 and 2015 were $15 million and $15 million , respectively. SWEPCo is not required to consolidate DHLC as it is not the primary beneficiary, although SWEPCo holds a significant variable interest in DHLC. SWEPCo’s equity investment in DHLC is included in Deferred Charges and Other Noncurrent Assets on SWEPCo’s condensed balance sheets. SWEPCo’s investment in DHLC was: March 31, 2016 December 31, 2015 As Reported on the Balance Sheet Maximum Exposure As Reported on the Balance Sheet Maximum Exposure (in millions) Capital Contribution from SWEPCo $ 7.6 $ 7.6 $ 7.6 $ 7.6 Retained Earnings 8.7 8.7 7.7 7.7 SWEPCo’s Guarantee of Debt — 87.4 — 82.9 Total Investment in DHLC $ 16.3 $ 103.7 $ 15.3 $ 98.2 AEP and FirstEnergy Corp. (FirstEnergy) have a joint venture in Potomac-Appalachian Transmission Highline, LLC (PATH). PATH is a series limited liability company and was created to construct, through its operating companies, a high-voltage transmission line project in the PJM region. PATH consists of the “West Virginia Series (PATH-WV),” owned equally by subsidiaries of FirstEnergy and AEP, and the “Allegheny Series” which is 100% owned by a subsidiary of FirstEnergy. Provisions exist within the PATH-WV agreement that make it a VIE. AEP has no interest or control in the “Allegheny Series”. AEP is not required to consolidate PATH-WV as AEP is not the primary beneficiary, although AEP holds a significant variable interest in PATH-WV. AEP’s equity investment in PATH-WV is included in Deferred Charges and Other Noncurrent Assets on the condensed balance sheets. AEP and FirstEnergy share the returns and losses equally in PATH-WV. AEP’s subsidiaries and FirstEnergy’s subsidiaries provide services to the PATH companies through service agreements. The entities recover costs through regulated rates. In August 2012, the PJM board cancelled the PATH Project, the transmission project that PATH was intended to develop and removed it from the 2012 Regional Transmission Expansion Plan. In September 2012, the PATH Project companies submitted an application to the FERC requesting authority to recover prudently-incurred costs associated with the PATH Project. In November 2012, the FERC issued an order accepting the PATH Project’s abandonment cost recovery application, subject to settlement procedures and hearing. The parties to the case have been unable to reach a settlement agreement and in March 2014, settlement judge procedures were terminated. Hearings at FERC were held in March and April 2015. In April 2015, PATH filed a stipulation agreement with the FERC that agreed to a 50% debt and 50% equity capital structure and a 4.7% cost of long-term debt for the entire amortization period. In September 2015, the Administrative Law Judge who conducted the hearings issued an Initial Decision, which if adopted by the FERC, would deem certain costs not recoverable. The Initial Decision has no binding effect. Additional briefing was submitted during the fourth quarter of 2015. The case is currently pending before FERC. Depending on the outcome of this proceeding, PATH-WV may be required to refund certain amounts that have been collected under its formula rate. Management believes its financial statements adequately address the potential impact of this proceeding. AEP’s investment in PATH-WV was: March 31, 2016 December 31, 2015 As Reported on the Balance Sheet Maximum Exposure As Reported on Maximum Exposure (in millions) Capital Contribution from Parent $ 18.8 $ 18.8 $ 18.8 $ 18.8 Retained Earnings 2.2 2.2 2.2 2.2 Total Investment in PATH-WV $ 21.0 $ 21.0 $ 21.0 $ 21.0 As of March 31, 2016 , AEP’s $21 million investment in PATH-WV was included in Deferred Charges and Other Noncurrent Assets on the condensed balance sheet. If AEP cannot ultimately recover the investment related to PATH-WV, it could reduce future net income and cash flows. AEPSC provides certain managerial and professional services to AEP’s subsidiaries. Parent is the sole equity owner of AEPSC. AEP management controls the activities of AEPSC. The costs of the services are based on a direct charge or on a prorated basis and billed to the AEP subsidiary companies at AEPSC’s cost. AEP subsidiaries have not provided financial or other support outside of the reimbursement of costs for services rendered. AEPSC finances its operations through cost reimbursement from other AEP subsidiaries. There are no other terms or arrangements between AEPSC and any of the AEP subsidiaries that could require additional financial support from an AEP subsidiary or expose them to losses outside of the normal course of business. AEPSC and its billings are subject to regulation by the FERC. AEP subsidiaries are exposed to losses to the extent they cannot recover the costs of AEPSC through their normal business operations. AEP subsidiaries are considered to have a significant interest in AEPSC due to their activity in AEPSC’s cost reimbursement structure. However, AEP subsidiaries do not have control over AEPSC. AEPSC is consolidated by AEP. In the event AEPSC would require financing or other support outside the cost reimbursement billings, this financing would be provided by AEP. Total AEPSC billings to the Registrant Subsidiaries were as follows: Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 56.6 $ 48.2 I&M 35.0 33.5 OPCo 44.5 39.2 PSO 28.5 23.5 SWEPCo 36.7 31.5 The carrying amount and classification of variable interest in AEPSC’s accounts payable are as follows: March 31, 2016 December 31, 2015 Company As Reported on the Balance Sheet Maximum Exposure As Reported on the Balance Sheet Maximum Exposure (in millions) APCo $ 21.1 $ 21.1 $ 25.8 $ 25.8 I&M 11.6 11.6 16.6 16.6 OPCo 14.9 14.9 23.3 23.3 PSO 9.1 9.1 12.6 12.6 SWEPCo 12.6 12.6 16.4 16.4 AEGCo, a wholly-owned subsidiary of Parent, is consolidated by AEP. AEGCo owns a 50% ownership interest in Rockport Plant, Unit 1, leases a 50% interest in Rockport Plant, Unit 2 and owns 100% of the Lawrenceburg Generating Station. AEGCo sells all the output from the Rockport Plant to I&M and KPCo. AEGCo has a Unit Power Agreement associated with the Lawrenceburg Generating Station which was assigned by OPCo to AGR effective January 1, 2014. AEP has agreed to provide AEGCo with the funds necessary to satisfy all of the debt obligations of AEGCo. I&M is considered to have a significant interest in AEGCo due to these transactions. I&M is exposed to losses to the extent it cannot recover the costs of AEGCo through its normal business operations. In the event AEGCo would require financing or other support outside the billings to I&M and KPCo, this financing would be provided by AEP. Total billings to I&M from AEGCo for the three months ended March 31, 2016 and 2015 were $45 million and $55 million , respectively. The carrying amount of I&M’s liabilities associated with AEGCo as of March 31, 2016 and December 31, 2015 was $13 million and $17 million , respectively. Management estimates the maximum exposure of loss to be equal to the amount of such liability. For additional information regarding AEGCo’s lease, see “Rockport Lease” section of Note 13 in the 2015 Annual Report. |
Ohio Power Co [Member] | |
Variable Interest Entities | VARIABLE INTEREST ENTITIES The disclosures in this note apply to all Registrants unless indicated otherwise. The accounting guidance for “Variable Interest Entities” is a consolidation model that considers if a company has a controlling financial interest in a VIE. A controlling financial interest will have both (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. Entities are required to consolidate a VIE when it is determined that they have a controlling financial interest in a VIE and therefore, are the primary beneficiary of that VIE, as defined by the accounting guidance for “Variable Interest Entities.” In determining whether AEP is the primary beneficiary of a VIE, management considers factors such as equity at risk, the amount of the VIE’s variability AEP absorbs, guarantees of indebtedness, voting rights including kick-out rights, the power to direct the VIE, variable interests held by related parties and other factors. Management believes that significant assumptions and judgments were applied consistently. AEP is the primary beneficiary of Sabine, DCC Fuel, Transition Funding, Ohio Phase-in-Recovery Funding, Appalachian Consumer Rate Relief Funding, AEP Credit, a protected cell of EIS and Transource Energy. In addition, AEP has not provided material financial or other support to any of these entities that was not previously contractually required. AEP holds a significant variable interest in DHLC and Potomac-Appalachian Transmission Highline, LLC West Virginia Series (West Virginia Series). Consolidated Variable Interests Entities Sabine is a mining operator providing mining services to SWEPCo. SWEPCo has no equity investment in Sabine but is Sabine’s only customer. SWEPCo guarantees the debt obligations and lease obligations of Sabine. Under the terms of the note agreements, substantially all assets are pledged and all rights under the lignite mining agreement are assigned to SWEPCo. The creditors of Sabine have no recourse to any AEP entity other than SWEPCo. Under the provisions of the mining agreement, SWEPCo is required to pay, as a part of the cost of lignite delivered, an amount equal to mining costs plus a management fee. In addition, SWEPCo determines how much coal will be mined each year. Based on these facts, management concluded that SWEPCo is the primary beneficiary and is required to consolidate Sabine. SWEPCo’s total billings from Sabine for the three months ended March 31, 2016 and 2015 were $41 million and $42 million , respectively. See the tables below for the classification of Sabine’s assets and liabilities on SWEPCo’s condensed balance sheets. I&M has nuclear fuel lease agreements with DCC Fuel, which was formed for the purpose of acquiring, owning and leasing nuclear fuel to I&M. DCC Fuel purchased the nuclear fuel from I&M with funds received from the issuance of notes to financial institutions. Each DCC Fuel entity is a single-lessee leasing arrangement with only one asset and is capitalized with all debt. Each is a separate legal entity from I&M, the assets of which are not available to satisfy the debts of I&M. Payments on the leases for the three months ended March 31, 2016 and 2015 were $29 million and $23 million , respectively. The leases were recorded as capital leases on I&M’s balance sheet as title to the nuclear fuel transfers to I&M at the end of the respective lease terms, which do not exceed 54 months. Based on I&M’s control of DCC Fuel, management concluded that I&M is the primary beneficiary and is required to consolidate DCC Fuel. The capital leases are eliminated upon consolidation. See the tables below for the classification of DCC Fuel’s assets and liabilities on I&M’s condensed balance sheets. Transition Funding was formed for the sole purpose of issuing and servicing securitization bonds related to Texas Restructuring Legislation. Management has concluded that TCC is the primary beneficiary of Transition Funding because TCC has the power to direct the most significant activities of the VIE and TCC’s equity interest could potentially be significant. Therefore, TCC is required to consolidate Transition Funding. The securitized bonds totaled $1.4 billion and $1.5 billion as of March 31, 2016 and December 31, 2015 , respectively, and are included in Long-term Debt Due Within One Year - Nonaffiliated and Long-term Debt - Nonaffiliated on the condensed balance sheets. Transition Funding has securitized transition assets of $1.3 billion and $1.3 billion as of March 31, 2016 and December 31, 2015 , respectively, which are presented separately on the face of the condensed balance sheets. The securitized transition assets represent the right to impose and collect Texas true-up costs from customers receiving electric transmission or distribution service from TCC under recovery mechanisms approved by the PUCT. The securitization bonds are payable only from and secured by the securitized transition assets. The bondholders have no recourse to TCC or any other AEP entity. TCC acts as the servicer for Transition Funding’s securitized transition assets and remits all related amounts collected from customers to Transition Funding for interest and principal payments on the securitization bonds and related costs. See the tables below for the classification of Transition Funding’s assets and liabilities on the condensed balance sheets. Ohio Phase-in-Recovery Funding was formed for the sole purpose of issuing and servicing securitization bonds related to phase-in recovery property. Management has concluded that OPCo is the primary beneficiary of Ohio Phase-in-Recovery Funding because OPCo has the power to direct the most significant activities of the VIE and OPCo’s equity interest could potentially be significant. Therefore, OPCo is required to consolidate Ohio Phase-in-Recovery Funding. The securitized bonds totaled $163 million and $185 million as of March 31, 2016 and December 31, 2015 , respectively, and are included in Long-term Debt Due Within One Year - Nonaffiliated and Long-term Debt - Nonaffiliated on the condensed balance sheets. Ohio Phase-in-Recovery Funding has securitized assets of $80 million and $86 million as of March 31, 2016 and December 31, 2015 , respectively, which are presented separately on the face of the condensed balance sheets. The phase-in recovery property represents the right to impose and collect Ohio deferred distribution charges from customers receiving electric transmission and distribution service from OPCo under a recovery mechanism approved by the PUCO. In August 2013, securitization bonds were issued. The securitization bonds are payable only from and secured by the securitized assets. The bondholders have no recourse to OPCo or any other AEP entity. OPCo acts as the servicer for Ohio Phase-in-Recovery Funding’s securitized assets and remits all related amounts collected from customers to Ohio Phase-in-Recovery Funding for interest and principal payments on the securitization bonds and related costs. See the tables below for the classification of Ohio Phase-in-Recovery Funding’s assets and liabilities on OPCo’s condensed balance sheets. Appalachian Consumer Rate Relief Funding was formed for the sole purpose of issuing and servicing securitization bonds related to APCo’s under-recovered ENEC deferral balance. Management has concluded that APCo is the primary beneficiary of Appalachian Consumer Rate Relief Funding because APCo has the power to direct the most significant activities of the VIE and APCo’s equity interest could potentially be significant. Therefore, APCo is required to consolidate Appalachian Consumer Rate Relief Funding. The securitized bonds totaled $330 million and $342 million , as of March 31, 2016 and December 31, 2015 , respectively, and are included in Long-term Debt Due Within One Year - Nonaffiliated and Long-term Debt - Nonaffiliated on the condensed balance sheets. Appalachian Consumer Rate Relief Funding has securitized assets of $322 million and $328 million , as of March 31, 2016 and December 31, 2015 , respectively, which are presented separately on the face of the condensed balance sheets. The phase-in recovery property represents the right to impose and collect West Virginia deferred generation charges from customers receiving electric transmission, distribution and generation service from APCo under a recovery mechanism approved by the WVPSC. In November 2013, securitization bonds were issued. The securitization bonds are payable only from and secured by the securitized assets. The bondholders have no recourse to APCo or any other AEP entity. APCo acts as the servicer for Appalachian Consumer Rate Relief Funding’s securitized assets and remits all related amounts collected from customers to Appalachian Consumer Rate Relief Funding for interest and principal payments on the securitization bonds and related costs. See the tables below for the classification of Appalachian Consumer Rate Relief Funding’s assets and liabilities on APCo’s condensed balance sheets. AEP Credit is a wholly-owned subsidiary of Parent. AEP Credit purchases, without recourse, accounts receivable from certain utility subsidiaries of AEP to reduce working capital requirements. AEP provides a minimum of 5% equity and up to 20% of AEP Credit’s short-term borrowing needs in excess of third party financings. Any third party financing of AEP Credit only has recourse to the receivables securitized for such financing. Based on AEP’s control of AEP Credit, management concluded that AEP is the primary beneficiary and is required to consolidate AEP Credit. See the tables below for the classification of AEP Credit’s assets and liabilities on the condensed balance sheets. See “Sale of Receivables - AEP Credit” section of Note 12 . AEP’s subsidiaries participate in one protected cell of EIS for approximately ten lines of insurance. EIS has multiple protected cells. Neither AEP nor its subsidiaries have an equity investment in EIS. The AEP System is essentially this EIS cell’s only participant, but allows certain third parties access to this insurance. AEP’s subsidiaries and any allowed third parties share in the insurance coverage, premiums and risk of loss from claims. Based on AEP’s control and the structure of the protected cell of EIS, management concluded that AEP is the primary beneficiary of the protected cell and are required to consolidate the protected cell of EIS. The insurance premium expense to the protected cell for the three months ended March 31, 2016 and 2015 were $13 million and $14 million , respectively. See the tables below for the classification of the protected cell’s assets and liabilities on the condensed balance sheets. Transource Energy was formed for the purpose of investing in utilities which develop, acquire, construct, own and operate transmission facilities in accordance with FERC-approved rates. AEP has equity and voting ownership of 86.5% with the other owner having 13.5% interest. Management has concluded that Transource Energy is a VIE and that AEP is the primary beneficiary because AEP has the power to direct the most significant activities of the entity and AEP’s equity interest could potentially be significant. Therefore, AEP is required to consolidate Transource Energy. In January 2014, Transource Missouri (a wholly-owned subsidiary of Transource Energy) acquired transmission assets from the non-controlling owner and issued debt and received a capital contribution to fund the acquisition. The majority of Transource Energy’s activity resulted from the asset acquisition, construction projects, debt issuance and capital contribution. AEP has provided capital contributions to Transource Energy of $8 million and $47 million during the three months ended March 31, 2016 and the year ended December 31, 2015 , respectively. AEP and the other owner of Transource Energy are required to ensure a specific equity level in Transource Missouri upon completion of projects or if a project is abandoned by the RTO. See the tables below for the classification of Transource Energy’s assets and liabilities on the condensed balance sheets. The balances below represent the assets and liabilities of the VIEs that are consolidated. These balances include intercompany transactions that are eliminated upon consolidation. AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES VARIABLE INTEREST ENTITIES March 31, 2016 Registrant Subsidiaries Other Consolidated VIEs SWEPCo Sabine I&M DCC Fuel OPCo APCo AEP Credit TCC Transition Funding Protected Cell of EIS Transource Energy (in millions) ASSETS Current Assets $ 59.6 $ 79.6 $ 18.8 $ 10.8 $ 850.4 $ 139.4 $ 172.5 $ 13.6 Net Property, Plant and Equipment 140.4 129.0 — — — — — 253.1 Other Noncurrent Assets 62.8 67.7 150.6 (a) 326.2 (b) 7.6 1,316.8 (c) 2.0 6.3 Total Assets $ 262.8 $ 276.3 $ 169.4 $ 337.0 $ 858.0 $ 1,456.2 $ 174.5 $ 273.0 LIABILITIES AND EQUITY Current Liabilities $ 37.3 $ 73.4 $ 46.2 $ 24.8 $ 781.9 $ 238.0 $ 48.8 $ 44.5 Noncurrent Liabilities 225.1 202.9 121.9 310.9 0.4 1,200.1 81.8 118.7 Equity 0.4 — 1.3 1.3 75.7 18.1 43.9 109.8 Total Liabilities and Equity $ 262.8 $ 276.3 $ 169.4 $ 337.0 $ 858.0 $ 1,456.2 $ 174.5 $ 273.0 (a) Includes an intercompany item eliminated in consolidation of $70.7 million . (b) Includes an intercompany item eliminated in consolidation of $3.9 million . (c) Includes an intercompany item eliminated in consolidation of $66.6 million . AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES VARIABLE INTEREST ENTITIES December 31, 2015 Registrant Subsidiaries Other Consolidated VIEs SWEPCo Sabine I&M DCC Fuel OPCo APCo AEP Credit TCC Transition Funding Protected Cell of EIS Transource Energy (in millions) ASSETS Current Assets $ 61.7 $ 91.1 $ 31.2 $ 18.5 $ 925.7 $ 234.1 $ 165.3 $ 10.8 Net Property, Plant and Equipment 147.0 159.9 — — — — — 227.2 Other Noncurrent Assets 61.8 84.6 162.0 (a) 332.0 (b) 6.4 1,365.7 (c) 1.9 5.5 Total Assets $ 270.5 $ 335.6 $ 193.2 $ 350.5 $ 932.1 $ 1,599.8 $ 167.2 $ 243.5 LIABILITIES AND EQUITY Current Liabilities $ 47.7 $ 84.8 $ 47.3 $ 27.1 $ 855.1 $ 291.7 $ 41.8 $ 36.6 Noncurrent Liabilities 222.3 250.8 144.6 321.5 0.3 1,290.0 83.9 113.0 Equity 0.5 — 1.3 1.9 76.7 18.1 41.5 93.9 Total Liabilities and Equity $ 270.5 $ 335.6 $ 193.2 $ 350.5 $ 932.1 $ 1,599.8 $ 167.2 $ 243.5 (a) Includes an intercompany item eliminated in consolidation of $76.1 million . (b) Includes an intercompany item eliminated in consolidation of $4.0 million . (c) Includes an intercompany item eliminated in consolidation of $68.2 million . Non-Consolidated Significant Variable Interests DHLC is a mining operator which sells 50% of the lignite produced to SWEPCo and 50% to CLECO. SWEPCo and CLECO share the executive board seats and voting rights equally. Each entity guarantees 50% of DHLC’s debt. SWEPCo and CLECO equally approve DHLC’s annual budget. The creditors of DHLC have no recourse to any AEP entity other than SWEPCo. As SWEPCo is the sole equity owner of DHLC, it receives 100% of the management fee. SWEPCo’s total billings from DHLC for the three months ended March 31, 2016 and 2015 were $15 million and $15 million , respectively. SWEPCo is not required to consolidate DHLC as it is not the primary beneficiary, although SWEPCo holds a significant variable interest in DHLC. SWEPCo’s equity investment in DHLC is included in Deferred Charges and Other Noncurrent Assets on SWEPCo’s condensed balance sheets. SWEPCo’s investment in DHLC was: March 31, 2016 December 31, 2015 As Reported on the Balance Sheet Maximum Exposure As Reported on the Balance Sheet Maximum Exposure (in millions) Capital Contribution from SWEPCo $ 7.6 $ 7.6 $ 7.6 $ 7.6 Retained Earnings 8.7 8.7 7.7 7.7 SWEPCo’s Guarantee of Debt — 87.4 — 82.9 Total Investment in DHLC $ 16.3 $ 103.7 $ 15.3 $ 98.2 AEP and FirstEnergy Corp. (FirstEnergy) have a joint venture in Potomac-Appalachian Transmission Highline, LLC (PATH). PATH is a series limited liability company and was created to construct, through its operating companies, a high-voltage transmission line project in the PJM region. PATH consists of the “West Virginia Series (PATH-WV),” owned equally by subsidiaries of FirstEnergy and AEP, and the “Allegheny Series” which is 100% owned by a subsidiary of FirstEnergy. Provisions exist within the PATH-WV agreement that make it a VIE. AEP has no interest or control in the “Allegheny Series”. AEP is not required to consolidate PATH-WV as AEP is not the primary beneficiary, although AEP holds a significant variable interest in PATH-WV. AEP’s equity investment in PATH-WV is included in Deferred Charges and Other Noncurrent Assets on the condensed balance sheets. AEP and FirstEnergy share the returns and losses equally in PATH-WV. AEP’s subsidiaries and FirstEnergy’s subsidiaries provide services to the PATH companies through service agreements. The entities recover costs through regulated rates. In August 2012, the PJM board cancelled the PATH Project, the transmission project that PATH was intended to develop and removed it from the 2012 Regional Transmission Expansion Plan. In September 2012, the PATH Project companies submitted an application to the FERC requesting authority to recover prudently-incurred costs associated with the PATH Project. In November 2012, the FERC issued an order accepting the PATH Project’s abandonment cost recovery application, subject to settlement procedures and hearing. The parties to the case have been unable to reach a settlement agreement and in March 2014, settlement judge procedures were terminated. Hearings at FERC were held in March and April 2015. In April 2015, PATH filed a stipulation agreement with the FERC that agreed to a 50% debt and 50% equity capital structure and a 4.7% cost of long-term debt for the entire amortization period. In September 2015, the Administrative Law Judge who conducted the hearings issued an Initial Decision, which if adopted by the FERC, would deem certain costs not recoverable. The Initial Decision has no binding effect. Additional briefing was submitted during the fourth quarter of 2015. The case is currently pending before FERC. Depending on the outcome of this proceeding, PATH-WV may be required to refund certain amounts that have been collected under its formula rate. Management believes its financial statements adequately address the potential impact of this proceeding. AEP’s investment in PATH-WV was: March 31, 2016 December 31, 2015 As Reported on the Balance Sheet Maximum Exposure As Reported on Maximum Exposure (in millions) Capital Contribution from Parent $ 18.8 $ 18.8 $ 18.8 $ 18.8 Retained Earnings 2.2 2.2 2.2 2.2 Total Investment in PATH-WV $ 21.0 $ 21.0 $ 21.0 $ 21.0 As of March 31, 2016 , AEP’s $21 million investment in PATH-WV was included in Deferred Charges and Other Noncurrent Assets on the condensed balance sheet. If AEP cannot ultimately recover the investment related to PATH-WV, it could reduce future net income and cash flows. AEPSC provides certain managerial and professional services to AEP’s subsidiaries. Parent is the sole equity owner of AEPSC. AEP management controls the activities of AEPSC. The costs of the services are based on a direct charge or on a prorated basis and billed to the AEP subsidiary companies at AEPSC’s cost. AEP subsidiaries have not provided financial or other support outside of the reimbursement of costs for services rendered. AEPSC finances its operations through cost reimbursement from other AEP subsidiaries. There are no other terms or arrangements between AEPSC and any of the AEP subsidiaries that could require additional financial support from an AEP subsidiary or expose them to losses outside of the normal course of business. AEPSC and its billings are subject to regulation by the FERC. AEP subsidiaries are exposed to losses to the extent they cannot recover the costs of AEPSC through their normal business operations. AEP subsidiaries are considered to have a significant interest in AEPSC due to their activity in AEPSC’s cost reimbursement structure. However, AEP subsidiaries do not have control over AEPSC. AEPSC is consolidated by AEP. In the event AEPSC would require financing or other support outside the cost reimbursement billings, this financing would be provided by AEP. Total AEPSC billings to the Registrant Subsidiaries were as follows: Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 56.6 $ 48.2 I&M 35.0 33.5 OPCo 44.5 39.2 PSO 28.5 23.5 SWEPCo 36.7 31.5 The carrying amount and classification of variable interest in AEPSC’s accounts payable are as follows: March 31, 2016 December 31, 2015 Company As Reported on the Balance Sheet Maximum Exposure As Reported on the Balance Sheet Maximum Exposure (in millions) APCo $ 21.1 $ 21.1 $ 25.8 $ 25.8 I&M 11.6 11.6 16.6 16.6 OPCo 14.9 14.9 23.3 23.3 PSO 9.1 9.1 12.6 12.6 SWEPCo 12.6 12.6 16.4 16.4 AEGCo, a wholly-owned subsidiary of Parent, is consolidated by AEP. AEGCo owns a 50% ownership interest in Rockport Plant, Unit 1, leases a 50% interest in Rockport Plant, Unit 2 and owns 100% of the Lawrenceburg Generating Station. AEGCo sells all the output from the Rockport Plant to I&M and KPCo. AEGCo has a Unit Power Agreement associated with the Lawrenceburg Generating Station which was assigned by OPCo to AGR effective January 1, 2014. AEP has agreed to provide AEGCo with the funds necessary to satisfy all of the debt obligations of AEGCo. I&M is considered to have a significant interest in AEGCo due to these transactions. I&M is exposed to losses to the extent it cannot recover the costs of AEGCo through its normal business operations. In the event AEGCo would require financing or other support outside the billings to I&M and KPCo, this financing would be provided by AEP. Total billings to I&M from AEGCo for the three months ended March 31, 2016 and 2015 were $45 million and $55 million , respectively. The carrying amount of I&M’s liabilities associated with AEGCo as of March 31, 2016 and December 31, 2015 was $13 million and $17 million , respectively. Management estimates the maximum exposure of loss to be equal to the amount of such liability. For additional information regarding AEGCo’s lease, see “Rockport Lease” section of Note 13 in the 2015 Annual Report. |
Public Service Co Of Oklahoma [Member] | |
Variable Interest Entities | VARIABLE INTEREST ENTITIES The disclosures in this note apply to all Registrants unless indicated otherwise. The accounting guidance for “Variable Interest Entities” is a consolidation model that considers if a company has a controlling financial interest in a VIE. A controlling financial interest will have both (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. Entities are required to consolidate a VIE when it is determined that they have a controlling financial interest in a VIE and therefore, are the primary beneficiary of that VIE, as defined by the accounting guidance for “Variable Interest Entities.” In determining whether AEP is the primary beneficiary of a VIE, management considers factors such as equity at risk, the amount of the VIE’s variability AEP absorbs, guarantees of indebtedness, voting rights including kick-out rights, the power to direct the VIE, variable interests held by related parties and other factors. Management believes that significant assumptions and judgments were applied consistently. AEP is the primary beneficiary of Sabine, DCC Fuel, Transition Funding, Ohio Phase-in-Recovery Funding, Appalachian Consumer Rate Relief Funding, AEP Credit, a protected cell of EIS and Transource Energy. In addition, AEP has not provided material financial or other support to any of these entities that was not previously contractually required. AEP holds a significant variable interest in DHLC and Potomac-Appalachian Transmission Highline, LLC West Virginia Series (West Virginia Series). Consolidated Variable Interests Entities Sabine is a mining operator providing mining services to SWEPCo. SWEPCo has no equity investment in Sabine but is Sabine’s only customer. SWEPCo guarantees the debt obligations and lease obligations of Sabine. Under the terms of the note agreements, substantially all assets are pledged and all rights under the lignite mining agreement are assigned to SWEPCo. The creditors of Sabine have no recourse to any AEP entity other than SWEPCo. Under the provisions of the mining agreement, SWEPCo is required to pay, as a part of the cost of lignite delivered, an amount equal to mining costs plus a management fee. In addition, SWEPCo determines how much coal will be mined each year. Based on these facts, management concluded that SWEPCo is the primary beneficiary and is required to consolidate Sabine. SWEPCo’s total billings from Sabine for the three months ended March 31, 2016 and 2015 were $41 million and $42 million , respectively. See the tables below for the classification of Sabine’s assets and liabilities on SWEPCo’s condensed balance sheets. I&M has nuclear fuel lease agreements with DCC Fuel, which was formed for the purpose of acquiring, owning and leasing nuclear fuel to I&M. DCC Fuel purchased the nuclear fuel from I&M with funds received from the issuance of notes to financial institutions. Each DCC Fuel entity is a single-lessee leasing arrangement with only one asset and is capitalized with all debt. Each is a separate legal entity from I&M, the assets of which are not available to satisfy the debts of I&M. Payments on the leases for the three months ended March 31, 2016 and 2015 were $29 million and $23 million , respectively. The leases were recorded as capital leases on I&M’s balance sheet as title to the nuclear fuel transfers to I&M at the end of the respective lease terms, which do not exceed 54 months. Based on I&M’s control of DCC Fuel, management concluded that I&M is the primary beneficiary and is required to consolidate DCC Fuel. The capital leases are eliminated upon consolidation. See the tables below for the classification of DCC Fuel’s assets and liabilities on I&M’s condensed balance sheets. Transition Funding was formed for the sole purpose of issuing and servicing securitization bonds related to Texas Restructuring Legislation. Management has concluded that TCC is the primary beneficiary of Transition Funding because TCC has the power to direct the most significant activities of the VIE and TCC’s equity interest could potentially be significant. Therefore, TCC is required to consolidate Transition Funding. The securitized bonds totaled $1.4 billion and $1.5 billion as of March 31, 2016 and December 31, 2015 , respectively, and are included in Long-term Debt Due Within One Year - Nonaffiliated and Long-term Debt - Nonaffiliated on the condensed balance sheets. Transition Funding has securitized transition assets of $1.3 billion and $1.3 billion as of March 31, 2016 and December 31, 2015 , respectively, which are presented separately on the face of the condensed balance sheets. The securitized transition assets represent the right to impose and collect Texas true-up costs from customers receiving electric transmission or distribution service from TCC under recovery mechanisms approved by the PUCT. The securitization bonds are payable only from and secured by the securitized transition assets. The bondholders have no recourse to TCC or any other AEP entity. TCC acts as the servicer for Transition Funding’s securitized transition assets and remits all related amounts collected from customers to Transition Funding for interest and principal payments on the securitization bonds and related costs. See the tables below for the classification of Transition Funding’s assets and liabilities on the condensed balance sheets. Ohio Phase-in-Recovery Funding was formed for the sole purpose of issuing and servicing securitization bonds related to phase-in recovery property. Management has concluded that OPCo is the primary beneficiary of Ohio Phase-in-Recovery Funding because OPCo has the power to direct the most significant activities of the VIE and OPCo’s equity interest could potentially be significant. Therefore, OPCo is required to consolidate Ohio Phase-in-Recovery Funding. The securitized bonds totaled $163 million and $185 million as of March 31, 2016 and December 31, 2015 , respectively, and are included in Long-term Debt Due Within One Year - Nonaffiliated and Long-term Debt - Nonaffiliated on the condensed balance sheets. Ohio Phase-in-Recovery Funding has securitized assets of $80 million and $86 million as of March 31, 2016 and December 31, 2015 , respectively, which are presented separately on the face of the condensed balance sheets. The phase-in recovery property represents the right to impose and collect Ohio deferred distribution charges from customers receiving electric transmission and distribution service from OPCo under a recovery mechanism approved by the PUCO. In August 2013, securitization bonds were issued. The securitization bonds are payable only from and secured by the securitized assets. The bondholders have no recourse to OPCo or any other AEP entity. OPCo acts as the servicer for Ohio Phase-in-Recovery Funding’s securitized assets and remits all related amounts collected from customers to Ohio Phase-in-Recovery Funding for interest and principal payments on the securitization bonds and related costs. See the tables below for the classification of Ohio Phase-in-Recovery Funding’s assets and liabilities on OPCo’s condensed balance sheets. Appalachian Consumer Rate Relief Funding was formed for the sole purpose of issuing and servicing securitization bonds related to APCo’s under-recovered ENEC deferral balance. Management has concluded that APCo is the primary beneficiary of Appalachian Consumer Rate Relief Funding because APCo has the power to direct the most significant activities of the VIE and APCo’s equity interest could potentially be significant. Therefore, APCo is required to consolidate Appalachian Consumer Rate Relief Funding. The securitized bonds totaled $330 million and $342 million , as of March 31, 2016 and December 31, 2015 , respectively, and are included in Long-term Debt Due Within One Year - Nonaffiliated and Long-term Debt - Nonaffiliated on the condensed balance sheets. Appalachian Consumer Rate Relief Funding has securitized assets of $322 million and $328 million , as of March 31, 2016 and December 31, 2015 , respectively, which are presented separately on the face of the condensed balance sheets. The phase-in recovery property represents the right to impose and collect West Virginia deferred generation charges from customers receiving electric transmission, distribution and generation service from APCo under a recovery mechanism approved by the WVPSC. In November 2013, securitization bonds were issued. The securitization bonds are payable only from and secured by the securitized assets. The bondholders have no recourse to APCo or any other AEP entity. APCo acts as the servicer for Appalachian Consumer Rate Relief Funding’s securitized assets and remits all related amounts collected from customers to Appalachian Consumer Rate Relief Funding for interest and principal payments on the securitization bonds and related costs. See the tables below for the classification of Appalachian Consumer Rate Relief Funding’s assets and liabilities on APCo’s condensed balance sheets. AEP Credit is a wholly-owned subsidiary of Parent. AEP Credit purchases, without recourse, accounts receivable from certain utility subsidiaries of AEP to reduce working capital requirements. AEP provides a minimum of 5% equity and up to 20% of AEP Credit’s short-term borrowing needs in excess of third party financings. Any third party financing of AEP Credit only has recourse to the receivables securitized for such financing. Based on AEP’s control of AEP Credit, management concluded that AEP is the primary beneficiary and is required to consolidate AEP Credit. See the tables below for the classification of AEP Credit’s assets and liabilities on the condensed balance sheets. See “Sale of Receivables - AEP Credit” section of Note 12 . AEP’s subsidiaries participate in one protected cell of EIS for approximately ten lines of insurance. EIS has multiple protected cells. Neither AEP nor its subsidiaries have an equity investment in EIS. The AEP System is essentially this EIS cell’s only participant, but allows certain third parties access to this insurance. AEP’s subsidiaries and any allowed third parties share in the insurance coverage, premiums and risk of loss from claims. Based on AEP’s control and the structure of the protected cell of EIS, management concluded that AEP is the primary beneficiary of the protected cell and are required to consolidate the protected cell of EIS. The insurance premium expense to the protected cell for the three months ended March 31, 2016 and 2015 were $13 million and $14 million , respectively. See the tables below for the classification of the protected cell’s assets and liabilities on the condensed balance sheets. Transource Energy was formed for the purpose of investing in utilities which develop, acquire, construct, own and operate transmission facilities in accordance with FERC-approved rates. AEP has equity and voting ownership of 86.5% with the other owner having 13.5% interest. Management has concluded that Transource Energy is a VIE and that AEP is the primary beneficiary because AEP has the power to direct the most significant activities of the entity and AEP’s equity interest could potentially be significant. Therefore, AEP is required to consolidate Transource Energy. In January 2014, Transource Missouri (a wholly-owned subsidiary of Transource Energy) acquired transmission assets from the non-controlling owner and issued debt and received a capital contribution to fund the acquisition. The majority of Transource Energy’s activity resulted from the asset acquisition, construction projects, debt issuance and capital contribution. AEP has provided capital contributions to Transource Energy of $8 million and $47 million during the three months ended March 31, 2016 and the year ended December 31, 2015 , respectively. AEP and the other owner of Transource Energy are required to ensure a specific equity level in Transource Missouri upon completion of projects or if a project is abandoned by the RTO. See the tables below for the classification of Transource Energy’s assets and liabilities on the condensed balance sheets. The balances below represent the assets and liabilities of the VIEs that are consolidated. These balances include intercompany transactions that are eliminated upon consolidation. AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES VARIABLE INTEREST ENTITIES March 31, 2016 Registrant Subsidiaries Other Consolidated VIEs SWEPCo Sabine I&M DCC Fuel OPCo APCo AEP Credit TCC Transition Funding Protected Cell of EIS Transource Energy (in millions) ASSETS Current Assets $ 59.6 $ 79.6 $ 18.8 $ 10.8 $ 850.4 $ 139.4 $ 172.5 $ 13.6 Net Property, Plant and Equipment 140.4 129.0 — — — — — 253.1 Other Noncurrent Assets 62.8 67.7 150.6 (a) 326.2 (b) 7.6 1,316.8 (c) 2.0 6.3 Total Assets $ 262.8 $ 276.3 $ 169.4 $ 337.0 $ 858.0 $ 1,456.2 $ 174.5 $ 273.0 LIABILITIES AND EQUITY Current Liabilities $ 37.3 $ 73.4 $ 46.2 $ 24.8 $ 781.9 $ 238.0 $ 48.8 $ 44.5 Noncurrent Liabilities 225.1 202.9 121.9 310.9 0.4 1,200.1 81.8 118.7 Equity 0.4 — 1.3 1.3 75.7 18.1 43.9 109.8 Total Liabilities and Equity $ 262.8 $ 276.3 $ 169.4 $ 337.0 $ 858.0 $ 1,456.2 $ 174.5 $ 273.0 (a) Includes an intercompany item eliminated in consolidation of $70.7 million . (b) Includes an intercompany item eliminated in consolidation of $3.9 million . (c) Includes an intercompany item eliminated in consolidation of $66.6 million . AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES VARIABLE INTEREST ENTITIES December 31, 2015 Registrant Subsidiaries Other Consolidated VIEs SWEPCo Sabine I&M DCC Fuel OPCo APCo AEP Credit TCC Transition Funding Protected Cell of EIS Transource Energy (in millions) ASSETS Current Assets $ 61.7 $ 91.1 $ 31.2 $ 18.5 $ 925.7 $ 234.1 $ 165.3 $ 10.8 Net Property, Plant and Equipment 147.0 159.9 — — — — — 227.2 Other Noncurrent Assets 61.8 84.6 162.0 (a) 332.0 (b) 6.4 1,365.7 (c) 1.9 5.5 Total Assets $ 270.5 $ 335.6 $ 193.2 $ 350.5 $ 932.1 $ 1,599.8 $ 167.2 $ 243.5 LIABILITIES AND EQUITY Current Liabilities $ 47.7 $ 84.8 $ 47.3 $ 27.1 $ 855.1 $ 291.7 $ 41.8 $ 36.6 Noncurrent Liabilities 222.3 250.8 144.6 321.5 0.3 1,290.0 83.9 113.0 Equity 0.5 — 1.3 1.9 76.7 18.1 41.5 93.9 Total Liabilities and Equity $ 270.5 $ 335.6 $ 193.2 $ 350.5 $ 932.1 $ 1,599.8 $ 167.2 $ 243.5 (a) Includes an intercompany item eliminated in consolidation of $76.1 million . (b) Includes an intercompany item eliminated in consolidation of $4.0 million . (c) Includes an intercompany item eliminated in consolidation of $68.2 million . Non-Consolidated Significant Variable Interests DHLC is a mining operator which sells 50% of the lignite produced to SWEPCo and 50% to CLECO. SWEPCo and CLECO share the executive board seats and voting rights equally. Each entity guarantees 50% of DHLC’s debt. SWEPCo and CLECO equally approve DHLC’s annual budget. The creditors of DHLC have no recourse to any AEP entity other than SWEPCo. As SWEPCo is the sole equity owner of DHLC, it receives 100% of the management fee. SWEPCo’s total billings from DHLC for the three months ended March 31, 2016 and 2015 were $15 million and $15 million , respectively. SWEPCo is not required to consolidate DHLC as it is not the primary beneficiary, although SWEPCo holds a significant variable interest in DHLC. SWEPCo’s equity investment in DHLC is included in Deferred Charges and Other Noncurrent Assets on SWEPCo’s condensed balance sheets. SWEPCo’s investment in DHLC was: March 31, 2016 December 31, 2015 As Reported on the Balance Sheet Maximum Exposure As Reported on the Balance Sheet Maximum Exposure (in millions) Capital Contribution from SWEPCo $ 7.6 $ 7.6 $ 7.6 $ 7.6 Retained Earnings 8.7 8.7 7.7 7.7 SWEPCo’s Guarantee of Debt — 87.4 — 82.9 Total Investment in DHLC $ 16.3 $ 103.7 $ 15.3 $ 98.2 AEP and FirstEnergy Corp. (FirstEnergy) have a joint venture in Potomac-Appalachian Transmission Highline, LLC (PATH). PATH is a series limited liability company and was created to construct, through its operating companies, a high-voltage transmission line project in the PJM region. PATH consists of the “West Virginia Series (PATH-WV),” owned equally by subsidiaries of FirstEnergy and AEP, and the “Allegheny Series” which is 100% owned by a subsidiary of FirstEnergy. Provisions exist within the PATH-WV agreement that make it a VIE. AEP has no interest or control in the “Allegheny Series”. AEP is not required to consolidate PATH-WV as AEP is not the primary beneficiary, although AEP holds a significant variable interest in PATH-WV. AEP’s equity investment in PATH-WV is included in Deferred Charges and Other Noncurrent Assets on the condensed balance sheets. AEP and FirstEnergy share the returns and losses equally in PATH-WV. AEP’s subsidiaries and FirstEnergy’s subsidiaries provide services to the PATH companies through service agreements. The entities recover costs through regulated rates. In August 2012, the PJM board cancelled the PATH Project, the transmission project that PATH was intended to develop and removed it from the 2012 Regional Transmission Expansion Plan. In September 2012, the PATH Project companies submitted an application to the FERC requesting authority to recover prudently-incurred costs associated with the PATH Project. In November 2012, the FERC issued an order accepting the PATH Project’s abandonment cost recovery application, subject to settlement procedures and hearing. The parties to the case have been unable to reach a settlement agreement and in March 2014, settlement judge procedures were terminated. Hearings at FERC were held in March and April 2015. In April 2015, PATH filed a stipulation agreement with the FERC that agreed to a 50% debt and 50% equity capital structure and a 4.7% cost of long-term debt for the entire amortization period. In September 2015, the Administrative Law Judge who conducted the hearings issued an Initial Decision, which if adopted by the FERC, would deem certain costs not recoverable. The Initial Decision has no binding effect. Additional briefing was submitted during the fourth quarter of 2015. The case is currently pending before FERC. Depending on the outcome of this proceeding, PATH-WV may be required to refund certain amounts that have been collected under its formula rate. Management believes its financial statements adequately address the potential impact of this proceeding. AEP’s investment in PATH-WV was: March 31, 2016 December 31, 2015 As Reported on the Balance Sheet Maximum Exposure As Reported on Maximum Exposure (in millions) Capital Contribution from Parent $ 18.8 $ 18.8 $ 18.8 $ 18.8 Retained Earnings 2.2 2.2 2.2 2.2 Total Investment in PATH-WV $ 21.0 $ 21.0 $ 21.0 $ 21.0 As of March 31, 2016 , AEP’s $21 million investment in PATH-WV was included in Deferred Charges and Other Noncurrent Assets on the condensed balance sheet. If AEP cannot ultimately recover the investment related to PATH-WV, it could reduce future net income and cash flows. AEPSC provides certain managerial and professional services to AEP’s subsidiaries. Parent is the sole equity owner of AEPSC. AEP management controls the activities of AEPSC. The costs of the services are based on a direct charge or on a prorated basis and billed to the AEP subsidiary companies at AEPSC’s cost. AEP subsidiaries have not provided financial or other support outside of the reimbursement of costs for services rendered. AEPSC finances its operations through cost reimbursement from other AEP subsidiaries. There are no other terms or arrangements between AEPSC and any of the AEP subsidiaries that could require additional financial support from an AEP subsidiary or expose them to losses outside of the normal course of business. AEPSC and its billings are subject to regulation by the FERC. AEP subsidiaries are exposed to losses to the extent they cannot recover the costs of AEPSC through their normal business operations. AEP subsidiaries are considered to have a significant interest in AEPSC due to their activity in AEPSC’s cost reimbursement structure. However, AEP subsidiaries do not have control over AEPSC. AEPSC is consolidated by AEP. In the event AEPSC would require financing or other support outside the cost reimbursement billings, this financing would be provided by AEP. Total AEPSC billings to the Registrant Subsidiaries were as follows: Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 56.6 $ 48.2 I&M 35.0 33.5 OPCo 44.5 39.2 PSO 28.5 23.5 SWEPCo 36.7 31.5 The carrying amount and classification of variable interest in AEPSC’s accounts payable are as follows: March 31, 2016 December 31, 2015 Company As Reported on the Balance Sheet Maximum Exposure As Reported on the Balance Sheet Maximum Exposure (in millions) APCo $ 21.1 $ 21.1 $ 25.8 $ 25.8 I&M 11.6 11.6 16.6 16.6 OPCo 14.9 14.9 23.3 23.3 PSO 9.1 9.1 12.6 12.6 SWEPCo 12.6 12.6 16.4 16.4 AEGCo, a wholly-owned subsidiary of Parent, is consolidated by AEP. AEGCo owns a 50% ownership interest in Rockport Plant, Unit 1, leases a 50% interest in Rockport Plant, Unit 2 and owns 100% of the Lawrenceburg Generating Station. AEGCo sells all the output from the Rockport Plant to I&M and KPCo. AEGCo has a Unit Power Agreement associated with the Lawrenceburg Generating Station which was assigned by OPCo to AGR effective January 1, 2014. AEP has agreed to provide AEGCo with the funds necessary to satisfy all of the debt obligations of AEGCo. I&M is considered to have a significant interest in AEGCo due to these transactions. I&M is exposed to losses to the extent it cannot recover the costs of AEGCo through its normal business operations. In the event AEGCo would require financing or other support outside the billings to I&M and KPCo, this financing would be provided by AEP. Total billings to I&M from AEGCo for the three months ended March 31, 2016 and 2015 were $45 million and $55 million , respectively. The carrying amount of I&M’s liabilities associated with AEGCo as of March 31, 2016 and December 31, 2015 was $13 million and $17 million , respectively. Management estimates the maximum exposure of loss to be equal to the amount of such liability. For additional information regarding AEGCo’s lease, see “Rockport Lease” section of Note 13 in the 2015 Annual Report. |
Southwestern Electric Power Co [Member] | |
Variable Interest Entities | VARIABLE INTEREST ENTITIES The disclosures in this note apply to all Registrants unless indicated otherwise. The accounting guidance for “Variable Interest Entities” is a consolidation model that considers if a company has a controlling financial interest in a VIE. A controlling financial interest will have both (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. Entities are required to consolidate a VIE when it is determined that they have a controlling financial interest in a VIE and therefore, are the primary beneficiary of that VIE, as defined by the accounting guidance for “Variable Interest Entities.” In determining whether AEP is the primary beneficiary of a VIE, management considers factors such as equity at risk, the amount of the VIE’s variability AEP absorbs, guarantees of indebtedness, voting rights including kick-out rights, the power to direct the VIE, variable interests held by related parties and other factors. Management believes that significant assumptions and judgments were applied consistently. AEP is the primary beneficiary of Sabine, DCC Fuel, Transition Funding, Ohio Phase-in-Recovery Funding, Appalachian Consumer Rate Relief Funding, AEP Credit, a protected cell of EIS and Transource Energy. In addition, AEP has not provided material financial or other support to any of these entities that was not previously contractually required. AEP holds a significant variable interest in DHLC and Potomac-Appalachian Transmission Highline, LLC West Virginia Series (West Virginia Series). Consolidated Variable Interests Entities Sabine is a mining operator providing mining services to SWEPCo. SWEPCo has no equity investment in Sabine but is Sabine’s only customer. SWEPCo guarantees the debt obligations and lease obligations of Sabine. Under the terms of the note agreements, substantially all assets are pledged and all rights under the lignite mining agreement are assigned to SWEPCo. The creditors of Sabine have no recourse to any AEP entity other than SWEPCo. Under the provisions of the mining agreement, SWEPCo is required to pay, as a part of the cost of lignite delivered, an amount equal to mining costs plus a management fee. In addition, SWEPCo determines how much coal will be mined each year. Based on these facts, management concluded that SWEPCo is the primary beneficiary and is required to consolidate Sabine. SWEPCo’s total billings from Sabine for the three months ended March 31, 2016 and 2015 were $41 million and $42 million , respectively. See the tables below for the classification of Sabine’s assets and liabilities on SWEPCo’s condensed balance sheets. I&M has nuclear fuel lease agreements with DCC Fuel, which was formed for the purpose of acquiring, owning and leasing nuclear fuel to I&M. DCC Fuel purchased the nuclear fuel from I&M with funds received from the issuance of notes to financial institutions. Each DCC Fuel entity is a single-lessee leasing arrangement with only one asset and is capitalized with all debt. Each is a separate legal entity from I&M, the assets of which are not available to satisfy the debts of I&M. Payments on the leases for the three months ended March 31, 2016 and 2015 were $29 million and $23 million , respectively. The leases were recorded as capital leases on I&M’s balance sheet as title to the nuclear fuel transfers to I&M at the end of the respective lease terms, which do not exceed 54 months. Based on I&M’s control of DCC Fuel, management concluded that I&M is the primary beneficiary and is required to consolidate DCC Fuel. The capital leases are eliminated upon consolidation. See the tables below for the classification of DCC Fuel’s assets and liabilities on I&M’s condensed balance sheets. Transition Funding was formed for the sole purpose of issuing and servicing securitization bonds related to Texas Restructuring Legislation. Management has concluded that TCC is the primary beneficiary of Transition Funding because TCC has the power to direct the most significant activities of the VIE and TCC’s equity interest could potentially be significant. Therefore, TCC is required to consolidate Transition Funding. The securitized bonds totaled $1.4 billion and $1.5 billion as of March 31, 2016 and December 31, 2015 , respectively, and are included in Long-term Debt Due Within One Year - Nonaffiliated and Long-term Debt - Nonaffiliated on the condensed balance sheets. Transition Funding has securitized transition assets of $1.3 billion and $1.3 billion as of March 31, 2016 and December 31, 2015 , respectively, which are presented separately on the face of the condensed balance sheets. The securitized transition assets represent the right to impose and collect Texas true-up costs from customers receiving electric transmission or distribution service from TCC under recovery mechanisms approved by the PUCT. The securitization bonds are payable only from and secured by the securitized transition assets. The bondholders have no recourse to TCC or any other AEP entity. TCC acts as the servicer for Transition Funding’s securitized transition assets and remits all related amounts collected from customers to Transition Funding for interest and principal payments on the securitization bonds and related costs. See the tables below for the classification of Transition Funding’s assets and liabilities on the condensed balance sheets. Ohio Phase-in-Recovery Funding was formed for the sole purpose of issuing and servicing securitization bonds related to phase-in recovery property. Management has concluded that OPCo is the primary beneficiary of Ohio Phase-in-Recovery Funding because OPCo has the power to direct the most significant activities of the VIE and OPCo’s equity interest could potentially be significant. Therefore, OPCo is required to consolidate Ohio Phase-in-Recovery Funding. The securitized bonds totaled $163 million and $185 million as of March 31, 2016 and December 31, 2015 , respectively, and are included in Long-term Debt Due Within One Year - Nonaffiliated and Long-term Debt - Nonaffiliated on the condensed balance sheets. Ohio Phase-in-Recovery Funding has securitized assets of $80 million and $86 million as of March 31, 2016 and December 31, 2015 , respectively, which are presented separately on the face of the condensed balance sheets. The phase-in recovery property represents the right to impose and collect Ohio deferred distribution charges from customers receiving electric transmission and distribution service from OPCo under a recovery mechanism approved by the PUCO. In August 2013, securitization bonds were issued. The securitization bonds are payable only from and secured by the securitized assets. The bondholders have no recourse to OPCo or any other AEP entity. OPCo acts as the servicer for Ohio Phase-in-Recovery Funding’s securitized assets and remits all related amounts collected from customers to Ohio Phase-in-Recovery Funding for interest and principal payments on the securitization bonds and related costs. See the tables below for the classification of Ohio Phase-in-Recovery Funding’s assets and liabilities on OPCo’s condensed balance sheets. Appalachian Consumer Rate Relief Funding was formed for the sole purpose of issuing and servicing securitization bonds related to APCo’s under-recovered ENEC deferral balance. Management has concluded that APCo is the primary beneficiary of Appalachian Consumer Rate Relief Funding because APCo has the power to direct the most significant activities of the VIE and APCo’s equity interest could potentially be significant. Therefore, APCo is required to consolidate Appalachian Consumer Rate Relief Funding. The securitized bonds totaled $330 million and $342 million , as of March 31, 2016 and December 31, 2015 , respectively, and are included in Long-term Debt Due Within One Year - Nonaffiliated and Long-term Debt - Nonaffiliated on the condensed balance sheets. Appalachian Consumer Rate Relief Funding has securitized assets of $322 million and $328 million , as of March 31, 2016 and December 31, 2015 , respectively, which are presented separately on the face of the condensed balance sheets. The phase-in recovery property represents the right to impose and collect West Virginia deferred generation charges from customers receiving electric transmission, distribution and generation service from APCo under a recovery mechanism approved by the WVPSC. In November 2013, securitization bonds were issued. The securitization bonds are payable only from and secured by the securitized assets. The bondholders have no recourse to APCo or any other AEP entity. APCo acts as the servicer for Appalachian Consumer Rate Relief Funding’s securitized assets and remits all related amounts collected from customers to Appalachian Consumer Rate Relief Funding for interest and principal payments on the securitization bonds and related costs. See the tables below for the classification of Appalachian Consumer Rate Relief Funding’s assets and liabilities on APCo’s condensed balance sheets. AEP Credit is a wholly-owned subsidiary of Parent. AEP Credit purchases, without recourse, accounts receivable from certain utility subsidiaries of AEP to reduce working capital requirements. AEP provides a minimum of 5% equity and up to 20% of AEP Credit’s short-term borrowing needs in excess of third party financings. Any third party financing of AEP Credit only has recourse to the receivables securitized for such financing. Based on AEP’s control of AEP Credit, management concluded that AEP is the primary beneficiary and is required to consolidate AEP Credit. See the tables below for the classification of AEP Credit’s assets and liabilities on the condensed balance sheets. See “Sale of Receivables - AEP Credit” section of Note 12 . AEP’s subsidiaries participate in one protected cell of EIS for approximately ten lines of insurance. EIS has multiple protected cells. Neither AEP nor its subsidiaries have an equity investment in EIS. The AEP System is essentially this EIS cell’s only participant, but allows certain third parties access to this insurance. AEP’s subsidiaries and any allowed third parties share in the insurance coverage, premiums and risk of loss from claims. Based on AEP’s control and the structure of the protected cell of EIS, management concluded that AEP is the primary beneficiary of the protected cell and are required to consolidate the protected cell of EIS. The insurance premium expense to the protected cell for the three months ended March 31, 2016 and 2015 were $13 million and $14 million , respectively. See the tables below for the classification of the protected cell’s assets and liabilities on the condensed balance sheets. Transource Energy was formed for the purpose of investing in utilities which develop, acquire, construct, own and operate transmission facilities in accordance with FERC-approved rates. AEP has equity and voting ownership of 86.5% with the other owner having 13.5% interest. Management has concluded that Transource Energy is a VIE and that AEP is the primary beneficiary because AEP has the power to direct the most significant activities of the entity and AEP’s equity interest could potentially be significant. Therefore, AEP is required to consolidate Transource Energy. In January 2014, Transource Missouri (a wholly-owned subsidiary of Transource Energy) acquired transmission assets from the non-controlling owner and issued debt and received a capital contribution to fund the acquisition. The majority of Transource Energy’s activity resulted from the asset acquisition, construction projects, debt issuance and capital contribution. AEP has provided capital contributions to Transource Energy of $8 million and $47 million during the three months ended March 31, 2016 and the year ended December 31, 2015 , respectively. AEP and the other owner of Transource Energy are required to ensure a specific equity level in Transource Missouri upon completion of projects or if a project is abandoned by the RTO. See the tables below for the classification of Transource Energy’s assets and liabilities on the condensed balance sheets. The balances below represent the assets and liabilities of the VIEs that are consolidated. These balances include intercompany transactions that are eliminated upon consolidation. AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES VARIABLE INTEREST ENTITIES March 31, 2016 Registrant Subsidiaries Other Consolidated VIEs SWEPCo Sabine I&M DCC Fuel OPCo APCo AEP Credit TCC Transition Funding Protected Cell of EIS Transource Energy (in millions) ASSETS Current Assets $ 59.6 $ 79.6 $ 18.8 $ 10.8 $ 850.4 $ 139.4 $ 172.5 $ 13.6 Net Property, Plant and Equipment 140.4 129.0 — — — — — 253.1 Other Noncurrent Assets 62.8 67.7 150.6 (a) 326.2 (b) 7.6 1,316.8 (c) 2.0 6.3 Total Assets $ 262.8 $ 276.3 $ 169.4 $ 337.0 $ 858.0 $ 1,456.2 $ 174.5 $ 273.0 LIABILITIES AND EQUITY Current Liabilities $ 37.3 $ 73.4 $ 46.2 $ 24.8 $ 781.9 $ 238.0 $ 48.8 $ 44.5 Noncurrent Liabilities 225.1 202.9 121.9 310.9 0.4 1,200.1 81.8 118.7 Equity 0.4 — 1.3 1.3 75.7 18.1 43.9 109.8 Total Liabilities and Equity $ 262.8 $ 276.3 $ 169.4 $ 337.0 $ 858.0 $ 1,456.2 $ 174.5 $ 273.0 (a) Includes an intercompany item eliminated in consolidation of $70.7 million . (b) Includes an intercompany item eliminated in consolidation of $3.9 million . (c) Includes an intercompany item eliminated in consolidation of $66.6 million . AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES VARIABLE INTEREST ENTITIES December 31, 2015 Registrant Subsidiaries Other Consolidated VIEs SWEPCo Sabine I&M DCC Fuel OPCo APCo AEP Credit TCC Transition Funding Protected Cell of EIS Transource Energy (in millions) ASSETS Current Assets $ 61.7 $ 91.1 $ 31.2 $ 18.5 $ 925.7 $ 234.1 $ 165.3 $ 10.8 Net Property, Plant and Equipment 147.0 159.9 — — — — — 227.2 Other Noncurrent Assets 61.8 84.6 162.0 (a) 332.0 (b) 6.4 1,365.7 (c) 1.9 5.5 Total Assets $ 270.5 $ 335.6 $ 193.2 $ 350.5 $ 932.1 $ 1,599.8 $ 167.2 $ 243.5 LIABILITIES AND EQUITY Current Liabilities $ 47.7 $ 84.8 $ 47.3 $ 27.1 $ 855.1 $ 291.7 $ 41.8 $ 36.6 Noncurrent Liabilities 222.3 250.8 144.6 321.5 0.3 1,290.0 83.9 113.0 Equity 0.5 — 1.3 1.9 76.7 18.1 41.5 93.9 Total Liabilities and Equity $ 270.5 $ 335.6 $ 193.2 $ 350.5 $ 932.1 $ 1,599.8 $ 167.2 $ 243.5 (a) Includes an intercompany item eliminated in consolidation of $76.1 million . (b) Includes an intercompany item eliminated in consolidation of $4.0 million . (c) Includes an intercompany item eliminated in consolidation of $68.2 million . Non-Consolidated Significant Variable Interests DHLC is a mining operator which sells 50% of the lignite produced to SWEPCo and 50% to CLECO. SWEPCo and CLECO share the executive board seats and voting rights equally. Each entity guarantees 50% of DHLC’s debt. SWEPCo and CLECO equally approve DHLC’s annual budget. The creditors of DHLC have no recourse to any AEP entity other than SWEPCo. As SWEPCo is the sole equity owner of DHLC, it receives 100% of the management fee. SWEPCo’s total billings from DHLC for the three months ended March 31, 2016 and 2015 were $15 million and $15 million , respectively. SWEPCo is not required to consolidate DHLC as it is not the primary beneficiary, although SWEPCo holds a significant variable interest in DHLC. SWEPCo’s equity investment in DHLC is included in Deferred Charges and Other Noncurrent Assets on SWEPCo’s condensed balance sheets. SWEPCo’s investment in DHLC was: March 31, 2016 December 31, 2015 As Reported on the Balance Sheet Maximum Exposure As Reported on the Balance Sheet Maximum Exposure (in millions) Capital Contribution from SWEPCo $ 7.6 $ 7.6 $ 7.6 $ 7.6 Retained Earnings 8.7 8.7 7.7 7.7 SWEPCo’s Guarantee of Debt — 87.4 — 82.9 Total Investment in DHLC $ 16.3 $ 103.7 $ 15.3 $ 98.2 AEP and FirstEnergy Corp. (FirstEnergy) have a joint venture in Potomac-Appalachian Transmission Highline, LLC (PATH). PATH is a series limited liability company and was created to construct, through its operating companies, a high-voltage transmission line project in the PJM region. PATH consists of the “West Virginia Series (PATH-WV),” owned equally by subsidiaries of FirstEnergy and AEP, and the “Allegheny Series” which is 100% owned by a subsidiary of FirstEnergy. Provisions exist within the PATH-WV agreement that make it a VIE. AEP has no interest or control in the “Allegheny Series”. AEP is not required to consolidate PATH-WV as AEP is not the primary beneficiary, although AEP holds a significant variable interest in PATH-WV. AEP’s equity investment in PATH-WV is included in Deferred Charges and Other Noncurrent Assets on the condensed balance sheets. AEP and FirstEnergy share the returns and losses equally in PATH-WV. AEP’s subsidiaries and FirstEnergy’s subsidiaries provide services to the PATH companies through service agreements. The entities recover costs through regulated rates. In August 2012, the PJM board cancelled the PATH Project, the transmission project that PATH was intended to develop and removed it from the 2012 Regional Transmission Expansion Plan. In September 2012, the PATH Project companies submitted an application to the FERC requesting authority to recover prudently-incurred costs associated with the PATH Project. In November 2012, the FERC issued an order accepting the PATH Project’s abandonment cost recovery application, subject to settlement procedures and hearing. The parties to the case have been unable to reach a settlement agreement and in March 2014, settlement judge procedures were terminated. Hearings at FERC were held in March and April 2015. In April 2015, PATH filed a stipulation agreement with the FERC that agreed to a 50% debt and 50% equity capital structure and a 4.7% cost of long-term debt for the entire amortization period. In September 2015, the Administrative Law Judge who conducted the hearings issued an Initial Decision, which if adopted by the FERC, would deem certain costs not recoverable. The Initial Decision has no binding effect. Additional briefing was submitted during the fourth quarter of 2015. The case is currently pending before FERC. Depending on the outcome of this proceeding, PATH-WV may be required to refund certain amounts that have been collected under its formula rate. Management believes its financial statements adequately address the potential impact of this proceeding. AEP’s investment in PATH-WV was: March 31, 2016 December 31, 2015 As Reported on the Balance Sheet Maximum Exposure As Reported on Maximum Exposure (in millions) Capital Contribution from Parent $ 18.8 $ 18.8 $ 18.8 $ 18.8 Retained Earnings 2.2 2.2 2.2 2.2 Total Investment in PATH-WV $ 21.0 $ 21.0 $ 21.0 $ 21.0 As of March 31, 2016 , AEP’s $21 million investment in PATH-WV was included in Deferred Charges and Other Noncurrent Assets on the condensed balance sheet. If AEP cannot ultimately recover the investment related to PATH-WV, it could reduce future net income and cash flows. AEPSC provides certain managerial and professional services to AEP’s subsidiaries. Parent is the sole equity owner of AEPSC. AEP management controls the activities of AEPSC. The costs of the services are based on a direct charge or on a prorated basis and billed to the AEP subsidiary companies at AEPSC’s cost. AEP subsidiaries have not provided financial or other support outside of the reimbursement of costs for services rendered. AEPSC finances its operations through cost reimbursement from other AEP subsidiaries. There are no other terms or arrangements between AEPSC and any of the AEP subsidiaries that could require additional financial support from an AEP subsidiary or expose them to losses outside of the normal course of business. AEPSC and its billings are subject to regulation by the FERC. AEP subsidiaries are exposed to losses to the extent they cannot recover the costs of AEPSC through their normal business operations. AEP subsidiaries are considered to have a significant interest in AEPSC due to their activity in AEPSC’s cost reimbursement structure. However, AEP subsidiaries do not have control over AEPSC. AEPSC is consolidated by AEP. In the event AEPSC would require financing or other support outside the cost reimbursement billings, this financing would be provided by AEP. Total AEPSC billings to the Registrant Subsidiaries were as follows: Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 56.6 $ 48.2 I&M 35.0 33.5 OPCo 44.5 39.2 PSO 28.5 23.5 SWEPCo 36.7 31.5 The carrying amount and classification of variable interest in AEPSC’s accounts payable are as follows: March 31, 2016 December 31, 2015 Company As Reported on the Balance Sheet Maximum Exposure As Reported on the Balance Sheet Maximum Exposure (in millions) APCo $ 21.1 $ 21.1 $ 25.8 $ 25.8 I&M 11.6 11.6 16.6 16.6 OPCo 14.9 14.9 23.3 23.3 PSO 9.1 9.1 12.6 12.6 SWEPCo 12.6 12.6 16.4 16.4 AEGCo, a wholly-owned subsidiary of Parent, is consolidated by AEP. AEGCo owns a 50% ownership interest in Rockport Plant, Unit 1, leases a 50% interest in Rockport Plant, Unit 2 and owns 100% of the Lawrenceburg Generating Station. AEGCo sells all the output from the Rockport Plant to I&M and KPCo. AEGCo has a Unit Power Agreement associated with the Lawrenceburg Generating Station which was assigned by OPCo to AGR effective January 1, 2014. AEP has agreed to provide AEGCo with the funds necessary to satisfy all of the debt obligations of AEGCo. I&M is considered to have a significant interest in AEGCo due to these transactions. I&M is exposed to losses to the extent it cannot recover the costs of AEGCo through its normal business operations. In the event AEGCo would require financing or other support outside the billings to I&M and KPCo, this financing would be provided by AEP. Total billings to I&M from AEGCo for the three months ended March 31, 2016 and 2015 were $45 million and $55 million , respectively. The carrying amount of I&M’s liabilities associated with AEGCo as of March 31, 2016 and December 31, 2015 was $13 million and $17 million , respectively. Management estimates the maximum exposure of loss to be equal to the amount of such liability. For additional information regarding AEGCo’s lease, see “Rockport Lease” section of Note 13 in the 2015 Annual Report. |
Significant Accounting Matters
Significant Accounting Matters (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Basis of Accounting | General The unaudited condensed financial statements and footnotes were prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements. In the opinion of management, the unaudited condensed interim financial statements reflect all normal and recurring accruals and adjustments necessary for a fair presentation of the net income, financial position and cash flows for the interim periods for each Registrant. Net income for the three months ended March 31, 2016 is not necessarily indicative of results that may be expected for the year ending December 31, 2016 . The condensed financial statements are unaudited and should be read in conjunction with the audited 2015 financial statements and notes thereto, which are included in the Registrant’s Annual Reports on Form 10-K as filed with the SEC on February 23, 2016 . |
Earnings Per Share | Earnings Per Share (EPS) (Applies to AEP) Basic EPS is calculated by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS is calculated by adjusting the weighted average outstanding common shares, assuming conversion of all potentially dilutive stock options and awards. |
Appalachian Power Co [Member] | |
Basis of Accounting | General The unaudited condensed financial statements and footnotes were prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements. In the opinion of management, the unaudited condensed interim financial statements reflect all normal and recurring accruals and adjustments necessary for a fair presentation of the net income, financial position and cash flows for the interim periods for each Registrant. Net income for the three months ended March 31, 2016 is not necessarily indicative of results that may be expected for the year ending December 31, 2016 . The condensed financial statements are unaudited and should be read in conjunction with the audited 2015 financial statements and notes thereto, which are included in the Registrant’s Annual Reports on Form 10-K as filed with the SEC on February 23, 2016 . |
Indiana Michigan Power Co [Member] | |
Basis of Accounting | General The unaudited condensed financial statements and footnotes were prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements. In the opinion of management, the unaudited condensed interim financial statements reflect all normal and recurring accruals and adjustments necessary for a fair presentation of the net income, financial position and cash flows for the interim periods for each Registrant. Net income for the three months ended March 31, 2016 is not necessarily indicative of results that may be expected for the year ending December 31, 2016 . The condensed financial statements are unaudited and should be read in conjunction with the audited 2015 financial statements and notes thereto, which are included in the Registrant’s Annual Reports on Form 10-K as filed with the SEC on February 23, 2016 . |
Ohio Power Co [Member] | |
Basis of Accounting | General The unaudited condensed financial statements and footnotes were prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements. In the opinion of management, the unaudited condensed interim financial statements reflect all normal and recurring accruals and adjustments necessary for a fair presentation of the net income, financial position and cash flows for the interim periods for each Registrant. Net income for the three months ended March 31, 2016 is not necessarily indicative of results that may be expected for the year ending December 31, 2016 . The condensed financial statements are unaudited and should be read in conjunction with the audited 2015 financial statements and notes thereto, which are included in the Registrant’s Annual Reports on Form 10-K as filed with the SEC on February 23, 2016 . |
Public Service Co Of Oklahoma [Member] | |
Basis of Accounting | General The unaudited condensed financial statements and footnotes were prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements. In the opinion of management, the unaudited condensed interim financial statements reflect all normal and recurring accruals and adjustments necessary for a fair presentation of the net income, financial position and cash flows for the interim periods for each Registrant. Net income for the three months ended March 31, 2016 is not necessarily indicative of results that may be expected for the year ending December 31, 2016 . The condensed financial statements are unaudited and should be read in conjunction with the audited 2015 financial statements and notes thereto, which are included in the Registrant’s Annual Reports on Form 10-K as filed with the SEC on February 23, 2016 . |
Southwestern Electric Power Co [Member] | |
Basis of Accounting | General The unaudited condensed financial statements and footnotes were prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements. In the opinion of management, the unaudited condensed interim financial statements reflect all normal and recurring accruals and adjustments necessary for a fair presentation of the net income, financial position and cash flows for the interim periods for each Registrant. Net income for the three months ended March 31, 2016 is not necessarily indicative of results that may be expected for the year ending December 31, 2016 . The condensed financial statements are unaudited and should be read in conjunction with the audited 2015 financial statements and notes thereto, which are included in the Registrant’s Annual Reports on Form 10-K as filed with the SEC on February 23, 2016 . |
Derivatives and Hedging (Polici
Derivatives and Hedging (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Derivatives and Hedging | Credit Risk Management limits credit risk in wholesale marketing and trading activities by assessing the creditworthiness of potential counterparties before entering into transactions with them and continuing to evaluate their creditworthiness on an ongoing basis. Management uses Moody’s, Standard and Poor’s and current market-based qualitative and quantitative data as well as financial statements to assess the financial health of counterparties on an ongoing basis. Master agreements are typically used to facilitate the netting of cash flows associated with a single counterparty and may include collateral requirements. Collateral requirements in the form of cash, letters of credit and parental/affiliate guarantees may be obtained as security from counterparties in order to mitigate credit risk. A counterparty is required to post cash or letters of credit in the event exposure exceeds the established threshold. The threshold represents an unsecured credit limit which may be supported by a parental/affiliate guaranty, as determined in accordance with AEP’s credit policy. In addition, master agreements allow for termination and liquidation of all positions in the event of a failure or inability to post collateral. Collateral Triggering Events Credit Downgrade Triggers (Applies to AEP, APCo, I&M, PSO and SWEPCo) Under the tariffs of the RTOs and Independent System Operators (ISOs) and a limited number of derivative and non-derivative contracts primarily related to competitive retail auction loads, additional amounts of collateral are required if certain credit ratings decline below a specified rating threshold. The amount of collateral required fluctuates based on market prices and total exposure. On an ongoing basis, AEP’s risk management organization assesses the appropriateness of these collateral triggering items in contracts. AEP, APCo, I&M, PSO and SWEPCo have not experienced a downgrade below a specified rating threshold that would require the posting of additional collateral. Accounting for Cash Flow Hedging Strategies For cash flow hedges (i.e. hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the Registrants initially report the effective portion of the gain or loss on the derivative instrument as a component of Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets until the period the hedged item affects Net Income. The Registrants recognize any hedge ineffectiveness in Net Income immediately during the period of change, except in regulated jurisdictions where hedge ineffectiveness would be recorded as a regulatory asset (for losses) or a regulatory liability (for gains) if applicable. Realized gains and losses on derivative contracts for the purchase and sale of power designated as cash flow hedges are included in Total Revenues or Purchased Electricity for Resale on the condensed statements of income or in Regulatory Assets or Regulatory Liabilities on the condensed balance sheets, depending on the specific nature of the risk being hedged. Fair Value Hedging Strategies (Applies to AEP) Parent enters into interest rate derivative transactions as part of an overall strategy to manage the mix of fixed-rate and floating-rate debt. Certain interest rate derivative transactions effectively modify exposure to interest rate risk by converting a portion of fixed-rate debt to a floating rate. Provided specific criteria are met, these interest rate derivatives are designated as fair value hedges. Cash Flow Hedging Strategies The Registrants utilize cash flow hedges on certain derivative transactions for the purchase and sale of power (“Commodity”) in order to manage the variable price risk related to forecasted purchases and sales. Management monitors the potential impacts of commodity price changes and, where appropriate, enters into derivative transactions to protect profit margins for a portion of future electricity sales and purchases. The Registrants do not hedge all commodity price risk. The Registrants utilize a variety of interest rate derivative transactions in order to manage interest rate risk exposure. The Registrants also utilize interest rate derivative contracts to manage interest rate exposure related to future borrowings of fixed-rate debt. The Registrants do not hedge all interest rate exposure. At times, the Registrants are exposed to foreign currency exchange rate risks primarily when some fixed assets are purchased from foreign suppliers. In accordance with AEP’s risk management policy, the Registrants may utilize foreign currency derivative transactions to protect against the risk of increased cash outflows resulting from a foreign currency’s appreciation against the dollar. The Registrants do not hedge all foreign currency exposure. ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND THE IMPACT ON THE FINANCIAL STATEMENTS The accounting guidance for “Derivatives and Hedging” requires recognition of all qualifying derivative instruments as either assets or liabilities on the condensed balance sheets at fair value. The fair values of derivative instruments accounted for using MTM accounting or hedge accounting are based on exchange prices and broker quotes. If a quoted market price is not available, the estimate of fair value is based on the best information available including valuation models that estimate future energy prices based on existing market and broker quotes, supply and demand market data and assumptions. In order to determine the relevant fair values of the derivative instruments, the Registrants apply valuation adjustments for discounting, liquidity and credit quality. Credit risk is the risk that a counterparty will fail to perform on the contract or fail to pay amounts due. Liquidity risk represents the risk that imperfections in the market will cause the price to vary from estimated fair value based upon prevailing market supply and demand conditions. Since energy markets are imperfect and volatile, there are inherent risks related to the underlying assumptions in models used to fair value risk management contracts. Unforeseen events may cause reasonable price curves to differ from actual price curves throughout a contract’s term and at the time a contract settles. Consequently, there could be significant adverse or favorable effects on future net income and cash flows if market prices are not consistent with management’s estimates of current market consensus for forward prices in the current period. This is particularly true for longer term contracts. Cash flows may vary based on market conditions, margin requirements and the timing of settlement of risk management contracts. According to the accounting guidance for “Derivatives and Hedging,” the Registrants reflect the fair values of derivative instruments subject to netting agreements with the same counterparty net of related cash collateral. For certain risk management contracts, the Registrants are required to post or receive cash collateral based on third party contractual agreements and risk profiles. The accumulated gains or losses related to foreign currency hedges are reclassified from Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets into Depreciation and Amortization expense on the condensed statements of income over the depreciable lives of the fixed assets designated as the hedged items in qualifying foreign currency hedging relationships. Cross-Default Triggers (Applies to AEP, APCo and I&M) In addition, a majority of non-exchange traded commodity contracts contain cross-default provisions that, if triggered, would permit the counterparty to declare a default and require settlement of the outstanding payable. These cross-default provisions could be triggered if there was a non-performance event by Parent or the obligor under outstanding debt or a third party obligation that is $50 million or greater. On an ongoing basis, AEP’s risk management organization assesses the appropriateness of these cross-default provisions in the contracts. Accounting for Fair Value Hedging Strategies (Applies to AEP) For fair value hedges (i.e. hedging the exposure to changes in the fair value of an asset, liability or an identified portion thereof attributable to a particular risk), the gain or loss on the derivative instrument as well as the offsetting gain or loss on the hedged item associated with the hedged risk impacts Net Income during the period of change. AEP records realized and unrealized gains or losses on interest rate swaps that qualify for fair value hedge accounting treatment and any offsetting changes in the fair value of the debt being hedged in Interest Expense on the condensed statements of income. The Registrants reclassify gains and losses on interest rate derivative hedges related to debt financings from Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets into Interest Expense on the condensed statements of income in those periods in which hedged interest payments occur. OBJECTIVES FOR UTILIZATION OF DERIVATIVE INSTRUMENTS AEPSC is agent for and transacts on behalf of AEP subsidiaries, including the Registrant Subsidiaries. AEPEP is agent for and transacts on behalf of other AEP subsidiaries. The Registrants are exposed to certain market risks as major power producers and participants in the electricity, capacity, natural gas, coal and emission allowance markets. These risks include commodity price risks which may be subject to capacity risk, interest rate risk, credit risk and, to a lesser extent, foreign currency exchange risk. These risks represent the risk of loss that may impact the Registrants due to changes in the underlying market prices or rates. Management utilizes derivative instruments to manage these risks. STRATEGIES FOR UTILIZATION OF DERIVATIVE INSTRUMENTS TO ACHIEVE OBJECTIVES Risk Management Strategies The strategy surrounding the use of derivative instruments primarily focuses on managing risk exposures, future cash flows and creating value utilizing both economic and formal hedging strategies. The risk management strategies also include the use of derivative instruments for trading purposes which focus on seizing market opportunities to create value driven by expected changes in the market prices of the commodities. To accomplish these objectives, the Registrants primarily employ risk management contracts including physical and financial forward purchase-and-sale contracts and, to a lesser extent, OTC swaps and options. Not all risk management contracts meet the definition of a derivative under the accounting guidance for “Derivatives and Hedging.” Derivative risk management contracts elected normal under the normal purchases and normal sales scope exception are not subject to the requirements of this accounting guidance. The Registrants utilize power, capacity, coal, natural gas, interest rate and, to a lesser extent, heating oil, gasoline and other commodity contracts to manage the risk associated with the energy business. The Registrants utilize interest rate derivative contracts in order to manage the interest rate exposure associated with the commodity portfolio. For disclosure purposes, such risks are grouped as “Commodity,” as these risks are related to energy risk management activities. The Registrants also utilize derivative contracts to manage interest rate risk associated with debt financing and foreign currency risk associated with future purchase obligations denominated in foreign currencies. For disclosure purposes, these risks are grouped as “Interest Rate and Foreign Currency.” The amount of risk taken is determined by the Commercial Operations, Energy Supply and Finance groups in accordance with established risk management policies as approved by the Finance Committee of the Board of Directors. Certain qualifying derivative instruments have been designated as normal purchase or normal sale contracts, as provided in the accounting guidance for “Derivatives and Hedging.” Derivative contracts that have been designated as normal purchases or normal sales under that accounting guidance are not subject to MTM accounting treatment and are recognized on the condensed statements of income on an accrual basis. The accounting for the changes in the fair value of a derivative instrument depends on whether it qualifies for and has been designated as part of a hedging relationship and further, on the type of hedging relationship. Depending on the exposure, management designates a hedging instrument as a fair value hedge or a cash flow hedge. For contracts that have not been designated as part of a hedging relationship, the accounting for changes in fair value depends on whether the derivative instrument is held for trading purposes. Unrealized and realized gains and losses on derivative instruments held for trading purposes are included in revenues on a net basis on the condensed statements of income. Unrealized and realized gains and losses on derivative instruments not held for trading purposes are included in revenues or expenses on the condensed statements of income depending on the relevant facts and circumstances. Certain derivatives that economically hedge future commodity risk are recorded in the same expense line item on the condensed statements of income as that of the associated risk. However, unrealized and some realized gains and losses in regulated jurisdictions for both trading and non-trading derivative instruments are recorded as regulatory assets (for losses) or regulatory liabilities (for gains) in accordance with the accounting guidance for “Regulated Operations.” |
Appalachian Power Co [Member] | |
Derivatives and Hedging | Credit Risk Management limits credit risk in wholesale marketing and trading activities by assessing the creditworthiness of potential counterparties before entering into transactions with them and continuing to evaluate their creditworthiness on an ongoing basis. Management uses Moody’s, Standard and Poor’s and current market-based qualitative and quantitative data as well as financial statements to assess the financial health of counterparties on an ongoing basis. Master agreements are typically used to facilitate the netting of cash flows associated with a single counterparty and may include collateral requirements. Collateral requirements in the form of cash, letters of credit and parental/affiliate guarantees may be obtained as security from counterparties in order to mitigate credit risk. A counterparty is required to post cash or letters of credit in the event exposure exceeds the established threshold. The threshold represents an unsecured credit limit which may be supported by a parental/affiliate guaranty, as determined in accordance with AEP’s credit policy. In addition, master agreements allow for termination and liquidation of all positions in the event of a failure or inability to post collateral. Collateral Triggering Events Credit Downgrade Triggers (Applies to AEP, APCo, I&M, PSO and SWEPCo) Under the tariffs of the RTOs and Independent System Operators (ISOs) and a limited number of derivative and non-derivative contracts primarily related to competitive retail auction loads, additional amounts of collateral are required if certain credit ratings decline below a specified rating threshold. The amount of collateral required fluctuates based on market prices and total exposure. On an ongoing basis, AEP’s risk management organization assesses the appropriateness of these collateral triggering items in contracts. AEP, APCo, I&M, PSO and SWEPCo have not experienced a downgrade below a specified rating threshold that would require the posting of additional collateral. The accumulated gains or losses related to foreign currency hedges are reclassified from Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets into Depreciation and Amortization expense on the condensed statements of income over the depreciable lives of the fixed assets designated as the hedged items in qualifying foreign currency hedging relationships. The Registrants reclassify gains and losses on interest rate derivative hedges related to debt financings from Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets into Interest Expense on the condensed statements of income in those periods in which hedged interest payments occur. Cross-Default Triggers (Applies to AEP, APCo and I&M) In addition, a majority of non-exchange traded commodity contracts contain cross-default provisions that, if triggered, would permit the counterparty to declare a default and require settlement of the outstanding payable. These cross-default provisions could be triggered if there was a non-performance event by Parent or the obligor under outstanding debt or a third party obligation that is $50 million or greater. On an ongoing basis, AEP’s risk management organization assesses the appropriateness of these cross-default provisions in the contracts. OBJECTIVES FOR UTILIZATION OF DERIVATIVE INSTRUMENTS AEPSC is agent for and transacts on behalf of AEP subsidiaries, including the Registrant Subsidiaries. AEPEP is agent for and transacts on behalf of other AEP subsidiaries. The Registrants are exposed to certain market risks as major power producers and participants in the electricity, capacity, natural gas, coal and emission allowance markets. These risks include commodity price risks which may be subject to capacity risk, interest rate risk, credit risk and, to a lesser extent, foreign currency exchange risk. These risks represent the risk of loss that may impact the Registrants due to changes in the underlying market prices or rates. Management utilizes derivative instruments to manage these risks. STRATEGIES FOR UTILIZATION OF DERIVATIVE INSTRUMENTS TO ACHIEVE OBJECTIVES Risk Management Strategies The strategy surrounding the use of derivative instruments primarily focuses on managing risk exposures, future cash flows and creating value utilizing both economic and formal hedging strategies. The risk management strategies also include the use of derivative instruments for trading purposes which focus on seizing market opportunities to create value driven by expected changes in the market prices of the commodities. To accomplish these objectives, the Registrants primarily employ risk management contracts including physical and financial forward purchase-and-sale contracts and, to a lesser extent, OTC swaps and options. Not all risk management contracts meet the definition of a derivative under the accounting guidance for “Derivatives and Hedging.” Derivative risk management contracts elected normal under the normal purchases and normal sales scope exception are not subject to the requirements of this accounting guidance. The Registrants utilize power, capacity, coal, natural gas, interest rate and, to a lesser extent, heating oil, gasoline and other commodity contracts to manage the risk associated with the energy business. The Registrants utilize interest rate derivative contracts in order to manage the interest rate exposure associated with the commodity portfolio. For disclosure purposes, such risks are grouped as “Commodity,” as these risks are related to energy risk management activities. The Registrants also utilize derivative contracts to manage interest rate risk associated with debt financing and foreign currency risk associated with future purchase obligations denominated in foreign currencies. For disclosure purposes, these risks are grouped as “Interest Rate and Foreign Currency.” The amount of risk taken is determined by the Commercial Operations, Energy Supply and Finance groups in accordance with established risk management policies as approved by the Finance Committee of the Board of Directors. Cash Flow Hedging Strategies The Registrants utilize cash flow hedges on certain derivative transactions for the purchase and sale of power (“Commodity”) in order to manage the variable price risk related to forecasted purchases and sales. Management monitors the potential impacts of commodity price changes and, where appropriate, enters into derivative transactions to protect profit margins for a portion of future electricity sales and purchases. The Registrants do not hedge all commodity price risk. The Registrants utilize a variety of interest rate derivative transactions in order to manage interest rate risk exposure. The Registrants also utilize interest rate derivative contracts to manage interest rate exposure related to future borrowings of fixed-rate debt. The Registrants do not hedge all interest rate exposure. At times, the Registrants are exposed to foreign currency exchange rate risks primarily when some fixed assets are purchased from foreign suppliers. In accordance with AEP’s risk management policy, the Registrants may utilize foreign currency derivative transactions to protect against the risk of increased cash outflows resulting from a foreign currency’s appreciation against the dollar. The Registrants do not hedge all foreign currency exposure. ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND THE IMPACT ON THE FINANCIAL STATEMENTS The accounting guidance for “Derivatives and Hedging” requires recognition of all qualifying derivative instruments as either assets or liabilities on the condensed balance sheets at fair value. The fair values of derivative instruments accounted for using MTM accounting or hedge accounting are based on exchange prices and broker quotes. If a quoted market price is not available, the estimate of fair value is based on the best information available including valuation models that estimate future energy prices based on existing market and broker quotes, supply and demand market data and assumptions. In order to determine the relevant fair values of the derivative instruments, the Registrants apply valuation adjustments for discounting, liquidity and credit quality. Credit risk is the risk that a counterparty will fail to perform on the contract or fail to pay amounts due. Liquidity risk represents the risk that imperfections in the market will cause the price to vary from estimated fair value based upon prevailing market supply and demand conditions. Since energy markets are imperfect and volatile, there are inherent risks related to the underlying assumptions in models used to fair value risk management contracts. Unforeseen events may cause reasonable price curves to differ from actual price curves throughout a contract’s term and at the time a contract settles. Consequently, there could be significant adverse or favorable effects on future net income and cash flows if market prices are not consistent with management’s estimates of current market consensus for forward prices in the current period. This is particularly true for longer term contracts. Cash flows may vary based on market conditions, margin requirements and the timing of settlement of risk management contracts. According to the accounting guidance for “Derivatives and Hedging,” the Registrants reflect the fair values of derivative instruments subject to netting agreements with the same counterparty net of related cash collateral. For certain risk management contracts, the Registrants are required to post or receive cash collateral based on third party contractual agreements and risk profiles. Accounting for Cash Flow Hedging Strategies For cash flow hedges (i.e. hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the Registrants initially report the effective portion of the gain or loss on the derivative instrument as a component of Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets until the period the hedged item affects Net Income. The Registrants recognize any hedge ineffectiveness in Net Income immediately during the period of change, except in regulated jurisdictions where hedge ineffectiveness would be recorded as a regulatory asset (for losses) or a regulatory liability (for gains) if applicable. Realized gains and losses on derivative contracts for the purchase and sale of power designated as cash flow hedges are included in Total Revenues or Purchased Electricity for Resale on the condensed statements of income or in Regulatory Assets or Regulatory Liabilities on the condensed balance sheets, depending on the specific nature of the risk being hedged. Certain qualifying derivative instruments have been designated as normal purchase or normal sale contracts, as provided in the accounting guidance for “Derivatives and Hedging.” Derivative contracts that have been designated as normal purchases or normal sales under that accounting guidance are not subject to MTM accounting treatment and are recognized on the condensed statements of income on an accrual basis. The accounting for the changes in the fair value of a derivative instrument depends on whether it qualifies for and has been designated as part of a hedging relationship and further, on the type of hedging relationship. Depending on the exposure, management designates a hedging instrument as a fair value hedge or a cash flow hedge. For contracts that have not been designated as part of a hedging relationship, the accounting for changes in fair value depends on whether the derivative instrument is held for trading purposes. Unrealized and realized gains and losses on derivative instruments held for trading purposes are included in revenues on a net basis on the condensed statements of income. Unrealized and realized gains and losses on derivative instruments not held for trading purposes are included in revenues or expenses on the condensed statements of income depending on the relevant facts and circumstances. Certain derivatives that economically hedge future commodity risk are recorded in the same expense line item on the condensed statements of income as that of the associated risk. However, unrealized and some realized gains and losses in regulated jurisdictions for both trading and non-trading derivative instruments are recorded as regulatory assets (for losses) or regulatory liabilities (for gains) in accordance with the accounting guidance for “Regulated Operations.” |
Indiana Michigan Power Co [Member] | |
Derivatives and Hedging | Accounting for Cash Flow Hedging Strategies For cash flow hedges (i.e. hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the Registrants initially report the effective portion of the gain or loss on the derivative instrument as a component of Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets until the period the hedged item affects Net Income. The Registrants recognize any hedge ineffectiveness in Net Income immediately during the period of change, except in regulated jurisdictions where hedge ineffectiveness would be recorded as a regulatory asset (for losses) or a regulatory liability (for gains) if applicable. Realized gains and losses on derivative contracts for the purchase and sale of power designated as cash flow hedges are included in Total Revenues or Purchased Electricity for Resale on the condensed statements of income or in Regulatory Assets or Regulatory Liabilities on the condensed balance sheets, depending on the specific nature of the risk being hedged. Cross-Default Triggers (Applies to AEP, APCo and I&M) In addition, a majority of non-exchange traded commodity contracts contain cross-default provisions that, if triggered, would permit the counterparty to declare a default and require settlement of the outstanding payable. These cross-default provisions could be triggered if there was a non-performance event by Parent or the obligor under outstanding debt or a third party obligation that is $50 million or greater. On an ongoing basis, AEP’s risk management organization assesses the appropriateness of these cross-default provisions in the contracts. The accumulated gains or losses related to foreign currency hedges are reclassified from Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets into Depreciation and Amortization expense on the condensed statements of income over the depreciable lives of the fixed assets designated as the hedged items in qualifying foreign currency hedging relationships. The Registrants reclassify gains and losses on interest rate derivative hedges related to debt financings from Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets into Interest Expense on the condensed statements of income in those periods in which hedged interest payments occur. Cash Flow Hedging Strategies The Registrants utilize cash flow hedges on certain derivative transactions for the purchase and sale of power (“Commodity”) in order to manage the variable price risk related to forecasted purchases and sales. Management monitors the potential impacts of commodity price changes and, where appropriate, enters into derivative transactions to protect profit margins for a portion of future electricity sales and purchases. The Registrants do not hedge all commodity price risk. The Registrants utilize a variety of interest rate derivative transactions in order to manage interest rate risk exposure. The Registrants also utilize interest rate derivative contracts to manage interest rate exposure related to future borrowings of fixed-rate debt. The Registrants do not hedge all interest rate exposure. At times, the Registrants are exposed to foreign currency exchange rate risks primarily when some fixed assets are purchased from foreign suppliers. In accordance with AEP’s risk management policy, the Registrants may utilize foreign currency derivative transactions to protect against the risk of increased cash outflows resulting from a foreign currency’s appreciation against the dollar. The Registrants do not hedge all foreign currency exposure. ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND THE IMPACT ON THE FINANCIAL STATEMENTS The accounting guidance for “Derivatives and Hedging” requires recognition of all qualifying derivative instruments as either assets or liabilities on the condensed balance sheets at fair value. The fair values of derivative instruments accounted for using MTM accounting or hedge accounting are based on exchange prices and broker quotes. If a quoted market price is not available, the estimate of fair value is based on the best information available including valuation models that estimate future energy prices based on existing market and broker quotes, supply and demand market data and assumptions. In order to determine the relevant fair values of the derivative instruments, the Registrants apply valuation adjustments for discounting, liquidity and credit quality. Credit risk is the risk that a counterparty will fail to perform on the contract or fail to pay amounts due. Liquidity risk represents the risk that imperfections in the market will cause the price to vary from estimated fair value based upon prevailing market supply and demand conditions. Since energy markets are imperfect and volatile, there are inherent risks related to the underlying assumptions in models used to fair value risk management contracts. Unforeseen events may cause reasonable price curves to differ from actual price curves throughout a contract’s term and at the time a contract settles. Consequently, there could be significant adverse or favorable effects on future net income and cash flows if market prices are not consistent with management’s estimates of current market consensus for forward prices in the current period. This is particularly true for longer term contracts. Cash flows may vary based on market conditions, margin requirements and the timing of settlement of risk management contracts. According to the accounting guidance for “Derivatives and Hedging,” the Registrants reflect the fair values of derivative instruments subject to netting agreements with the same counterparty net of related cash collateral. For certain risk management contracts, the Registrants are required to post or receive cash collateral based on third party contractual agreements and risk profiles. Credit Risk Management limits credit risk in wholesale marketing and trading activities by assessing the creditworthiness of potential counterparties before entering into transactions with them and continuing to evaluate their creditworthiness on an ongoing basis. Management uses Moody’s, Standard and Poor’s and current market-based qualitative and quantitative data as well as financial statements to assess the financial health of counterparties on an ongoing basis. Master agreements are typically used to facilitate the netting of cash flows associated with a single counterparty and may include collateral requirements. Collateral requirements in the form of cash, letters of credit and parental/affiliate guarantees may be obtained as security from counterparties in order to mitigate credit risk. A counterparty is required to post cash or letters of credit in the event exposure exceeds the established threshold. The threshold represents an unsecured credit limit which may be supported by a parental/affiliate guaranty, as determined in accordance with AEP’s credit policy. In addition, master agreements allow for termination and liquidation of all positions in the event of a failure or inability to post collateral. Collateral Triggering Events Credit Downgrade Triggers (Applies to AEP, APCo, I&M, PSO and SWEPCo) Under the tariffs of the RTOs and Independent System Operators (ISOs) and a limited number of derivative and non-derivative contracts primarily related to competitive retail auction loads, additional amounts of collateral are required if certain credit ratings decline below a specified rating threshold. The amount of collateral required fluctuates based on market prices and total exposure. On an ongoing basis, AEP’s risk management organization assesses the appropriateness of these collateral triggering items in contracts. AEP, APCo, I&M, PSO and SWEPCo have not experienced a downgrade below a specified rating threshold that would require the posting of additional collateral. OBJECTIVES FOR UTILIZATION OF DERIVATIVE INSTRUMENTS AEPSC is agent for and transacts on behalf of AEP subsidiaries, including the Registrant Subsidiaries. AEPEP is agent for and transacts on behalf of other AEP subsidiaries. The Registrants are exposed to certain market risks as major power producers and participants in the electricity, capacity, natural gas, coal and emission allowance markets. These risks include commodity price risks which may be subject to capacity risk, interest rate risk, credit risk and, to a lesser extent, foreign currency exchange risk. These risks represent the risk of loss that may impact the Registrants due to changes in the underlying market prices or rates. Management utilizes derivative instruments to manage these risks. STRATEGIES FOR UTILIZATION OF DERIVATIVE INSTRUMENTS TO ACHIEVE OBJECTIVES Risk Management Strategies The strategy surrounding the use of derivative instruments primarily focuses on managing risk exposures, future cash flows and creating value utilizing both economic and formal hedging strategies. The risk management strategies also include the use of derivative instruments for trading purposes which focus on seizing market opportunities to create value driven by expected changes in the market prices of the commodities. To accomplish these objectives, the Registrants primarily employ risk management contracts including physical and financial forward purchase-and-sale contracts and, to a lesser extent, OTC swaps and options. Not all risk management contracts meet the definition of a derivative under the accounting guidance for “Derivatives and Hedging.” Derivative risk management contracts elected normal under the normal purchases and normal sales scope exception are not subject to the requirements of this accounting guidance. The Registrants utilize power, capacity, coal, natural gas, interest rate and, to a lesser extent, heating oil, gasoline and other commodity contracts to manage the risk associated with the energy business. The Registrants utilize interest rate derivative contracts in order to manage the interest rate exposure associated with the commodity portfolio. For disclosure purposes, such risks are grouped as “Commodity,” as these risks are related to energy risk management activities. The Registrants also utilize derivative contracts to manage interest rate risk associated with debt financing and foreign currency risk associated with future purchase obligations denominated in foreign currencies. For disclosure purposes, these risks are grouped as “Interest Rate and Foreign Currency.” The amount of risk taken is determined by the Commercial Operations, Energy Supply and Finance groups in accordance with established risk management policies as approved by the Finance Committee of the Board of Directors. Certain qualifying derivative instruments have been designated as normal purchase or normal sale contracts, as provided in the accounting guidance for “Derivatives and Hedging.” Derivative contracts that have been designated as normal purchases or normal sales under that accounting guidance are not subject to MTM accounting treatment and are recognized on the condensed statements of income on an accrual basis. The accounting for the changes in the fair value of a derivative instrument depends on whether it qualifies for and has been designated as part of a hedging relationship and further, on the type of hedging relationship. Depending on the exposure, management designates a hedging instrument as a fair value hedge or a cash flow hedge. For contracts that have not been designated as part of a hedging relationship, the accounting for changes in fair value depends on whether the derivative instrument is held for trading purposes. Unrealized and realized gains and losses on derivative instruments held for trading purposes are included in revenues on a net basis on the condensed statements of income. Unrealized and realized gains and losses on derivative instruments not held for trading purposes are included in revenues or expenses on the condensed statements of income depending on the relevant facts and circumstances. Certain derivatives that economically hedge future commodity risk are recorded in the same expense line item on the condensed statements of income as that of the associated risk. However, unrealized and some realized gains and losses in regulated jurisdictions for both trading and non-trading derivative instruments are recorded as regulatory assets (for losses) or regulatory liabilities (for gains) in accordance with the accounting guidance for “Regulated Operations.” |
Ohio Power Co [Member] | |
Derivatives and Hedging | Accounting for Cash Flow Hedging Strategies For cash flow hedges (i.e. hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the Registrants initially report the effective portion of the gain or loss on the derivative instrument as a component of Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets until the period the hedged item affects Net Income. The Registrants recognize any hedge ineffectiveness in Net Income immediately during the period of change, except in regulated jurisdictions where hedge ineffectiveness would be recorded as a regulatory asset (for losses) or a regulatory liability (for gains) if applicable. Realized gains and losses on derivative contracts for the purchase and sale of power designated as cash flow hedges are included in Total Revenues or Purchased Electricity for Resale on the condensed statements of income or in Regulatory Assets or Regulatory Liabilities on the condensed balance sheets, depending on the specific nature of the risk being hedged. The accumulated gains or losses related to foreign currency hedges are reclassified from Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets into Depreciation and Amortization expense on the condensed statements of income over the depreciable lives of the fixed assets designated as the hedged items in qualifying foreign currency hedging relationships. Cash Flow Hedging Strategies The Registrants utilize cash flow hedges on certain derivative transactions for the purchase and sale of power (“Commodity”) in order to manage the variable price risk related to forecasted purchases and sales. Management monitors the potential impacts of commodity price changes and, where appropriate, enters into derivative transactions to protect profit margins for a portion of future electricity sales and purchases. The Registrants do not hedge all commodity price risk. The Registrants utilize a variety of interest rate derivative transactions in order to manage interest rate risk exposure. The Registrants also utilize interest rate derivative contracts to manage interest rate exposure related to future borrowings of fixed-rate debt. The Registrants do not hedge all interest rate exposure. At times, the Registrants are exposed to foreign currency exchange rate risks primarily when some fixed assets are purchased from foreign suppliers. In accordance with AEP’s risk management policy, the Registrants may utilize foreign currency derivative transactions to protect against the risk of increased cash outflows resulting from a foreign currency’s appreciation against the dollar. The Registrants do not hedge all foreign currency exposure. ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND THE IMPACT ON THE FINANCIAL STATEMENTS The accounting guidance for “Derivatives and Hedging” requires recognition of all qualifying derivative instruments as either assets or liabilities on the condensed balance sheets at fair value. The fair values of derivative instruments accounted for using MTM accounting or hedge accounting are based on exchange prices and broker quotes. If a quoted market price is not available, the estimate of fair value is based on the best information available including valuation models that estimate future energy prices based on existing market and broker quotes, supply and demand market data and assumptions. In order to determine the relevant fair values of the derivative instruments, the Registrants apply valuation adjustments for discounting, liquidity and credit quality. Credit risk is the risk that a counterparty will fail to perform on the contract or fail to pay amounts due. Liquidity risk represents the risk that imperfections in the market will cause the price to vary from estimated fair value based upon prevailing market supply and demand conditions. Since energy markets are imperfect and volatile, there are inherent risks related to the underlying assumptions in models used to fair value risk management contracts. Unforeseen events may cause reasonable price curves to differ from actual price curves throughout a contract’s term and at the time a contract settles. Consequently, there could be significant adverse or favorable effects on future net income and cash flows if market prices are not consistent with management’s estimates of current market consensus for forward prices in the current period. This is particularly true for longer term contracts. Cash flows may vary based on market conditions, margin requirements and the timing of settlement of risk management contracts. According to the accounting guidance for “Derivatives and Hedging,” the Registrants reflect the fair values of derivative instruments subject to netting agreements with the same counterparty net of related cash collateral. For certain risk management contracts, the Registrants are required to post or receive cash collateral based on third party contractual agreements and risk profiles. Certain qualifying derivative instruments have been designated as normal purchase or normal sale contracts, as provided in the accounting guidance for “Derivatives and Hedging.” Derivative contracts that have been designated as normal purchases or normal sales under that accounting guidance are not subject to MTM accounting treatment and are recognized on the condensed statements of income on an accrual basis. The accounting for the changes in the fair value of a derivative instrument depends on whether it qualifies for and has been designated as part of a hedging relationship and further, on the type of hedging relationship. Depending on the exposure, management designates a hedging instrument as a fair value hedge or a cash flow hedge. For contracts that have not been designated as part of a hedging relationship, the accounting for changes in fair value depends on whether the derivative instrument is held for trading purposes. Unrealized and realized gains and losses on derivative instruments held for trading purposes are included in revenues on a net basis on the condensed statements of income. Unrealized and realized gains and losses on derivative instruments not held for trading purposes are included in revenues or expenses on the condensed statements of income depending on the relevant facts and circumstances. Certain derivatives that economically hedge future commodity risk are recorded in the same expense line item on the condensed statements of income as that of the associated risk. However, unrealized and some realized gains and losses in regulated jurisdictions for both trading and non-trading derivative instruments are recorded as regulatory assets (for losses) or regulatory liabilities (for gains) in accordance with the accounting guidance for “Regulated Operations.” The Registrants reclassify gains and losses on interest rate derivative hedges related to debt financings from Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets into Interest Expense on the condensed statements of income in those periods in which hedged interest payments occur. OBJECTIVES FOR UTILIZATION OF DERIVATIVE INSTRUMENTS AEPSC is agent for and transacts on behalf of AEP subsidiaries, including the Registrant Subsidiaries. AEPEP is agent for and transacts on behalf of other AEP subsidiaries. The Registrants are exposed to certain market risks as major power producers and participants in the electricity, capacity, natural gas, coal and emission allowance markets. These risks include commodity price risks which may be subject to capacity risk, interest rate risk, credit risk and, to a lesser extent, foreign currency exchange risk. These risks represent the risk of loss that may impact the Registrants due to changes in the underlying market prices or rates. Management utilizes derivative instruments to manage these risks. STRATEGIES FOR UTILIZATION OF DERIVATIVE INSTRUMENTS TO ACHIEVE OBJECTIVES Risk Management Strategies The strategy surrounding the use of derivative instruments primarily focuses on managing risk exposures, future cash flows and creating value utilizing both economic and formal hedging strategies. The risk management strategies also include the use of derivative instruments for trading purposes which focus on seizing market opportunities to create value driven by expected changes in the market prices of the commodities. To accomplish these objectives, the Registrants primarily employ risk management contracts including physical and financial forward purchase-and-sale contracts and, to a lesser extent, OTC swaps and options. Not all risk management contracts meet the definition of a derivative under the accounting guidance for “Derivatives and Hedging.” Derivative risk management contracts elected normal under the normal purchases and normal sales scope exception are not subject to the requirements of this accounting guidance. The Registrants utilize power, capacity, coal, natural gas, interest rate and, to a lesser extent, heating oil, gasoline and other commodity contracts to manage the risk associated with the energy business. The Registrants utilize interest rate derivative contracts in order to manage the interest rate exposure associated with the commodity portfolio. For disclosure purposes, such risks are grouped as “Commodity,” as these risks are related to energy risk management activities. The Registrants also utilize derivative contracts to manage interest rate risk associated with debt financing and foreign currency risk associated with future purchase obligations denominated in foreign currencies. For disclosure purposes, these risks are grouped as “Interest Rate and Foreign Currency.” The amount of risk taken is determined by the Commercial Operations, Energy Supply and Finance groups in accordance with established risk management policies as approved by the Finance Committee of the Board of Directors. Credit Risk Management limits credit risk in wholesale marketing and trading activities by assessing the creditworthiness of potential counterparties before entering into transactions with them and continuing to evaluate their creditworthiness on an ongoing basis. Management uses Moody’s, Standard and Poor’s and current market-based qualitative and quantitative data as well as financial statements to assess the financial health of counterparties on an ongoing basis. Master agreements are typically used to facilitate the netting of cash flows associated with a single counterparty and may include collateral requirements. Collateral requirements in the form of cash, letters of credit and parental/affiliate guarantees may be obtained as security from counterparties in order to mitigate credit risk. A counterparty is required to post cash or letters of credit in the event exposure exceeds the established threshold. The threshold represents an unsecured credit limit which may be supported by a parental/affiliate guaranty, as determined in accordance with AEP’s credit policy. In addition, master agreements allow for termination and liquidation of all positions in the event of a failure or inability to post collateral. |
Public Service Co Of Oklahoma [Member] | |
Derivatives and Hedging | The accumulated gains or losses related to foreign currency hedges are reclassified from Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets into Depreciation and Amortization expense on the condensed statements of income over the depreciable lives of the fixed assets designated as the hedged items in qualifying foreign currency hedging relationships. Certain qualifying derivative instruments have been designated as normal purchase or normal sale contracts, as provided in the accounting guidance for “Derivatives and Hedging.” Derivative contracts that have been designated as normal purchases or normal sales under that accounting guidance are not subject to MTM accounting treatment and are recognized on the condensed statements of income on an accrual basis. The accounting for the changes in the fair value of a derivative instrument depends on whether it qualifies for and has been designated as part of a hedging relationship and further, on the type of hedging relationship. Depending on the exposure, management designates a hedging instrument as a fair value hedge or a cash flow hedge. For contracts that have not been designated as part of a hedging relationship, the accounting for changes in fair value depends on whether the derivative instrument is held for trading purposes. Unrealized and realized gains and losses on derivative instruments held for trading purposes are included in revenues on a net basis on the condensed statements of income. Unrealized and realized gains and losses on derivative instruments not held for trading purposes are included in revenues or expenses on the condensed statements of income depending on the relevant facts and circumstances. Certain derivatives that economically hedge future commodity risk are recorded in the same expense line item on the condensed statements of income as that of the associated risk. However, unrealized and some realized gains and losses in regulated jurisdictions for both trading and non-trading derivative instruments are recorded as regulatory assets (for losses) or regulatory liabilities (for gains) in accordance with the accounting guidance for “Regulated Operations.” The Registrants reclassify gains and losses on interest rate derivative hedges related to debt financings from Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets into Interest Expense on the condensed statements of income in those periods in which hedged interest payments occur. Credit Risk Management limits credit risk in wholesale marketing and trading activities by assessing the creditworthiness of potential counterparties before entering into transactions with them and continuing to evaluate their creditworthiness on an ongoing basis. Management uses Moody’s, Standard and Poor’s and current market-based qualitative and quantitative data as well as financial statements to assess the financial health of counterparties on an ongoing basis. Master agreements are typically used to facilitate the netting of cash flows associated with a single counterparty and may include collateral requirements. Collateral requirements in the form of cash, letters of credit and parental/affiliate guarantees may be obtained as security from counterparties in order to mitigate credit risk. A counterparty is required to post cash or letters of credit in the event exposure exceeds the established threshold. The threshold represents an unsecured credit limit which may be supported by a parental/affiliate guaranty, as determined in accordance with AEP’s credit policy. In addition, master agreements allow for termination and liquidation of all positions in the event of a failure or inability to post collateral. Collateral Triggering Events Credit Downgrade Triggers (Applies to AEP, APCo, I&M, PSO and SWEPCo) Under the tariffs of the RTOs and Independent System Operators (ISOs) and a limited number of derivative and non-derivative contracts primarily related to competitive retail auction loads, additional amounts of collateral are required if certain credit ratings decline below a specified rating threshold. The amount of collateral required fluctuates based on market prices and total exposure. On an ongoing basis, AEP’s risk management organization assesses the appropriateness of these collateral triggering items in contracts. AEP, APCo, I&M, PSO and SWEPCo have not experienced a downgrade below a specified rating threshold that would require the posting of additional collateral. Accounting for Cash Flow Hedging Strategies For cash flow hedges (i.e. hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the Registrants initially report the effective portion of the gain or loss on the derivative instrument as a component of Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets until the period the hedged item affects Net Income. The Registrants recognize any hedge ineffectiveness in Net Income immediately during the period of change, except in regulated jurisdictions where hedge ineffectiveness would be recorded as a regulatory asset (for losses) or a regulatory liability (for gains) if applicable. Realized gains and losses on derivative contracts for the purchase and sale of power designated as cash flow hedges are included in Total Revenues or Purchased Electricity for Resale on the condensed statements of income or in Regulatory Assets or Regulatory Liabilities on the condensed balance sheets, depending on the specific nature of the risk being hedged. OBJECTIVES FOR UTILIZATION OF DERIVATIVE INSTRUMENTS AEPSC is agent for and transacts on behalf of AEP subsidiaries, including the Registrant Subsidiaries. AEPEP is agent for and transacts on behalf of other AEP subsidiaries. The Registrants are exposed to certain market risks as major power producers and participants in the electricity, capacity, natural gas, coal and emission allowance markets. These risks include commodity price risks which may be subject to capacity risk, interest rate risk, credit risk and, to a lesser extent, foreign currency exchange risk. These risks represent the risk of loss that may impact the Registrants due to changes in the underlying market prices or rates. Management utilizes derivative instruments to manage these risks. STRATEGIES FOR UTILIZATION OF DERIVATIVE INSTRUMENTS TO ACHIEVE OBJECTIVES Risk Management Strategies The strategy surrounding the use of derivative instruments primarily focuses on managing risk exposures, future cash flows and creating value utilizing both economic and formal hedging strategies. The risk management strategies also include the use of derivative instruments for trading purposes which focus on seizing market opportunities to create value driven by expected changes in the market prices of the commodities. To accomplish these objectives, the Registrants primarily employ risk management contracts including physical and financial forward purchase-and-sale contracts and, to a lesser extent, OTC swaps and options. Not all risk management contracts meet the definition of a derivative under the accounting guidance for “Derivatives and Hedging.” Derivative risk management contracts elected normal under the normal purchases and normal sales scope exception are not subject to the requirements of this accounting guidance. The Registrants utilize power, capacity, coal, natural gas, interest rate and, to a lesser extent, heating oil, gasoline and other commodity contracts to manage the risk associated with the energy business. The Registrants utilize interest rate derivative contracts in order to manage the interest rate exposure associated with the commodity portfolio. For disclosure purposes, such risks are grouped as “Commodity,” as these risks are related to energy risk management activities. The Registrants also utilize derivative contracts to manage interest rate risk associated with debt financing and foreign currency risk associated with future purchase obligations denominated in foreign currencies. For disclosure purposes, these risks are grouped as “Interest Rate and Foreign Currency.” The amount of risk taken is determined by the Commercial Operations, Energy Supply and Finance groups in accordance with established risk management policies as approved by the Finance Committee of the Board of Directors. Cash Flow Hedging Strategies The Registrants utilize cash flow hedges on certain derivative transactions for the purchase and sale of power (“Commodity”) in order to manage the variable price risk related to forecasted purchases and sales. Management monitors the potential impacts of commodity price changes and, where appropriate, enters into derivative transactions to protect profit margins for a portion of future electricity sales and purchases. The Registrants do not hedge all commodity price risk. The Registrants utilize a variety of interest rate derivative transactions in order to manage interest rate risk exposure. The Registrants also utilize interest rate derivative contracts to manage interest rate exposure related to future borrowings of fixed-rate debt. The Registrants do not hedge all interest rate exposure. At times, the Registrants are exposed to foreign currency exchange rate risks primarily when some fixed assets are purchased from foreign suppliers. In accordance with AEP’s risk management policy, the Registrants may utilize foreign currency derivative transactions to protect against the risk of increased cash outflows resulting from a foreign currency’s appreciation against the dollar. The Registrants do not hedge all foreign currency exposure. ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND THE IMPACT ON THE FINANCIAL STATEMENTS The accounting guidance for “Derivatives and Hedging” requires recognition of all qualifying derivative instruments as either assets or liabilities on the condensed balance sheets at fair value. The fair values of derivative instruments accounted for using MTM accounting or hedge accounting are based on exchange prices and broker quotes. If a quoted market price is not available, the estimate of fair value is based on the best information available including valuation models that estimate future energy prices based on existing market and broker quotes, supply and demand market data and assumptions. In order to determine the relevant fair values of the derivative instruments, the Registrants apply valuation adjustments for discounting, liquidity and credit quality. Credit risk is the risk that a counterparty will fail to perform on the contract or fail to pay amounts due. Liquidity risk represents the risk that imperfections in the market will cause the price to vary from estimated fair value based upon prevailing market supply and demand conditions. Since energy markets are imperfect and volatile, there are inherent risks related to the underlying assumptions in models used to fair value risk management contracts. Unforeseen events may cause reasonable price curves to differ from actual price curves throughout a contract’s term and at the time a contract settles. Consequently, there could be significant adverse or favorable effects on future net income and cash flows if market prices are not consistent with management’s estimates of current market consensus for forward prices in the current period. This is particularly true for longer term contracts. Cash flows may vary based on market conditions, margin requirements and the timing of settlement of risk management contracts. According to the accounting guidance for “Derivatives and Hedging,” the Registrants reflect the fair values of derivative instruments subject to netting agreements with the same counterparty net of related cash collateral. For certain risk management contracts, the Registrants are required to post or receive cash collateral based on third party contractual agreements and risk profiles. |
Southwestern Electric Power Co [Member] | |
Derivatives and Hedging | Accounting for Cash Flow Hedging Strategies For cash flow hedges (i.e. hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the Registrants initially report the effective portion of the gain or loss on the derivative instrument as a component of Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets until the period the hedged item affects Net Income. The Registrants recognize any hedge ineffectiveness in Net Income immediately during the period of change, except in regulated jurisdictions where hedge ineffectiveness would be recorded as a regulatory asset (for losses) or a regulatory liability (for gains) if applicable. Realized gains and losses on derivative contracts for the purchase and sale of power designated as cash flow hedges are included in Total Revenues or Purchased Electricity for Resale on the condensed statements of income or in Regulatory Assets or Regulatory Liabilities on the condensed balance sheets, depending on the specific nature of the risk being hedged. The Registrants reclassify gains and losses on interest rate derivative hedges related to debt financings from Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets into Interest Expense on the condensed statements of income in those periods in which hedged interest payments occur. Cash Flow Hedging Strategies The Registrants utilize cash flow hedges on certain derivative transactions for the purchase and sale of power (“Commodity”) in order to manage the variable price risk related to forecasted purchases and sales. Management monitors the potential impacts of commodity price changes and, where appropriate, enters into derivative transactions to protect profit margins for a portion of future electricity sales and purchases. The Registrants do not hedge all commodity price risk. The Registrants utilize a variety of interest rate derivative transactions in order to manage interest rate risk exposure. The Registrants also utilize interest rate derivative contracts to manage interest rate exposure related to future borrowings of fixed-rate debt. The Registrants do not hedge all interest rate exposure. At times, the Registrants are exposed to foreign currency exchange rate risks primarily when some fixed assets are purchased from foreign suppliers. In accordance with AEP’s risk management policy, the Registrants may utilize foreign currency derivative transactions to protect against the risk of increased cash outflows resulting from a foreign currency’s appreciation against the dollar. The Registrants do not hedge all foreign currency exposure. ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND THE IMPACT ON THE FINANCIAL STATEMENTS The accounting guidance for “Derivatives and Hedging” requires recognition of all qualifying derivative instruments as either assets or liabilities on the condensed balance sheets at fair value. The fair values of derivative instruments accounted for using MTM accounting or hedge accounting are based on exchange prices and broker quotes. If a quoted market price is not available, the estimate of fair value is based on the best information available including valuation models that estimate future energy prices based on existing market and broker quotes, supply and demand market data and assumptions. In order to determine the relevant fair values of the derivative instruments, the Registrants apply valuation adjustments for discounting, liquidity and credit quality. Credit risk is the risk that a counterparty will fail to perform on the contract or fail to pay amounts due. Liquidity risk represents the risk that imperfections in the market will cause the price to vary from estimated fair value based upon prevailing market supply and demand conditions. Since energy markets are imperfect and volatile, there are inherent risks related to the underlying assumptions in models used to fair value risk management contracts. Unforeseen events may cause reasonable price curves to differ from actual price curves throughout a contract’s term and at the time a contract settles. Consequently, there could be significant adverse or favorable effects on future net income and cash flows if market prices are not consistent with management’s estimates of current market consensus for forward prices in the current period. This is particularly true for longer term contracts. Cash flows may vary based on market conditions, margin requirements and the timing of settlement of risk management contracts. According to the accounting guidance for “Derivatives and Hedging,” the Registrants reflect the fair values of derivative instruments subject to netting agreements with the same counterparty net of related cash collateral. For certain risk management contracts, the Registrants are required to post or receive cash collateral based on third party contractual agreements and risk profiles. Credit Risk Management limits credit risk in wholesale marketing and trading activities by assessing the creditworthiness of potential counterparties before entering into transactions with them and continuing to evaluate their creditworthiness on an ongoing basis. Management uses Moody’s, Standard and Poor’s and current market-based qualitative and quantitative data as well as financial statements to assess the financial health of counterparties on an ongoing basis. Master agreements are typically used to facilitate the netting of cash flows associated with a single counterparty and may include collateral requirements. Collateral requirements in the form of cash, letters of credit and parental/affiliate guarantees may be obtained as security from counterparties in order to mitigate credit risk. A counterparty is required to post cash or letters of credit in the event exposure exceeds the established threshold. The threshold represents an unsecured credit limit which may be supported by a parental/affiliate guaranty, as determined in accordance with AEP’s credit policy. In addition, master agreements allow for termination and liquidation of all positions in the event of a failure or inability to post collateral. Collateral Triggering Events Credit Downgrade Triggers (Applies to AEP, APCo, I&M, PSO and SWEPCo) Under the tariffs of the RTOs and Independent System Operators (ISOs) and a limited number of derivative and non-derivative contracts primarily related to competitive retail auction loads, additional amounts of collateral are required if certain credit ratings decline below a specified rating threshold. The amount of collateral required fluctuates based on market prices and total exposure. On an ongoing basis, AEP’s risk management organization assesses the appropriateness of these collateral triggering items in contracts. AEP, APCo, I&M, PSO and SWEPCo have not experienced a downgrade below a specified rating threshold that would require the posting of additional collateral. OBJECTIVES FOR UTILIZATION OF DERIVATIVE INSTRUMENTS AEPSC is agent for and transacts on behalf of AEP subsidiaries, including the Registrant Subsidiaries. AEPEP is agent for and transacts on behalf of other AEP subsidiaries. The Registrants are exposed to certain market risks as major power producers and participants in the electricity, capacity, natural gas, coal and emission allowance markets. These risks include commodity price risks which may be subject to capacity risk, interest rate risk, credit risk and, to a lesser extent, foreign currency exchange risk. These risks represent the risk of loss that may impact the Registrants due to changes in the underlying market prices or rates. Management utilizes derivative instruments to manage these risks. STRATEGIES FOR UTILIZATION OF DERIVATIVE INSTRUMENTS TO ACHIEVE OBJECTIVES Risk Management Strategies The strategy surrounding the use of derivative instruments primarily focuses on managing risk exposures, future cash flows and creating value utilizing both economic and formal hedging strategies. The risk management strategies also include the use of derivative instruments for trading purposes which focus on seizing market opportunities to create value driven by expected changes in the market prices of the commodities. To accomplish these objectives, the Registrants primarily employ risk management contracts including physical and financial forward purchase-and-sale contracts and, to a lesser extent, OTC swaps and options. Not all risk management contracts meet the definition of a derivative under the accounting guidance for “Derivatives and Hedging.” Derivative risk management contracts elected normal under the normal purchases and normal sales scope exception are not subject to the requirements of this accounting guidance. The Registrants utilize power, capacity, coal, natural gas, interest rate and, to a lesser extent, heating oil, gasoline and other commodity contracts to manage the risk associated with the energy business. The Registrants utilize interest rate derivative contracts in order to manage the interest rate exposure associated with the commodity portfolio. For disclosure purposes, such risks are grouped as “Commodity,” as these risks are related to energy risk management activities. The Registrants also utilize derivative contracts to manage interest rate risk associated with debt financing and foreign currency risk associated with future purchase obligations denominated in foreign currencies. For disclosure purposes, these risks are grouped as “Interest Rate and Foreign Currency.” The amount of risk taken is determined by the Commercial Operations, Energy Supply and Finance groups in accordance with established risk management policies as approved by the Finance Committee of the Board of Directors. The accumulated gains or losses related to foreign currency hedges are reclassified from Accumulated Other Comprehensive Income (Loss) on the condensed balance sheets into Depreciation and Amortization expense on the condensed statements of income over the depreciable lives of the fixed assets designated as the hedged items in qualifying foreign currency hedging relationships. Certain qualifying derivative instruments have been designated as normal purchase or normal sale contracts, as provided in the accounting guidance for “Derivatives and Hedging.” Derivative contracts that have been designated as normal purchases or normal sales under that accounting guidance are not subject to MTM accounting treatment and are recognized on the condensed statements of income on an accrual basis. The accounting for the changes in the fair value of a derivative instrument depends on whether it qualifies for and has been designated as part of a hedging relationship and further, on the type of hedging relationship. Depending on the exposure, management designates a hedging instrument as a fair value hedge or a cash flow hedge. For contracts that have not been designated as part of a hedging relationship, the accounting for changes in fair value depends on whether the derivative instrument is held for trading purposes. Unrealized and realized gains and losses on derivative instruments held for trading purposes are included in revenues on a net basis on the condensed statements of income. Unrealized and realized gains and losses on derivative instruments not held for trading purposes are included in revenues or expenses on the condensed statements of income depending on the relevant facts and circumstances. Certain derivatives that economically hedge future commodity risk are recorded in the same expense line item on the condensed statements of income as that of the associated risk. However, unrealized and some realized gains and losses in regulated jurisdictions for both trading and non-trading derivative instruments are recorded as regulatory assets (for losses) or regulatory liabilities (for gains) in accordance with the accounting guidance for “Regulated Operations.” |
Fair Value Measurements (Polici
Fair Value Measurements (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Valuation Techniques | Fair Value Hierarchy and Valuation Techniques The accounting guidance for “Fair Value Measurements and Disclosures” establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2. When quoted market prices are not available, pricing may be completed using comparable securities, dealer values, operating data and general market conditions to determine fair value. Valuation models utilize various inputs such as commodity, interest rate and, to a lesser degree, volatility and credit that include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, market corroborated inputs (i.e. inputs derived principally from, or correlated to, observable market data) and other observable inputs for the asset or liability. The amount of risk taken is determined by the Commercial Operations, Energy Supply and Finance groups in accordance with established risk management policies as approved by the Finance Committee of AEP’s Board of Directors. AEPSC’s market risk oversight staff independently monitors risk policies, procedures and risk levels and provides members of the Commercial Operations Risk Committee (Regulated Risk Committee) and the Energy Supply Risk Committee (Competitive Risk Committee) various reports regarding compliance with policies, limits and procedures. The Regulated Risk Committee consists of AEPSC’s Chief Operating Officer, Chief Financial Officer, Executive Vice President of Generation, Senior Vice President of Commercial Operations and Chief Risk Officer. The Competitive Risk Committee consists of AEPSC’s Chief Operating Officer, Chief Financial Officer and Chief Risk Officer in addition to Energy Supply’s President and Vice President. For commercial activities, exchange traded derivatives, namely futures contracts, are generally fair valued based on unadjusted quoted prices in active markets and are classified as Level 1. Level 2 inputs primarily consist of OTC broker quotes in moderately active or less active markets, as well as exchange traded contracts where there is insufficient market liquidity to warrant inclusion in Level 1. Management verifies price curves using these broker quotes and classifies these fair values within Level 2 when substantially all of the fair value can be corroborated. Management typically obtains multiple broker quotes, which are nonbinding in nature but are based on recent trades in the marketplace. When multiple broker quotes are obtained, the quoted bid and ask prices are averaged. In certain circumstances, a broker quote may be discarded if it is a clear outlier. Management uses a historical correlation analysis between the broker quoted location and the illiquid locations. If the points are highly correlated, these locations are included within Level 2 as well. Certain OTC and bilaterally executed derivative instruments are executed in less active markets with a lower availability of pricing information. Illiquid transactions, complex structured transactions, FTRs and counterparty credit risk may require nonmarket based inputs. Some of these inputs may be internally developed or extrapolated and utilized to estimate fair value. When such inputs have a significant impact on the measurement of fair value, the instrument is categorized as Level 3. The main driver of contracts being classified as Level 3 is the inability to substantiate energy price curves in the market. A portion of the Level 3 instruments have been economically hedged which limits potential earnings volatility. AEP utilizes its trustee’s external pricing service to estimate the fair value of the underlying investments held in the nuclear trusts. AEP’s investment managers review and validate the prices utilized by the trustee to determine fair value. AEP’s management performs its own valuation testing to verify the fair values of the securities. AEP receives audit reports of the trustee’s operating controls and valuation processes. The trustee uses multiple pricing vendors for the assets held in the trusts. Assets in the nuclear trusts, Cash and Cash Equivalents, Other Temporary Investments and Restricted Cash for Securitized Funding are classified using the following methods. Equities are classified as Level 1 holdings if they are actively traded on exchanges. Items classified as Level 1 are investments in money market funds, fixed income and equity mutual funds and domestic equity securities. They are valued based on observable inputs, primarily unadjusted quoted prices in active markets for identical assets. Items classified as Level 2 are primarily investments in individual fixed income securities and cash equivalent funds. Fixed income securities generally do not trade on exchanges and do not have an official closing price but their valuation inputs are based on observable market data. Pricing vendors calculate bond valuations using financial models and matrices. The models use observable inputs including yields on benchmark securities, quotes by securities brokers, rating agency actions, discounts or premiums on securities compared to par prices, changes in yields for U.S. Treasury securities, corporate actions by bond issuers, prepayment schedules and histories, economic events and, for certain securities, adjustments to yields to reflect changes in the rate of inflation. Other securities with model-derived valuation inputs that are observable are also classified as Level 2 investments. Investments with unobservable valuation inputs are classified as Level 3 investments. |
Fair Values of Long-term Debt | Fair Value Measurements of Long-term Debt The fair values of Long-term Debt are based on quoted market prices, without credit enhancements, for the same or similar issues and the current interest rates offered for instruments with similar maturities classified as Level 2 measurement inputs. These instruments are not marked-to-market. The estimates presented are not necessarily indicative of the amounts that could be realized in a current market exchange. |
Trust Assets for Decommissioning and Spent Nuclear Fuel Disposal | Fair Value Measurements of Trust Assets for Decommissioning and SNF Disposal (Applies to AEP and I&M) Nuclear decommissioning and spent nuclear fuel trust funds represent funds that regulatory commissions allow I&M to collect through rates to fund future decommissioning and spent nuclear fuel disposal liabilities. By rules or orders, the IURC, the MPSC and the FERC established investment limitations and general risk management guidelines. In general, limitations include: • Acceptable investments (rated investment grade or above when purchased). • Maximum percentage invested in a specific type of investment. • Prohibition of investment in obligations of AEP, I&M or their affiliates. • Withdrawals permitted only for payment of decommissioning costs and trust expenses. I&M maintains trust records for each regulatory jurisdiction. Regulatory approval is required to withdraw decommissioning funds. These funds are managed by external investment managers who must comply with the guidelines and rules of the applicable regulatory authorities. The trust assets are invested to optimize the net of tax earnings of the trust giving consideration to liquidity, risk, diversification and other prudent investment objectives. I&M records securities held in these trust funds in Spent Nuclear Fuel and Decommissioning Trusts on its balance sheets. I&M records these securities at fair value. I&M classifies securities in the trust funds as available-for-sale due to their long-term purpose. Other-than-temporary impairments for investments in both debt and equity securities are considered realized losses as a result of securities being managed by an external investment management firm. The external investment management firm makes specific investment decisions regarding the debt and equity investments held in these trusts and generally intends to sell debt securities in an unrealized loss position as part of a tax optimization strategy. Impairments reduce the cost basis of the securities which will affect any future unrealized gain or realized gain or loss due to the adjusted cost of investment. I&M records unrealized gains and other-than-temporary impairments from securities in these trust funds as adjustments to the regulatory liability account for the nuclear decommissioning trust funds and to regulatory assets or liabilities for the SNF disposal trust funds in accordance with their treatment in rates. Consequently, changes in fair value of trust assets do not affect earnings or AOCI. |
Fair Value Assets and Liabilities Measured on Recurring Basis | As required by the accounting guidance for “Fair Value Measurements and Disclosures,” financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Management’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. There have not been any significant changes in management’s valuation techniques. |
Appalachian Power Co [Member] | |
Valuation Techniques | Fair Value Hierarchy and Valuation Techniques The accounting guidance for “Fair Value Measurements and Disclosures” establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2. When quoted market prices are not available, pricing may be completed using comparable securities, dealer values, operating data and general market conditions to determine fair value. Valuation models utilize various inputs such as commodity, interest rate and, to a lesser degree, volatility and credit that include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, market corroborated inputs (i.e. inputs derived principally from, or correlated to, observable market data) and other observable inputs for the asset or liability. The amount of risk taken is determined by the Commercial Operations, Energy Supply and Finance groups in accordance with established risk management policies as approved by the Finance Committee of AEP’s Board of Directors. AEPSC’s market risk oversight staff independently monitors risk policies, procedures and risk levels and provides members of the Commercial Operations Risk Committee (Regulated Risk Committee) and the Energy Supply Risk Committee (Competitive Risk Committee) various reports regarding compliance with policies, limits and procedures. The Regulated Risk Committee consists of AEPSC’s Chief Operating Officer, Chief Financial Officer, Executive Vice President of Generation, Senior Vice President of Commercial Operations and Chief Risk Officer. The Competitive Risk Committee consists of AEPSC’s Chief Operating Officer, Chief Financial Officer and Chief Risk Officer in addition to Energy Supply’s President and Vice President. For commercial activities, exchange traded derivatives, namely futures contracts, are generally fair valued based on unadjusted quoted prices in active markets and are classified as Level 1. Level 2 inputs primarily consist of OTC broker quotes in moderately active or less active markets, as well as exchange traded contracts where there is insufficient market liquidity to warrant inclusion in Level 1. Management verifies price curves using these broker quotes and classifies these fair values within Level 2 when substantially all of the fair value can be corroborated. Management typically obtains multiple broker quotes, which are nonbinding in nature but are based on recent trades in the marketplace. When multiple broker quotes are obtained, the quoted bid and ask prices are averaged. In certain circumstances, a broker quote may be discarded if it is a clear outlier. Management uses a historical correlation analysis between the broker quoted location and the illiquid locations. If the points are highly correlated, these locations are included within Level 2 as well. Certain OTC and bilaterally executed derivative instruments are executed in less active markets with a lower availability of pricing information. Illiquid transactions, complex structured transactions, FTRs and counterparty credit risk may require nonmarket based inputs. Some of these inputs may be internally developed or extrapolated and utilized to estimate fair value. When such inputs have a significant impact on the measurement of fair value, the instrument is categorized as Level 3. The main driver of contracts being classified as Level 3 is the inability to substantiate energy price curves in the market. A portion of the Level 3 instruments have been economically hedged which limits potential earnings volatility. AEP utilizes its trustee’s external pricing service to estimate the fair value of the underlying investments held in the nuclear trusts. AEP’s investment managers review and validate the prices utilized by the trustee to determine fair value. AEP’s management performs its own valuation testing to verify the fair values of the securities. AEP receives audit reports of the trustee’s operating controls and valuation processes. The trustee uses multiple pricing vendors for the assets held in the trusts. Assets in the nuclear trusts, Cash and Cash Equivalents, Other Temporary Investments and Restricted Cash for Securitized Funding are classified using the following methods. Equities are classified as Level 1 holdings if they are actively traded on exchanges. Items classified as Level 1 are investments in money market funds, fixed income and equity mutual funds and domestic equity securities. They are valued based on observable inputs, primarily unadjusted quoted prices in active markets for identical assets. Items classified as Level 2 are primarily investments in individual fixed income securities and cash equivalent funds. Fixed income securities generally do not trade on exchanges and do not have an official closing price but their valuation inputs are based on observable market data. Pricing vendors calculate bond valuations using financial models and matrices. The models use observable inputs including yields on benchmark securities, quotes by securities brokers, rating agency actions, discounts or premiums on securities compared to par prices, changes in yields for U.S. Treasury securities, corporate actions by bond issuers, prepayment schedules and histories, economic events and, for certain securities, adjustments to yields to reflect changes in the rate of inflation. Other securities with model-derived valuation inputs that are observable are also classified as Level 2 investments. Investments with unobservable valuation inputs are classified as Level 3 investments. |
Fair Values of Long-term Debt | Fair Value Measurements of Long-term Debt The fair values of Long-term Debt are based on quoted market prices, without credit enhancements, for the same or similar issues and the current interest rates offered for instruments with similar maturities classified as Level 2 measurement inputs. These instruments are not marked-to-market. The estimates presented are not necessarily indicative of the amounts that could be realized in a current market exchange. |
Fair Value Assets and Liabilities Measured on Recurring Basis | As required by the accounting guidance for “Fair Value Measurements and Disclosures,” financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Management’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. There have not been any significant changes in management’s valuation techniques. |
Indiana Michigan Power Co [Member] | |
Valuation Techniques | Fair Value Hierarchy and Valuation Techniques The accounting guidance for “Fair Value Measurements and Disclosures” establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2. When quoted market prices are not available, pricing may be completed using comparable securities, dealer values, operating data and general market conditions to determine fair value. Valuation models utilize various inputs such as commodity, interest rate and, to a lesser degree, volatility and credit that include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, market corroborated inputs (i.e. inputs derived principally from, or correlated to, observable market data) and other observable inputs for the asset or liability. The amount of risk taken is determined by the Commercial Operations, Energy Supply and Finance groups in accordance with established risk management policies as approved by the Finance Committee of AEP’s Board of Directors. AEPSC’s market risk oversight staff independently monitors risk policies, procedures and risk levels and provides members of the Commercial Operations Risk Committee (Regulated Risk Committee) and the Energy Supply Risk Committee (Competitive Risk Committee) various reports regarding compliance with policies, limits and procedures. The Regulated Risk Committee consists of AEPSC’s Chief Operating Officer, Chief Financial Officer, Executive Vice President of Generation, Senior Vice President of Commercial Operations and Chief Risk Officer. The Competitive Risk Committee consists of AEPSC’s Chief Operating Officer, Chief Financial Officer and Chief Risk Officer in addition to Energy Supply’s President and Vice President. For commercial activities, exchange traded derivatives, namely futures contracts, are generally fair valued based on unadjusted quoted prices in active markets and are classified as Level 1. Level 2 inputs primarily consist of OTC broker quotes in moderately active or less active markets, as well as exchange traded contracts where there is insufficient market liquidity to warrant inclusion in Level 1. Management verifies price curves using these broker quotes and classifies these fair values within Level 2 when substantially all of the fair value can be corroborated. Management typically obtains multiple broker quotes, which are nonbinding in nature but are based on recent trades in the marketplace. When multiple broker quotes are obtained, the quoted bid and ask prices are averaged. In certain circumstances, a broker quote may be discarded if it is a clear outlier. Management uses a historical correlation analysis between the broker quoted location and the illiquid locations. If the points are highly correlated, these locations are included within Level 2 as well. Certain OTC and bilaterally executed derivative instruments are executed in less active markets with a lower availability of pricing information. Illiquid transactions, complex structured transactions, FTRs and counterparty credit risk may require nonmarket based inputs. Some of these inputs may be internally developed or extrapolated and utilized to estimate fair value. When such inputs have a significant impact on the measurement of fair value, the instrument is categorized as Level 3. The main driver of contracts being classified as Level 3 is the inability to substantiate energy price curves in the market. A portion of the Level 3 instruments have been economically hedged which limits potential earnings volatility. AEP utilizes its trustee’s external pricing service to estimate the fair value of the underlying investments held in the nuclear trusts. AEP’s investment managers review and validate the prices utilized by the trustee to determine fair value. AEP’s management performs its own valuation testing to verify the fair values of the securities. AEP receives audit reports of the trustee’s operating controls and valuation processes. The trustee uses multiple pricing vendors for the assets held in the trusts. Assets in the nuclear trusts, Cash and Cash Equivalents, Other Temporary Investments and Restricted Cash for Securitized Funding are classified using the following methods. Equities are classified as Level 1 holdings if they are actively traded on exchanges. Items classified as Level 1 are investments in money market funds, fixed income and equity mutual funds and domestic equity securities. They are valued based on observable inputs, primarily unadjusted quoted prices in active markets for identical assets. Items classified as Level 2 are primarily investments in individual fixed income securities and cash equivalent funds. Fixed income securities generally do not trade on exchanges and do not have an official closing price but their valuation inputs are based on observable market data. Pricing vendors calculate bond valuations using financial models and matrices. The models use observable inputs including yields on benchmark securities, quotes by securities brokers, rating agency actions, discounts or premiums on securities compared to par prices, changes in yields for U.S. Treasury securities, corporate actions by bond issuers, prepayment schedules and histories, economic events and, for certain securities, adjustments to yields to reflect changes in the rate of inflation. Other securities with model-derived valuation inputs that are observable are also classified as Level 2 investments. Investments with unobservable valuation inputs are classified as Level 3 investments. |
Fair Values of Long-term Debt | Fair Value Measurements of Long-term Debt The fair values of Long-term Debt are based on quoted market prices, without credit enhancements, for the same or similar issues and the current interest rates offered for instruments with similar maturities classified as Level 2 measurement inputs. These instruments are not marked-to-market. The estimates presented are not necessarily indicative of the amounts that could be realized in a current market exchange. |
Trust Assets for Decommissioning and Spent Nuclear Fuel Disposal | Fair Value Measurements of Trust Assets for Decommissioning and SNF Disposal (Applies to AEP and I&M) Nuclear decommissioning and spent nuclear fuel trust funds represent funds that regulatory commissions allow I&M to collect through rates to fund future decommissioning and spent nuclear fuel disposal liabilities. By rules or orders, the IURC, the MPSC and the FERC established investment limitations and general risk management guidelines. In general, limitations include: • Acceptable investments (rated investment grade or above when purchased). • Maximum percentage invested in a specific type of investment. • Prohibition of investment in obligations of AEP, I&M or their affiliates. • Withdrawals permitted only for payment of decommissioning costs and trust expenses. I&M maintains trust records for each regulatory jurisdiction. Regulatory approval is required to withdraw decommissioning funds. These funds are managed by external investment managers who must comply with the guidelines and rules of the applicable regulatory authorities. The trust assets are invested to optimize the net of tax earnings of the trust giving consideration to liquidity, risk, diversification and other prudent investment objectives. I&M records securities held in these trust funds in Spent Nuclear Fuel and Decommissioning Trusts on its balance sheets. I&M records these securities at fair value. I&M classifies securities in the trust funds as available-for-sale due to their long-term purpose. Other-than-temporary impairments for investments in both debt and equity securities are considered realized losses as a result of securities being managed by an external investment management firm. The external investment management firm makes specific investment decisions regarding the debt and equity investments held in these trusts and generally intends to sell debt securities in an unrealized loss position as part of a tax optimization strategy. Impairments reduce the cost basis of the securities which will affect any future unrealized gain or realized gain or loss due to the adjusted cost of investment. I&M records unrealized gains and other-than-temporary impairments from securities in these trust funds as adjustments to the regulatory liability account for the nuclear decommissioning trust funds and to regulatory assets or liabilities for the SNF disposal trust funds in accordance with their treatment in rates. Consequently, changes in fair value of trust assets do not affect earnings or AOCI. |
Fair Value Assets and Liabilities Measured on Recurring Basis | As required by the accounting guidance for “Fair Value Measurements and Disclosures,” financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Management’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. There have not been any significant changes in management’s valuation techniques. |
Ohio Power Co [Member] | |
Valuation Techniques | Fair Value Hierarchy and Valuation Techniques The accounting guidance for “Fair Value Measurements and Disclosures” establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2. When quoted market prices are not available, pricing may be completed using comparable securities, dealer values, operating data and general market conditions to determine fair value. Valuation models utilize various inputs such as commodity, interest rate and, to a lesser degree, volatility and credit that include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, market corroborated inputs (i.e. inputs derived principally from, or correlated to, observable market data) and other observable inputs for the asset or liability. The amount of risk taken is determined by the Commercial Operations, Energy Supply and Finance groups in accordance with established risk management policies as approved by the Finance Committee of AEP’s Board of Directors. AEPSC’s market risk oversight staff independently monitors risk policies, procedures and risk levels and provides members of the Commercial Operations Risk Committee (Regulated Risk Committee) and the Energy Supply Risk Committee (Competitive Risk Committee) various reports regarding compliance with policies, limits and procedures. The Regulated Risk Committee consists of AEPSC’s Chief Operating Officer, Chief Financial Officer, Executive Vice President of Generation, Senior Vice President of Commercial Operations and Chief Risk Officer. The Competitive Risk Committee consists of AEPSC’s Chief Operating Officer, Chief Financial Officer and Chief Risk Officer in addition to Energy Supply’s President and Vice President. For commercial activities, exchange traded derivatives, namely futures contracts, are generally fair valued based on unadjusted quoted prices in active markets and are classified as Level 1. Level 2 inputs primarily consist of OTC broker quotes in moderately active or less active markets, as well as exchange traded contracts where there is insufficient market liquidity to warrant inclusion in Level 1. Management verifies price curves using these broker quotes and classifies these fair values within Level 2 when substantially all of the fair value can be corroborated. Management typically obtains multiple broker quotes, which are nonbinding in nature but are based on recent trades in the marketplace. When multiple broker quotes are obtained, the quoted bid and ask prices are averaged. In certain circumstances, a broker quote may be discarded if it is a clear outlier. Management uses a historical correlation analysis between the broker quoted location and the illiquid locations. If the points are highly correlated, these locations are included within Level 2 as well. Certain OTC and bilaterally executed derivative instruments are executed in less active markets with a lower availability of pricing information. Illiquid transactions, complex structured transactions, FTRs and counterparty credit risk may require nonmarket based inputs. Some of these inputs may be internally developed or extrapolated and utilized to estimate fair value. When such inputs have a significant impact on the measurement of fair value, the instrument is categorized as Level 3. The main driver of contracts being classified as Level 3 is the inability to substantiate energy price curves in the market. A portion of the Level 3 instruments have been economically hedged which limits potential earnings volatility. AEP utilizes its trustee’s external pricing service to estimate the fair value of the underlying investments held in the nuclear trusts. AEP’s investment managers review and validate the prices utilized by the trustee to determine fair value. AEP’s management performs its own valuation testing to verify the fair values of the securities. AEP receives audit reports of the trustee’s operating controls and valuation processes. The trustee uses multiple pricing vendors for the assets held in the trusts. Assets in the nuclear trusts, Cash and Cash Equivalents, Other Temporary Investments and Restricted Cash for Securitized Funding are classified using the following methods. Equities are classified as Level 1 holdings if they are actively traded on exchanges. Items classified as Level 1 are investments in money market funds, fixed income and equity mutual funds and domestic equity securities. They are valued based on observable inputs, primarily unadjusted quoted prices in active markets for identical assets. Items classified as Level 2 are primarily investments in individual fixed income securities and cash equivalent funds. Fixed income securities generally do not trade on exchanges and do not have an official closing price but their valuation inputs are based on observable market data. Pricing vendors calculate bond valuations using financial models and matrices. The models use observable inputs including yields on benchmark securities, quotes by securities brokers, rating agency actions, discounts or premiums on securities compared to par prices, changes in yields for U.S. Treasury securities, corporate actions by bond issuers, prepayment schedules and histories, economic events and, for certain securities, adjustments to yields to reflect changes in the rate of inflation. Other securities with model-derived valuation inputs that are observable are also classified as Level 2 investments. Investments with unobservable valuation inputs are classified as Level 3 investments. |
Fair Values of Long-term Debt | Fair Value Measurements of Long-term Debt The fair values of Long-term Debt are based on quoted market prices, without credit enhancements, for the same or similar issues and the current interest rates offered for instruments with similar maturities classified as Level 2 measurement inputs. These instruments are not marked-to-market. The estimates presented are not necessarily indicative of the amounts that could be realized in a current market exchange. |
Fair Value Assets and Liabilities Measured on Recurring Basis | As required by the accounting guidance for “Fair Value Measurements and Disclosures,” financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Management’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. There have not been any significant changes in management’s valuation techniques. |
Public Service Co Of Oklahoma [Member] | |
Valuation Techniques | Fair Value Hierarchy and Valuation Techniques The accounting guidance for “Fair Value Measurements and Disclosures” establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2. When quoted market prices are not available, pricing may be completed using comparable securities, dealer values, operating data and general market conditions to determine fair value. Valuation models utilize various inputs such as commodity, interest rate and, to a lesser degree, volatility and credit that include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, market corroborated inputs (i.e. inputs derived principally from, or correlated to, observable market data) and other observable inputs for the asset or liability. The amount of risk taken is determined by the Commercial Operations, Energy Supply and Finance groups in accordance with established risk management policies as approved by the Finance Committee of AEP’s Board of Directors. AEPSC’s market risk oversight staff independently monitors risk policies, procedures and risk levels and provides members of the Commercial Operations Risk Committee (Regulated Risk Committee) and the Energy Supply Risk Committee (Competitive Risk Committee) various reports regarding compliance with policies, limits and procedures. The Regulated Risk Committee consists of AEPSC’s Chief Operating Officer, Chief Financial Officer, Executive Vice President of Generation, Senior Vice President of Commercial Operations and Chief Risk Officer. The Competitive Risk Committee consists of AEPSC’s Chief Operating Officer, Chief Financial Officer and Chief Risk Officer in addition to Energy Supply’s President and Vice President. For commercial activities, exchange traded derivatives, namely futures contracts, are generally fair valued based on unadjusted quoted prices in active markets and are classified as Level 1. Level 2 inputs primarily consist of OTC broker quotes in moderately active or less active markets, as well as exchange traded contracts where there is insufficient market liquidity to warrant inclusion in Level 1. Management verifies price curves using these broker quotes and classifies these fair values within Level 2 when substantially all of the fair value can be corroborated. Management typically obtains multiple broker quotes, which are nonbinding in nature but are based on recent trades in the marketplace. When multiple broker quotes are obtained, the quoted bid and ask prices are averaged. In certain circumstances, a broker quote may be discarded if it is a clear outlier. Management uses a historical correlation analysis between the broker quoted location and the illiquid locations. If the points are highly correlated, these locations are included within Level 2 as well. Certain OTC and bilaterally executed derivative instruments are executed in less active markets with a lower availability of pricing information. Illiquid transactions, complex structured transactions, FTRs and counterparty credit risk may require nonmarket based inputs. Some of these inputs may be internally developed or extrapolated and utilized to estimate fair value. When such inputs have a significant impact on the measurement of fair value, the instrument is categorized as Level 3. The main driver of contracts being classified as Level 3 is the inability to substantiate energy price curves in the market. A portion of the Level 3 instruments have been economically hedged which limits potential earnings volatility. AEP utilizes its trustee’s external pricing service to estimate the fair value of the underlying investments held in the nuclear trusts. AEP’s investment managers review and validate the prices utilized by the trustee to determine fair value. AEP’s management performs its own valuation testing to verify the fair values of the securities. AEP receives audit reports of the trustee’s operating controls and valuation processes. The trustee uses multiple pricing vendors for the assets held in the trusts. Assets in the nuclear trusts, Cash and Cash Equivalents, Other Temporary Investments and Restricted Cash for Securitized Funding are classified using the following methods. Equities are classified as Level 1 holdings if they are actively traded on exchanges. Items classified as Level 1 are investments in money market funds, fixed income and equity mutual funds and domestic equity securities. They are valued based on observable inputs, primarily unadjusted quoted prices in active markets for identical assets. Items classified as Level 2 are primarily investments in individual fixed income securities and cash equivalent funds. Fixed income securities generally do not trade on exchanges and do not have an official closing price but their valuation inputs are based on observable market data. Pricing vendors calculate bond valuations using financial models and matrices. The models use observable inputs including yields on benchmark securities, quotes by securities brokers, rating agency actions, discounts or premiums on securities compared to par prices, changes in yields for U.S. Treasury securities, corporate actions by bond issuers, prepayment schedules and histories, economic events and, for certain securities, adjustments to yields to reflect changes in the rate of inflation. Other securities with model-derived valuation inputs that are observable are also classified as Level 2 investments. Investments with unobservable valuation inputs are classified as Level 3 investments. |
Fair Values of Long-term Debt | Fair Value Measurements of Long-term Debt The fair values of Long-term Debt are based on quoted market prices, without credit enhancements, for the same or similar issues and the current interest rates offered for instruments with similar maturities classified as Level 2 measurement inputs. These instruments are not marked-to-market. The estimates presented are not necessarily indicative of the amounts that could be realized in a current market exchange. |
Fair Value Assets and Liabilities Measured on Recurring Basis | As required by the accounting guidance for “Fair Value Measurements and Disclosures,” financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Management’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. There have not been any significant changes in management’s valuation techniques. |
Southwestern Electric Power Co [Member] | |
Valuation Techniques | Fair Value Hierarchy and Valuation Techniques The accounting guidance for “Fair Value Measurements and Disclosures” establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2. When quoted market prices are not available, pricing may be completed using comparable securities, dealer values, operating data and general market conditions to determine fair value. Valuation models utilize various inputs such as commodity, interest rate and, to a lesser degree, volatility and credit that include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, market corroborated inputs (i.e. inputs derived principally from, or correlated to, observable market data) and other observable inputs for the asset or liability. The amount of risk taken is determined by the Commercial Operations, Energy Supply and Finance groups in accordance with established risk management policies as approved by the Finance Committee of AEP’s Board of Directors. AEPSC’s market risk oversight staff independently monitors risk policies, procedures and risk levels and provides members of the Commercial Operations Risk Committee (Regulated Risk Committee) and the Energy Supply Risk Committee (Competitive Risk Committee) various reports regarding compliance with policies, limits and procedures. The Regulated Risk Committee consists of AEPSC’s Chief Operating Officer, Chief Financial Officer, Executive Vice President of Generation, Senior Vice President of Commercial Operations and Chief Risk Officer. The Competitive Risk Committee consists of AEPSC’s Chief Operating Officer, Chief Financial Officer and Chief Risk Officer in addition to Energy Supply’s President and Vice President. For commercial activities, exchange traded derivatives, namely futures contracts, are generally fair valued based on unadjusted quoted prices in active markets and are classified as Level 1. Level 2 inputs primarily consist of OTC broker quotes in moderately active or less active markets, as well as exchange traded contracts where there is insufficient market liquidity to warrant inclusion in Level 1. Management verifies price curves using these broker quotes and classifies these fair values within Level 2 when substantially all of the fair value can be corroborated. Management typically obtains multiple broker quotes, which are nonbinding in nature but are based on recent trades in the marketplace. When multiple broker quotes are obtained, the quoted bid and ask prices are averaged. In certain circumstances, a broker quote may be discarded if it is a clear outlier. Management uses a historical correlation analysis between the broker quoted location and the illiquid locations. If the points are highly correlated, these locations are included within Level 2 as well. Certain OTC and bilaterally executed derivative instruments are executed in less active markets with a lower availability of pricing information. Illiquid transactions, complex structured transactions, FTRs and counterparty credit risk may require nonmarket based inputs. Some of these inputs may be internally developed or extrapolated and utilized to estimate fair value. When such inputs have a significant impact on the measurement of fair value, the instrument is categorized as Level 3. The main driver of contracts being classified as Level 3 is the inability to substantiate energy price curves in the market. A portion of the Level 3 instruments have been economically hedged which limits potential earnings volatility. AEP utilizes its trustee’s external pricing service to estimate the fair value of the underlying investments held in the nuclear trusts. AEP’s investment managers review and validate the prices utilized by the trustee to determine fair value. AEP’s management performs its own valuation testing to verify the fair values of the securities. AEP receives audit reports of the trustee’s operating controls and valuation processes. The trustee uses multiple pricing vendors for the assets held in the trusts. Assets in the nuclear trusts, Cash and Cash Equivalents, Other Temporary Investments and Restricted Cash for Securitized Funding are classified using the following methods. Equities are classified as Level 1 holdings if they are actively traded on exchanges. Items classified as Level 1 are investments in money market funds, fixed income and equity mutual funds and domestic equity securities. They are valued based on observable inputs, primarily unadjusted quoted prices in active markets for identical assets. Items classified as Level 2 are primarily investments in individual fixed income securities and cash equivalent funds. Fixed income securities generally do not trade on exchanges and do not have an official closing price but their valuation inputs are based on observable market data. Pricing vendors calculate bond valuations using financial models and matrices. The models use observable inputs including yields on benchmark securities, quotes by securities brokers, rating agency actions, discounts or premiums on securities compared to par prices, changes in yields for U.S. Treasury securities, corporate actions by bond issuers, prepayment schedules and histories, economic events and, for certain securities, adjustments to yields to reflect changes in the rate of inflation. Other securities with model-derived valuation inputs that are observable are also classified as Level 2 investments. Investments with unobservable valuation inputs are classified as Level 3 investments. |
Fair Values of Long-term Debt | Fair Value Measurements of Long-term Debt The fair values of Long-term Debt are based on quoted market prices, without credit enhancements, for the same or similar issues and the current interest rates offered for instruments with similar maturities classified as Level 2 measurement inputs. These instruments are not marked-to-market. The estimates presented are not necessarily indicative of the amounts that could be realized in a current market exchange. |
Fair Value Assets and Liabilities Measured on Recurring Basis | As required by the accounting guidance for “Fair Value Measurements and Disclosures,” financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Management’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. There have not been any significant changes in management’s valuation techniques. |
Income Taxes (Policies)
Income Taxes (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Policy | AEP System Tax Allocation Agreement AEP and subsidiaries join in the filing of a consolidated federal income tax return. The allocation of the AEP System’s current consolidated federal income tax to the AEP System companies allocates the benefit of current tax losses to the AEP System companies giving rise to such losses in determining their current tax expense. The tax benefit of the Parent is allocated to its subsidiaries with taxable income. With the exception of the loss of the Parent, the method of allocation reflects a separate return result for each company in the consolidated group. |
Appalachian Power Co [Member] | |
Income Tax Policy | AEP System Tax Allocation Agreement AEP and subsidiaries join in the filing of a consolidated federal income tax return. The allocation of the AEP System’s current consolidated federal income tax to the AEP System companies allocates the benefit of current tax losses to the AEP System companies giving rise to such losses in determining their current tax expense. The tax benefit of the Parent is allocated to its subsidiaries with taxable income. With the exception of the loss of the Parent, the method of allocation reflects a separate return result for each company in the consolidated group. |
Indiana Michigan Power Co [Member] | |
Income Tax Policy | AEP System Tax Allocation Agreement AEP and subsidiaries join in the filing of a consolidated federal income tax return. The allocation of the AEP System’s current consolidated federal income tax to the AEP System companies allocates the benefit of current tax losses to the AEP System companies giving rise to such losses in determining their current tax expense. The tax benefit of the Parent is allocated to its subsidiaries with taxable income. With the exception of the loss of the Parent, the method of allocation reflects a separate return result for each company in the consolidated group. |
Ohio Power Co [Member] | |
Income Tax Policy | AEP System Tax Allocation Agreement AEP and subsidiaries join in the filing of a consolidated federal income tax return. The allocation of the AEP System’s current consolidated federal income tax to the AEP System companies allocates the benefit of current tax losses to the AEP System companies giving rise to such losses in determining their current tax expense. The tax benefit of the Parent is allocated to its subsidiaries with taxable income. With the exception of the loss of the Parent, the method of allocation reflects a separate return result for each company in the consolidated group. |
Public Service Co Of Oklahoma [Member] | |
Income Tax Policy | AEP System Tax Allocation Agreement AEP and subsidiaries join in the filing of a consolidated federal income tax return. The allocation of the AEP System’s current consolidated federal income tax to the AEP System companies allocates the benefit of current tax losses to the AEP System companies giving rise to such losses in determining their current tax expense. The tax benefit of the Parent is allocated to its subsidiaries with taxable income. With the exception of the loss of the Parent, the method of allocation reflects a separate return result for each company in the consolidated group. |
Southwestern Electric Power Co [Member] | |
Income Tax Policy | AEP System Tax Allocation Agreement AEP and subsidiaries join in the filing of a consolidated federal income tax return. The allocation of the AEP System’s current consolidated federal income tax to the AEP System companies allocates the benefit of current tax losses to the AEP System companies giving rise to such losses in determining their current tax expense. The tax benefit of the Parent is allocated to its subsidiaries with taxable income. With the exception of the loss of the Parent, the method of allocation reflects a separate return result for each company in the consolidated group. |
Variable Interest Entities (Pol
Variable Interest Entities (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Variable Interest Entities | The accounting guidance for “Variable Interest Entities” is a consolidation model that considers if a company has a controlling financial interest in a VIE. A controlling financial interest will have both (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. Entities are required to consolidate a VIE when it is determined that they have a controlling financial interest in a VIE and therefore, are the primary beneficiary of that VIE, as defined by the accounting guidance for “Variable Interest Entities.” In determining whether AEP is the primary beneficiary of a VIE, management considers factors such as equity at risk, the amount of the VIE’s variability AEP absorbs, guarantees of indebtedness, voting rights including kick-out rights, the power to direct the VIE, variable interests held by related parties and other factors. Management believes that significant assumptions and judgments were applied consistently. |
Appalachian Power Co [Member] | |
Variable Interest Entities | The accounting guidance for “Variable Interest Entities” is a consolidation model that considers if a company has a controlling financial interest in a VIE. A controlling financial interest will have both (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. Entities are required to consolidate a VIE when it is determined that they have a controlling financial interest in a VIE and therefore, are the primary beneficiary of that VIE, as defined by the accounting guidance for “Variable Interest Entities.” In determining whether AEP is the primary beneficiary of a VIE, management considers factors such as equity at risk, the amount of the VIE’s variability AEP absorbs, guarantees of indebtedness, voting rights including kick-out rights, the power to direct the VIE, variable interests held by related parties and other factors. Management believes that significant assumptions and judgments were applied consistently. |
Indiana Michigan Power Co [Member] | |
Variable Interest Entities | The accounting guidance for “Variable Interest Entities” is a consolidation model that considers if a company has a controlling financial interest in a VIE. A controlling financial interest will have both (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. Entities are required to consolidate a VIE when it is determined that they have a controlling financial interest in a VIE and therefore, are the primary beneficiary of that VIE, as defined by the accounting guidance for “Variable Interest Entities.” In determining whether AEP is the primary beneficiary of a VIE, management considers factors such as equity at risk, the amount of the VIE’s variability AEP absorbs, guarantees of indebtedness, voting rights including kick-out rights, the power to direct the VIE, variable interests held by related parties and other factors. Management believes that significant assumptions and judgments were applied consistently. |
Ohio Power Co [Member] | |
Variable Interest Entities | The accounting guidance for “Variable Interest Entities” is a consolidation model that considers if a company has a controlling financial interest in a VIE. A controlling financial interest will have both (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. Entities are required to consolidate a VIE when it is determined that they have a controlling financial interest in a VIE and therefore, are the primary beneficiary of that VIE, as defined by the accounting guidance for “Variable Interest Entities.” In determining whether AEP is the primary beneficiary of a VIE, management considers factors such as equity at risk, the amount of the VIE’s variability AEP absorbs, guarantees of indebtedness, voting rights including kick-out rights, the power to direct the VIE, variable interests held by related parties and other factors. Management believes that significant assumptions and judgments were applied consistently. |
Public Service Co Of Oklahoma [Member] | |
Variable Interest Entities | The accounting guidance for “Variable Interest Entities” is a consolidation model that considers if a company has a controlling financial interest in a VIE. A controlling financial interest will have both (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. Entities are required to consolidate a VIE when it is determined that they have a controlling financial interest in a VIE and therefore, are the primary beneficiary of that VIE, as defined by the accounting guidance for “Variable Interest Entities.” In determining whether AEP is the primary beneficiary of a VIE, management considers factors such as equity at risk, the amount of the VIE’s variability AEP absorbs, guarantees of indebtedness, voting rights including kick-out rights, the power to direct the VIE, variable interests held by related parties and other factors. Management believes that significant assumptions and judgments were applied consistently. |
Southwestern Electric Power Co [Member] | |
Variable Interest Entities | The accounting guidance for “Variable Interest Entities” is a consolidation model that considers if a company has a controlling financial interest in a VIE. A controlling financial interest will have both (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. Entities are required to consolidate a VIE when it is determined that they have a controlling financial interest in a VIE and therefore, are the primary beneficiary of that VIE, as defined by the accounting guidance for “Variable Interest Entities.” In determining whether AEP is the primary beneficiary of a VIE, management considers factors such as equity at risk, the amount of the VIE’s variability AEP absorbs, guarantees of indebtedness, voting rights including kick-out rights, the power to direct the VIE, variable interests held by related parties and other factors. Management believes that significant assumptions and judgments were applied consistently. |
Significant Accounting Matter27
Significant Accounting Matters (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Basic and Diluted EPS Calculations | Three Months Ended March 31, 2016 2015 (in millions, except per share data) $/share $/share Income from Continuing Operations $ 503.1 $ 620.2 Less: Net Income Attributable to Noncontrolling Interests 1.9 1.5 Earnings Attributable to AEP Common Shareholders from Continuing Operations $ 501.2 $ 618.7 Weighted Average Number of Basic Shares Outstanding 491.1 $ 1.02 489.6 $ 1.27 Weighted Average Dilutive Effect of Restricted Stock Units 0.2 — 0.3 — Weighted Average Number of Diluted Shares Outstanding 491.3 $ 1.02 489.9 $ 1.27 |
Comprehensive Income (Tables)
Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Changes in Accumulated Other Comprehensive Income (Loss) by Component | AEP Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Commodity Interest Rate and Foreign Currency Securities Available for Sale Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (5.2 ) $ (17.2 ) $ 7.1 $ (111.8 ) $ (127.1 ) Change in Fair Value Recognized in AOCI (8.1 ) — 0.6 — (7.5 ) Amount of (Gain) Loss Reclassified from AOCI Generation & Marketing Revenues (8.6 ) — — — (8.6 ) Purchased Electricity for Resale 9.2 — — — 9.2 Interest Expense — 0.5 — — 0.5 Amortization of Prior Service Cost (Credit) — — — (4.9 ) (4.9 ) Amortization of Actuarial (Gains)/Losses — — — 5.1 5.1 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.6 0.5 — 0.2 1.3 Income Tax (Expense) Credit 0.2 0.2 — 0.1 0.5 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.4 0.3 — 0.1 0.8 Net Current Period Other Comprehensive Income (Loss) (7.7 ) 0.3 0.6 0.1 (6.7 ) Balance in AOCI as of March 31, 2016 $ (12.9 ) $ (16.9 ) $ 7.7 $ (111.7 ) $ (133.8 ) AEP Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Commodity Interest Rate and Foreign Currency Securities Available for Sale Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ 1.6 $ (19.1 ) $ 7.7 $ (93.3 ) $ (103.1 ) Change in Fair Value Recognized in AOCI 0.7 (0.1 ) 0.5 — 1.1 Amount of (Gain) Loss Reclassified from AOCI Generation & Marketing Revenues (12.7 ) — — — (12.7 ) Purchased Electricity for Resale 0.7 — — — 0.7 Interest Expense — 1.2 — — 1.2 Amortization of Prior Service Cost (Credit) — — — (4.8 ) (4.8 ) Amortization of Actuarial (Gains)/Losses — — — 5.3 5.3 Reclassifications from AOCI, before Income Tax (Expense) Credit (12.0 ) 1.2 — 0.5 (10.3 ) Income Tax (Expense) Credit (4.2 ) 0.4 — 0.1 (3.7 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (7.8 ) 0.8 — 0.4 (6.6 ) Net Current Period Other Comprehensive Income (Loss) (7.1 ) 0.7 0.5 0.4 (5.5 ) Pension and OPEB Adjustment Related to Mitchell Plant — — — 5.1 5.1 Balance in AOCI as of March 31, 2015 $ (5.5 ) $ (18.4 ) $ 8.2 $ (87.8 ) $ (103.5 ) APCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ 3.6 $ (6.4 ) $ (2.8 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) — (0.3 ) Amortization of Prior Service Cost (Credit) — (1.2 ) (1.2 ) Amortization of Actuarial (Gains)/Losses — 0.7 0.7 Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) (0.5 ) (0.8 ) Income Tax (Expense) Credit (0.1 ) (0.2 ) (0.3 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) (0.3 ) (0.5 ) Net Current Period Other Comprehensive Income (Loss) (0.2 ) (0.3 ) (0.5 ) Balance in AOCI as of March 31, 2016 $ 3.4 $ (6.7 ) $ (3.3 ) APCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ 3.9 $ 1.1 $ 5.0 Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.2 — 0.2 Amortization of Prior Service Cost (Credit) — (1.3 ) (1.3 ) Amortization of Actuarial (Gains)/Losses — 0.6 0.6 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.2 (0.7 ) (0.5 ) Income Tax (Expense) Credit 0.1 (0.3 ) (0.2 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.1 (0.4 ) (0.3 ) Net Current Period Other Comprehensive Income (Loss) 0.1 (0.4 ) (0.3 ) Balance in AOCI as of March 31, 2015 $ 4.0 $ 0.7 $ 4.7 I&M Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (13.3 ) $ (3.4 ) $ (16.7 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.5 — 0.5 Amortization of Prior Service Cost (Credit) — (0.2 ) (0.2 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.5 — 0.5 Income Tax (Expense) Credit 0.1 — 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.4 — 0.4 Net Current Period Other Comprehensive Income (Loss) 0.4 — 0.4 Balance in AOCI as of March 31, 2016 $ (12.9 ) $ (3.4 ) $ (16.3 ) I&M Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ (14.4 ) $ 0.1 $ (14.3 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.4 — 0.4 Amortization of Prior Service Cost (Credit) — (0.2 ) (0.2 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.4 — 0.4 Income Tax (Expense) Credit 0.1 — 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.3 — 0.3 Net Current Period Other Comprehensive Income (Loss) 0.3 — 0.3 Balance in AOCI as of March 31, 2015 $ (14.1 ) $ 0.1 $ (14.0 ) OPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2015 $ 4.3 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.5 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.5 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.4 ) Net Current Period Other Comprehensive Loss (0.4 ) Balance in AOCI as of March 31, 2016 $ 3.9 OPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2014 $ 5.6 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.5 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.5 ) Income Tax (Expense) Credit (0.2 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.3 ) Net Current Period Other Comprehensive Loss (0.3 ) Balance in AOCI as of March 31, 2015 $ 5.3 PSO Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2015 $ 4.2 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) Net Current Period Other Comprehensive Loss (0.2 ) Balance in AOCI as of March 31, 2016 $ 4.0 PSO Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2014 $ 5.0 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) Net Current Period Other Comprehensive Loss (0.2 ) Balance in AOCI as of March 31, 2015 $ 4.8 SWEPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (9.1 ) $ (0.3 ) $ (9.4 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.7 — 0.7 Amortization of Prior Service Cost (Credit) — (0.5 ) (0.5 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.7 (0.3 ) 0.4 Income Tax (Expense) Credit 0.2 (0.1 ) 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.5 (0.2 ) 0.3 Net Current Period Other Comprehensive Income (Loss) 0.5 (0.2 ) 0.3 Balance in AOCI as of March 31, 2016 $ (8.6 ) $ (0.5 ) $ (9.1 ) SWEPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ (11.1 ) $ 3.6 $ (7.5 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.9 — 0.9 Amortization of Prior Service Cost (Credit) — (0.5 ) (0.5 ) Amortization of Actuarial (Gains)/Losses — 0.1 0.1 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.9 (0.4 ) 0.5 Income Tax (Expense) Credit 0.3 (0.1 ) 0.2 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.6 (0.3 ) 0.3 Net Current Period Other Comprehensive Income (Loss) 0.6 (0.3 ) 0.3 Balance in AOCI as of March 31, 2015 $ (10.5 ) $ 3.3 $ (7.2 ) |
Appalachian Power Co [Member] | |
Changes in Accumulated Other Comprehensive Income (Loss) by Component | AEP Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Commodity Interest Rate and Foreign Currency Securities Available for Sale Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (5.2 ) $ (17.2 ) $ 7.1 $ (111.8 ) $ (127.1 ) Change in Fair Value Recognized in AOCI (8.1 ) — 0.6 — (7.5 ) Amount of (Gain) Loss Reclassified from AOCI Generation & Marketing Revenues (8.6 ) — — — (8.6 ) Purchased Electricity for Resale 9.2 — — — 9.2 Interest Expense — 0.5 — — 0.5 Amortization of Prior Service Cost (Credit) — — — (4.9 ) (4.9 ) Amortization of Actuarial (Gains)/Losses — — — 5.1 5.1 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.6 0.5 — 0.2 1.3 Income Tax (Expense) Credit 0.2 0.2 — 0.1 0.5 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.4 0.3 — 0.1 0.8 Net Current Period Other Comprehensive Income (Loss) (7.7 ) 0.3 0.6 0.1 (6.7 ) Balance in AOCI as of March 31, 2016 $ (12.9 ) $ (16.9 ) $ 7.7 $ (111.7 ) $ (133.8 ) AEP Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Commodity Interest Rate and Foreign Currency Securities Available for Sale Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ 1.6 $ (19.1 ) $ 7.7 $ (93.3 ) $ (103.1 ) Change in Fair Value Recognized in AOCI 0.7 (0.1 ) 0.5 — 1.1 Amount of (Gain) Loss Reclassified from AOCI Generation & Marketing Revenues (12.7 ) — — — (12.7 ) Purchased Electricity for Resale 0.7 — — — 0.7 Interest Expense — 1.2 — — 1.2 Amortization of Prior Service Cost (Credit) — — — (4.8 ) (4.8 ) Amortization of Actuarial (Gains)/Losses — — — 5.3 5.3 Reclassifications from AOCI, before Income Tax (Expense) Credit (12.0 ) 1.2 — 0.5 (10.3 ) Income Tax (Expense) Credit (4.2 ) 0.4 — 0.1 (3.7 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (7.8 ) 0.8 — 0.4 (6.6 ) Net Current Period Other Comprehensive Income (Loss) (7.1 ) 0.7 0.5 0.4 (5.5 ) Pension and OPEB Adjustment Related to Mitchell Plant — — — 5.1 5.1 Balance in AOCI as of March 31, 2015 $ (5.5 ) $ (18.4 ) $ 8.2 $ (87.8 ) $ (103.5 ) APCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ 3.6 $ (6.4 ) $ (2.8 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) — (0.3 ) Amortization of Prior Service Cost (Credit) — (1.2 ) (1.2 ) Amortization of Actuarial (Gains)/Losses — 0.7 0.7 Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) (0.5 ) (0.8 ) Income Tax (Expense) Credit (0.1 ) (0.2 ) (0.3 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) (0.3 ) (0.5 ) Net Current Period Other Comprehensive Income (Loss) (0.2 ) (0.3 ) (0.5 ) Balance in AOCI as of March 31, 2016 $ 3.4 $ (6.7 ) $ (3.3 ) APCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ 3.9 $ 1.1 $ 5.0 Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.2 — 0.2 Amortization of Prior Service Cost (Credit) — (1.3 ) (1.3 ) Amortization of Actuarial (Gains)/Losses — 0.6 0.6 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.2 (0.7 ) (0.5 ) Income Tax (Expense) Credit 0.1 (0.3 ) (0.2 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.1 (0.4 ) (0.3 ) Net Current Period Other Comprehensive Income (Loss) 0.1 (0.4 ) (0.3 ) Balance in AOCI as of March 31, 2015 $ 4.0 $ 0.7 $ 4.7 I&M Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (13.3 ) $ (3.4 ) $ (16.7 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.5 — 0.5 Amortization of Prior Service Cost (Credit) — (0.2 ) (0.2 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.5 — 0.5 Income Tax (Expense) Credit 0.1 — 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.4 — 0.4 Net Current Period Other Comprehensive Income (Loss) 0.4 — 0.4 Balance in AOCI as of March 31, 2016 $ (12.9 ) $ (3.4 ) $ (16.3 ) I&M Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ (14.4 ) $ 0.1 $ (14.3 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.4 — 0.4 Amortization of Prior Service Cost (Credit) — (0.2 ) (0.2 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.4 — 0.4 Income Tax (Expense) Credit 0.1 — 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.3 — 0.3 Net Current Period Other Comprehensive Income (Loss) 0.3 — 0.3 Balance in AOCI as of March 31, 2015 $ (14.1 ) $ 0.1 $ (14.0 ) OPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2015 $ 4.3 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.5 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.5 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.4 ) Net Current Period Other Comprehensive Loss (0.4 ) Balance in AOCI as of March 31, 2016 $ 3.9 OPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2014 $ 5.6 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.5 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.5 ) Income Tax (Expense) Credit (0.2 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.3 ) Net Current Period Other Comprehensive Loss (0.3 ) Balance in AOCI as of March 31, 2015 $ 5.3 PSO Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2015 $ 4.2 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) Net Current Period Other Comprehensive Loss (0.2 ) Balance in AOCI as of March 31, 2016 $ 4.0 PSO Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2014 $ 5.0 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) Net Current Period Other Comprehensive Loss (0.2 ) Balance in AOCI as of March 31, 2015 $ 4.8 SWEPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (9.1 ) $ (0.3 ) $ (9.4 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.7 — 0.7 Amortization of Prior Service Cost (Credit) — (0.5 ) (0.5 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.7 (0.3 ) 0.4 Income Tax (Expense) Credit 0.2 (0.1 ) 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.5 (0.2 ) 0.3 Net Current Period Other Comprehensive Income (Loss) 0.5 (0.2 ) 0.3 Balance in AOCI as of March 31, 2016 $ (8.6 ) $ (0.5 ) $ (9.1 ) SWEPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ (11.1 ) $ 3.6 $ (7.5 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.9 — 0.9 Amortization of Prior Service Cost (Credit) — (0.5 ) (0.5 ) Amortization of Actuarial (Gains)/Losses — 0.1 0.1 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.9 (0.4 ) 0.5 Income Tax (Expense) Credit 0.3 (0.1 ) 0.2 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.6 (0.3 ) 0.3 Net Current Period Other Comprehensive Income (Loss) 0.6 (0.3 ) 0.3 Balance in AOCI as of March 31, 2015 $ (10.5 ) $ 3.3 $ (7.2 ) |
Indiana Michigan Power Co [Member] | |
Changes in Accumulated Other Comprehensive Income (Loss) by Component | AEP Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Commodity Interest Rate and Foreign Currency Securities Available for Sale Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (5.2 ) $ (17.2 ) $ 7.1 $ (111.8 ) $ (127.1 ) Change in Fair Value Recognized in AOCI (8.1 ) — 0.6 — (7.5 ) Amount of (Gain) Loss Reclassified from AOCI Generation & Marketing Revenues (8.6 ) — — — (8.6 ) Purchased Electricity for Resale 9.2 — — — 9.2 Interest Expense — 0.5 — — 0.5 Amortization of Prior Service Cost (Credit) — — — (4.9 ) (4.9 ) Amortization of Actuarial (Gains)/Losses — — — 5.1 5.1 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.6 0.5 — 0.2 1.3 Income Tax (Expense) Credit 0.2 0.2 — 0.1 0.5 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.4 0.3 — 0.1 0.8 Net Current Period Other Comprehensive Income (Loss) (7.7 ) 0.3 0.6 0.1 (6.7 ) Balance in AOCI as of March 31, 2016 $ (12.9 ) $ (16.9 ) $ 7.7 $ (111.7 ) $ (133.8 ) AEP Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Commodity Interest Rate and Foreign Currency Securities Available for Sale Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ 1.6 $ (19.1 ) $ 7.7 $ (93.3 ) $ (103.1 ) Change in Fair Value Recognized in AOCI 0.7 (0.1 ) 0.5 — 1.1 Amount of (Gain) Loss Reclassified from AOCI Generation & Marketing Revenues (12.7 ) — — — (12.7 ) Purchased Electricity for Resale 0.7 — — — 0.7 Interest Expense — 1.2 — — 1.2 Amortization of Prior Service Cost (Credit) — — — (4.8 ) (4.8 ) Amortization of Actuarial (Gains)/Losses — — — 5.3 5.3 Reclassifications from AOCI, before Income Tax (Expense) Credit (12.0 ) 1.2 — 0.5 (10.3 ) Income Tax (Expense) Credit (4.2 ) 0.4 — 0.1 (3.7 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (7.8 ) 0.8 — 0.4 (6.6 ) Net Current Period Other Comprehensive Income (Loss) (7.1 ) 0.7 0.5 0.4 (5.5 ) Pension and OPEB Adjustment Related to Mitchell Plant — — — 5.1 5.1 Balance in AOCI as of March 31, 2015 $ (5.5 ) $ (18.4 ) $ 8.2 $ (87.8 ) $ (103.5 ) APCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ 3.6 $ (6.4 ) $ (2.8 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) — (0.3 ) Amortization of Prior Service Cost (Credit) — (1.2 ) (1.2 ) Amortization of Actuarial (Gains)/Losses — 0.7 0.7 Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) (0.5 ) (0.8 ) Income Tax (Expense) Credit (0.1 ) (0.2 ) (0.3 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) (0.3 ) (0.5 ) Net Current Period Other Comprehensive Income (Loss) (0.2 ) (0.3 ) (0.5 ) Balance in AOCI as of March 31, 2016 $ 3.4 $ (6.7 ) $ (3.3 ) APCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ 3.9 $ 1.1 $ 5.0 Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.2 — 0.2 Amortization of Prior Service Cost (Credit) — (1.3 ) (1.3 ) Amortization of Actuarial (Gains)/Losses — 0.6 0.6 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.2 (0.7 ) (0.5 ) Income Tax (Expense) Credit 0.1 (0.3 ) (0.2 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.1 (0.4 ) (0.3 ) Net Current Period Other Comprehensive Income (Loss) 0.1 (0.4 ) (0.3 ) Balance in AOCI as of March 31, 2015 $ 4.0 $ 0.7 $ 4.7 I&M Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (13.3 ) $ (3.4 ) $ (16.7 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.5 — 0.5 Amortization of Prior Service Cost (Credit) — (0.2 ) (0.2 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.5 — 0.5 Income Tax (Expense) Credit 0.1 — 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.4 — 0.4 Net Current Period Other Comprehensive Income (Loss) 0.4 — 0.4 Balance in AOCI as of March 31, 2016 $ (12.9 ) $ (3.4 ) $ (16.3 ) I&M Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ (14.4 ) $ 0.1 $ (14.3 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.4 — 0.4 Amortization of Prior Service Cost (Credit) — (0.2 ) (0.2 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.4 — 0.4 Income Tax (Expense) Credit 0.1 — 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.3 — 0.3 Net Current Period Other Comprehensive Income (Loss) 0.3 — 0.3 Balance in AOCI as of March 31, 2015 $ (14.1 ) $ 0.1 $ (14.0 ) OPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2015 $ 4.3 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.5 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.5 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.4 ) Net Current Period Other Comprehensive Loss (0.4 ) Balance in AOCI as of March 31, 2016 $ 3.9 OPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2014 $ 5.6 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.5 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.5 ) Income Tax (Expense) Credit (0.2 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.3 ) Net Current Period Other Comprehensive Loss (0.3 ) Balance in AOCI as of March 31, 2015 $ 5.3 PSO Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2015 $ 4.2 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) Net Current Period Other Comprehensive Loss (0.2 ) Balance in AOCI as of March 31, 2016 $ 4.0 PSO Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2014 $ 5.0 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) Net Current Period Other Comprehensive Loss (0.2 ) Balance in AOCI as of March 31, 2015 $ 4.8 SWEPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (9.1 ) $ (0.3 ) $ (9.4 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.7 — 0.7 Amortization of Prior Service Cost (Credit) — (0.5 ) (0.5 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.7 (0.3 ) 0.4 Income Tax (Expense) Credit 0.2 (0.1 ) 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.5 (0.2 ) 0.3 Net Current Period Other Comprehensive Income (Loss) 0.5 (0.2 ) 0.3 Balance in AOCI as of March 31, 2016 $ (8.6 ) $ (0.5 ) $ (9.1 ) SWEPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ (11.1 ) $ 3.6 $ (7.5 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.9 — 0.9 Amortization of Prior Service Cost (Credit) — (0.5 ) (0.5 ) Amortization of Actuarial (Gains)/Losses — 0.1 0.1 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.9 (0.4 ) 0.5 Income Tax (Expense) Credit 0.3 (0.1 ) 0.2 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.6 (0.3 ) 0.3 Net Current Period Other Comprehensive Income (Loss) 0.6 (0.3 ) 0.3 Balance in AOCI as of March 31, 2015 $ (10.5 ) $ 3.3 $ (7.2 ) |
Ohio Power Co [Member] | |
Changes in Accumulated Other Comprehensive Income (Loss) by Component | AEP Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Commodity Interest Rate and Foreign Currency Securities Available for Sale Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (5.2 ) $ (17.2 ) $ 7.1 $ (111.8 ) $ (127.1 ) Change in Fair Value Recognized in AOCI (8.1 ) — 0.6 — (7.5 ) Amount of (Gain) Loss Reclassified from AOCI Generation & Marketing Revenues (8.6 ) — — — (8.6 ) Purchased Electricity for Resale 9.2 — — — 9.2 Interest Expense — 0.5 — — 0.5 Amortization of Prior Service Cost (Credit) — — — (4.9 ) (4.9 ) Amortization of Actuarial (Gains)/Losses — — — 5.1 5.1 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.6 0.5 — 0.2 1.3 Income Tax (Expense) Credit 0.2 0.2 — 0.1 0.5 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.4 0.3 — 0.1 0.8 Net Current Period Other Comprehensive Income (Loss) (7.7 ) 0.3 0.6 0.1 (6.7 ) Balance in AOCI as of March 31, 2016 $ (12.9 ) $ (16.9 ) $ 7.7 $ (111.7 ) $ (133.8 ) AEP Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Commodity Interest Rate and Foreign Currency Securities Available for Sale Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ 1.6 $ (19.1 ) $ 7.7 $ (93.3 ) $ (103.1 ) Change in Fair Value Recognized in AOCI 0.7 (0.1 ) 0.5 — 1.1 Amount of (Gain) Loss Reclassified from AOCI Generation & Marketing Revenues (12.7 ) — — — (12.7 ) Purchased Electricity for Resale 0.7 — — — 0.7 Interest Expense — 1.2 — — 1.2 Amortization of Prior Service Cost (Credit) — — — (4.8 ) (4.8 ) Amortization of Actuarial (Gains)/Losses — — — 5.3 5.3 Reclassifications from AOCI, before Income Tax (Expense) Credit (12.0 ) 1.2 — 0.5 (10.3 ) Income Tax (Expense) Credit (4.2 ) 0.4 — 0.1 (3.7 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (7.8 ) 0.8 — 0.4 (6.6 ) Net Current Period Other Comprehensive Income (Loss) (7.1 ) 0.7 0.5 0.4 (5.5 ) Pension and OPEB Adjustment Related to Mitchell Plant — — — 5.1 5.1 Balance in AOCI as of March 31, 2015 $ (5.5 ) $ (18.4 ) $ 8.2 $ (87.8 ) $ (103.5 ) APCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ 3.6 $ (6.4 ) $ (2.8 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) — (0.3 ) Amortization of Prior Service Cost (Credit) — (1.2 ) (1.2 ) Amortization of Actuarial (Gains)/Losses — 0.7 0.7 Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) (0.5 ) (0.8 ) Income Tax (Expense) Credit (0.1 ) (0.2 ) (0.3 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) (0.3 ) (0.5 ) Net Current Period Other Comprehensive Income (Loss) (0.2 ) (0.3 ) (0.5 ) Balance in AOCI as of March 31, 2016 $ 3.4 $ (6.7 ) $ (3.3 ) APCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ 3.9 $ 1.1 $ 5.0 Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.2 — 0.2 Amortization of Prior Service Cost (Credit) — (1.3 ) (1.3 ) Amortization of Actuarial (Gains)/Losses — 0.6 0.6 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.2 (0.7 ) (0.5 ) Income Tax (Expense) Credit 0.1 (0.3 ) (0.2 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.1 (0.4 ) (0.3 ) Net Current Period Other Comprehensive Income (Loss) 0.1 (0.4 ) (0.3 ) Balance in AOCI as of March 31, 2015 $ 4.0 $ 0.7 $ 4.7 I&M Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (13.3 ) $ (3.4 ) $ (16.7 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.5 — 0.5 Amortization of Prior Service Cost (Credit) — (0.2 ) (0.2 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.5 — 0.5 Income Tax (Expense) Credit 0.1 — 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.4 — 0.4 Net Current Period Other Comprehensive Income (Loss) 0.4 — 0.4 Balance in AOCI as of March 31, 2016 $ (12.9 ) $ (3.4 ) $ (16.3 ) I&M Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ (14.4 ) $ 0.1 $ (14.3 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.4 — 0.4 Amortization of Prior Service Cost (Credit) — (0.2 ) (0.2 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.4 — 0.4 Income Tax (Expense) Credit 0.1 — 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.3 — 0.3 Net Current Period Other Comprehensive Income (Loss) 0.3 — 0.3 Balance in AOCI as of March 31, 2015 $ (14.1 ) $ 0.1 $ (14.0 ) OPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2015 $ 4.3 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.5 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.5 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.4 ) Net Current Period Other Comprehensive Loss (0.4 ) Balance in AOCI as of March 31, 2016 $ 3.9 OPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2014 $ 5.6 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.5 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.5 ) Income Tax (Expense) Credit (0.2 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.3 ) Net Current Period Other Comprehensive Loss (0.3 ) Balance in AOCI as of March 31, 2015 $ 5.3 PSO Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2015 $ 4.2 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) Net Current Period Other Comprehensive Loss (0.2 ) Balance in AOCI as of March 31, 2016 $ 4.0 PSO Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2014 $ 5.0 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) Net Current Period Other Comprehensive Loss (0.2 ) Balance in AOCI as of March 31, 2015 $ 4.8 SWEPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (9.1 ) $ (0.3 ) $ (9.4 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.7 — 0.7 Amortization of Prior Service Cost (Credit) — (0.5 ) (0.5 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.7 (0.3 ) 0.4 Income Tax (Expense) Credit 0.2 (0.1 ) 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.5 (0.2 ) 0.3 Net Current Period Other Comprehensive Income (Loss) 0.5 (0.2 ) 0.3 Balance in AOCI as of March 31, 2016 $ (8.6 ) $ (0.5 ) $ (9.1 ) SWEPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ (11.1 ) $ 3.6 $ (7.5 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.9 — 0.9 Amortization of Prior Service Cost (Credit) — (0.5 ) (0.5 ) Amortization of Actuarial (Gains)/Losses — 0.1 0.1 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.9 (0.4 ) 0.5 Income Tax (Expense) Credit 0.3 (0.1 ) 0.2 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.6 (0.3 ) 0.3 Net Current Period Other Comprehensive Income (Loss) 0.6 (0.3 ) 0.3 Balance in AOCI as of March 31, 2015 $ (10.5 ) $ 3.3 $ (7.2 ) |
Public Service Co Of Oklahoma [Member] | |
Changes in Accumulated Other Comprehensive Income (Loss) by Component | AEP Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Commodity Interest Rate and Foreign Currency Securities Available for Sale Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (5.2 ) $ (17.2 ) $ 7.1 $ (111.8 ) $ (127.1 ) Change in Fair Value Recognized in AOCI (8.1 ) — 0.6 — (7.5 ) Amount of (Gain) Loss Reclassified from AOCI Generation & Marketing Revenues (8.6 ) — — — (8.6 ) Purchased Electricity for Resale 9.2 — — — 9.2 Interest Expense — 0.5 — — 0.5 Amortization of Prior Service Cost (Credit) — — — (4.9 ) (4.9 ) Amortization of Actuarial (Gains)/Losses — — — 5.1 5.1 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.6 0.5 — 0.2 1.3 Income Tax (Expense) Credit 0.2 0.2 — 0.1 0.5 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.4 0.3 — 0.1 0.8 Net Current Period Other Comprehensive Income (Loss) (7.7 ) 0.3 0.6 0.1 (6.7 ) Balance in AOCI as of March 31, 2016 $ (12.9 ) $ (16.9 ) $ 7.7 $ (111.7 ) $ (133.8 ) AEP Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Commodity Interest Rate and Foreign Currency Securities Available for Sale Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ 1.6 $ (19.1 ) $ 7.7 $ (93.3 ) $ (103.1 ) Change in Fair Value Recognized in AOCI 0.7 (0.1 ) 0.5 — 1.1 Amount of (Gain) Loss Reclassified from AOCI Generation & Marketing Revenues (12.7 ) — — — (12.7 ) Purchased Electricity for Resale 0.7 — — — 0.7 Interest Expense — 1.2 — — 1.2 Amortization of Prior Service Cost (Credit) — — — (4.8 ) (4.8 ) Amortization of Actuarial (Gains)/Losses — — — 5.3 5.3 Reclassifications from AOCI, before Income Tax (Expense) Credit (12.0 ) 1.2 — 0.5 (10.3 ) Income Tax (Expense) Credit (4.2 ) 0.4 — 0.1 (3.7 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (7.8 ) 0.8 — 0.4 (6.6 ) Net Current Period Other Comprehensive Income (Loss) (7.1 ) 0.7 0.5 0.4 (5.5 ) Pension and OPEB Adjustment Related to Mitchell Plant — — — 5.1 5.1 Balance in AOCI as of March 31, 2015 $ (5.5 ) $ (18.4 ) $ 8.2 $ (87.8 ) $ (103.5 ) APCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ 3.6 $ (6.4 ) $ (2.8 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) — (0.3 ) Amortization of Prior Service Cost (Credit) — (1.2 ) (1.2 ) Amortization of Actuarial (Gains)/Losses — 0.7 0.7 Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) (0.5 ) (0.8 ) Income Tax (Expense) Credit (0.1 ) (0.2 ) (0.3 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) (0.3 ) (0.5 ) Net Current Period Other Comprehensive Income (Loss) (0.2 ) (0.3 ) (0.5 ) Balance in AOCI as of March 31, 2016 $ 3.4 $ (6.7 ) $ (3.3 ) APCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ 3.9 $ 1.1 $ 5.0 Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.2 — 0.2 Amortization of Prior Service Cost (Credit) — (1.3 ) (1.3 ) Amortization of Actuarial (Gains)/Losses — 0.6 0.6 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.2 (0.7 ) (0.5 ) Income Tax (Expense) Credit 0.1 (0.3 ) (0.2 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.1 (0.4 ) (0.3 ) Net Current Period Other Comprehensive Income (Loss) 0.1 (0.4 ) (0.3 ) Balance in AOCI as of March 31, 2015 $ 4.0 $ 0.7 $ 4.7 I&M Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (13.3 ) $ (3.4 ) $ (16.7 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.5 — 0.5 Amortization of Prior Service Cost (Credit) — (0.2 ) (0.2 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.5 — 0.5 Income Tax (Expense) Credit 0.1 — 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.4 — 0.4 Net Current Period Other Comprehensive Income (Loss) 0.4 — 0.4 Balance in AOCI as of March 31, 2016 $ (12.9 ) $ (3.4 ) $ (16.3 ) I&M Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ (14.4 ) $ 0.1 $ (14.3 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.4 — 0.4 Amortization of Prior Service Cost (Credit) — (0.2 ) (0.2 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.4 — 0.4 Income Tax (Expense) Credit 0.1 — 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.3 — 0.3 Net Current Period Other Comprehensive Income (Loss) 0.3 — 0.3 Balance in AOCI as of March 31, 2015 $ (14.1 ) $ 0.1 $ (14.0 ) OPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2015 $ 4.3 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.5 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.5 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.4 ) Net Current Period Other Comprehensive Loss (0.4 ) Balance in AOCI as of March 31, 2016 $ 3.9 OPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2014 $ 5.6 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.5 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.5 ) Income Tax (Expense) Credit (0.2 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.3 ) Net Current Period Other Comprehensive Loss (0.3 ) Balance in AOCI as of March 31, 2015 $ 5.3 PSO Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2015 $ 4.2 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) Net Current Period Other Comprehensive Loss (0.2 ) Balance in AOCI as of March 31, 2016 $ 4.0 PSO Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2014 $ 5.0 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) Net Current Period Other Comprehensive Loss (0.2 ) Balance in AOCI as of March 31, 2015 $ 4.8 SWEPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (9.1 ) $ (0.3 ) $ (9.4 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.7 — 0.7 Amortization of Prior Service Cost (Credit) — (0.5 ) (0.5 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.7 (0.3 ) 0.4 Income Tax (Expense) Credit 0.2 (0.1 ) 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.5 (0.2 ) 0.3 Net Current Period Other Comprehensive Income (Loss) 0.5 (0.2 ) 0.3 Balance in AOCI as of March 31, 2016 $ (8.6 ) $ (0.5 ) $ (9.1 ) SWEPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ (11.1 ) $ 3.6 $ (7.5 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.9 — 0.9 Amortization of Prior Service Cost (Credit) — (0.5 ) (0.5 ) Amortization of Actuarial (Gains)/Losses — 0.1 0.1 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.9 (0.4 ) 0.5 Income Tax (Expense) Credit 0.3 (0.1 ) 0.2 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.6 (0.3 ) 0.3 Net Current Period Other Comprehensive Income (Loss) 0.6 (0.3 ) 0.3 Balance in AOCI as of March 31, 2015 $ (10.5 ) $ 3.3 $ (7.2 ) |
Southwestern Electric Power Co [Member] | |
Changes in Accumulated Other Comprehensive Income (Loss) by Component | AEP Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Commodity Interest Rate and Foreign Currency Securities Available for Sale Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (5.2 ) $ (17.2 ) $ 7.1 $ (111.8 ) $ (127.1 ) Change in Fair Value Recognized in AOCI (8.1 ) — 0.6 — (7.5 ) Amount of (Gain) Loss Reclassified from AOCI Generation & Marketing Revenues (8.6 ) — — — (8.6 ) Purchased Electricity for Resale 9.2 — — — 9.2 Interest Expense — 0.5 — — 0.5 Amortization of Prior Service Cost (Credit) — — — (4.9 ) (4.9 ) Amortization of Actuarial (Gains)/Losses — — — 5.1 5.1 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.6 0.5 — 0.2 1.3 Income Tax (Expense) Credit 0.2 0.2 — 0.1 0.5 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.4 0.3 — 0.1 0.8 Net Current Period Other Comprehensive Income (Loss) (7.7 ) 0.3 0.6 0.1 (6.7 ) Balance in AOCI as of March 31, 2016 $ (12.9 ) $ (16.9 ) $ 7.7 $ (111.7 ) $ (133.8 ) AEP Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Commodity Interest Rate and Foreign Currency Securities Available for Sale Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ 1.6 $ (19.1 ) $ 7.7 $ (93.3 ) $ (103.1 ) Change in Fair Value Recognized in AOCI 0.7 (0.1 ) 0.5 — 1.1 Amount of (Gain) Loss Reclassified from AOCI Generation & Marketing Revenues (12.7 ) — — — (12.7 ) Purchased Electricity for Resale 0.7 — — — 0.7 Interest Expense — 1.2 — — 1.2 Amortization of Prior Service Cost (Credit) — — — (4.8 ) (4.8 ) Amortization of Actuarial (Gains)/Losses — — — 5.3 5.3 Reclassifications from AOCI, before Income Tax (Expense) Credit (12.0 ) 1.2 — 0.5 (10.3 ) Income Tax (Expense) Credit (4.2 ) 0.4 — 0.1 (3.7 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (7.8 ) 0.8 — 0.4 (6.6 ) Net Current Period Other Comprehensive Income (Loss) (7.1 ) 0.7 0.5 0.4 (5.5 ) Pension and OPEB Adjustment Related to Mitchell Plant — — — 5.1 5.1 Balance in AOCI as of March 31, 2015 $ (5.5 ) $ (18.4 ) $ 8.2 $ (87.8 ) $ (103.5 ) APCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ 3.6 $ (6.4 ) $ (2.8 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) — (0.3 ) Amortization of Prior Service Cost (Credit) — (1.2 ) (1.2 ) Amortization of Actuarial (Gains)/Losses — 0.7 0.7 Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) (0.5 ) (0.8 ) Income Tax (Expense) Credit (0.1 ) (0.2 ) (0.3 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) (0.3 ) (0.5 ) Net Current Period Other Comprehensive Income (Loss) (0.2 ) (0.3 ) (0.5 ) Balance in AOCI as of March 31, 2016 $ 3.4 $ (6.7 ) $ (3.3 ) APCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ 3.9 $ 1.1 $ 5.0 Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.2 — 0.2 Amortization of Prior Service Cost (Credit) — (1.3 ) (1.3 ) Amortization of Actuarial (Gains)/Losses — 0.6 0.6 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.2 (0.7 ) (0.5 ) Income Tax (Expense) Credit 0.1 (0.3 ) (0.2 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.1 (0.4 ) (0.3 ) Net Current Period Other Comprehensive Income (Loss) 0.1 (0.4 ) (0.3 ) Balance in AOCI as of March 31, 2015 $ 4.0 $ 0.7 $ 4.7 I&M Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (13.3 ) $ (3.4 ) $ (16.7 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.5 — 0.5 Amortization of Prior Service Cost (Credit) — (0.2 ) (0.2 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.5 — 0.5 Income Tax (Expense) Credit 0.1 — 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.4 — 0.4 Net Current Period Other Comprehensive Income (Loss) 0.4 — 0.4 Balance in AOCI as of March 31, 2016 $ (12.9 ) $ (3.4 ) $ (16.3 ) I&M Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ (14.4 ) $ 0.1 $ (14.3 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.4 — 0.4 Amortization of Prior Service Cost (Credit) — (0.2 ) (0.2 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.4 — 0.4 Income Tax (Expense) Credit 0.1 — 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.3 — 0.3 Net Current Period Other Comprehensive Income (Loss) 0.3 — 0.3 Balance in AOCI as of March 31, 2015 $ (14.1 ) $ 0.1 $ (14.0 ) OPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2015 $ 4.3 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.5 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.5 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.4 ) Net Current Period Other Comprehensive Loss (0.4 ) Balance in AOCI as of March 31, 2016 $ 3.9 OPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2014 $ 5.6 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.5 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.5 ) Income Tax (Expense) Credit (0.2 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.3 ) Net Current Period Other Comprehensive Loss (0.3 ) Balance in AOCI as of March 31, 2015 $ 5.3 PSO Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2015 $ 4.2 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) Net Current Period Other Comprehensive Loss (0.2 ) Balance in AOCI as of March 31, 2016 $ 4.0 PSO Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency (in millions) Balance in AOCI as of December 31, 2014 $ 5.0 Change in Fair Value Recognized in AOCI — Amount of (Gain) Loss Reclassified from AOCI Interest Expense (0.3 ) Reclassifications from AOCI, before Income Tax (Expense) Credit (0.3 ) Income Tax (Expense) Credit (0.1 ) Reclassifications from AOCI, Net of Income Tax (Expense) Credit (0.2 ) Net Current Period Other Comprehensive Loss (0.2 ) Balance in AOCI as of March 31, 2015 $ 4.8 SWEPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2016 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2015 $ (9.1 ) $ (0.3 ) $ (9.4 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.7 — 0.7 Amortization of Prior Service Cost (Credit) — (0.5 ) (0.5 ) Amortization of Actuarial (Gains)/Losses — 0.2 0.2 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.7 (0.3 ) 0.4 Income Tax (Expense) Credit 0.2 (0.1 ) 0.1 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.5 (0.2 ) 0.3 Net Current Period Other Comprehensive Income (Loss) 0.5 (0.2 ) 0.3 Balance in AOCI as of March 31, 2016 $ (8.6 ) $ (0.5 ) $ (9.1 ) SWEPCo Changes in Accumulated Other Comprehensive Income (Loss) by Component For the Three Months Ended March 31, 2015 Cash Flow Hedges Interest Rate and Foreign Currency Pension and OPEB Total (in millions) Balance in AOCI as of December 31, 2014 $ (11.1 ) $ 3.6 $ (7.5 ) Change in Fair Value Recognized in AOCI — — — Amount of (Gain) Loss Reclassified from AOCI Interest Expense 0.9 — 0.9 Amortization of Prior Service Cost (Credit) — (0.5 ) (0.5 ) Amortization of Actuarial (Gains)/Losses — 0.1 0.1 Reclassifications from AOCI, before Income Tax (Expense) Credit 0.9 (0.4 ) 0.5 Income Tax (Expense) Credit 0.3 (0.1 ) 0.2 Reclassifications from AOCI, Net of Income Tax (Expense) Credit 0.6 (0.3 ) 0.3 Net Current Period Other Comprehensive Income (Loss) 0.6 (0.3 ) 0.3 Balance in AOCI as of March 31, 2015 $ (10.5 ) $ 3.3 $ (7.2 ) |
Rate Matters (Tables)
Rate Matters (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Regulatory Assets Pending Final Regulatory Approval | AEP March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Earning a Return Storm Related Costs $ 24.8 $ 24.2 Plant Retirement Costs - Materials and Supplies 20.8 20.9 Regulatory Assets Currently Not Earning a Return Plant Retirement Costs - Asset Retirement Obligation Costs 59.8 59.8 Storm Related Costs 23.2 18.2 Peak Demand Reduction/Energy Efficiency 14.1 13.1 Other Regulatory Assets Pending Final Regulatory Approval 35.4 31.7 Total Regulatory Assets Pending Final Regulatory Approval $ 178.1 $ 167.9 |
Schedule of Potential Additional Customer Credits Related to the PPA Agreement | PJM Planning Year Potential Credit June 2020 through May 2021 $10 million June 2021 through May 2022 $20 million June 2022 through May 2023 $30 million June 2023 through May 2024 $40 million |
Appalachian Power Co [Member] | |
Regulatory Assets Pending Final Regulatory Approval | APCo March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Earning a Return Plant Retirement Costs - Materials and Supplies $ 9.2 $ 9.3 Regulatory Assets Currently Not Earning a Return Plant Retirement Costs - Asset Retirement Obligation Costs 32.7 32.7 Peak Demand Reduction/Energy Efficiency - Virginia 13.6 12.7 Amos Plant Transfer Costs - West Virginia 2.0 2.0 Other Regulatory Assets Pending Final Regulatory Approval 0.6 0.6 Total Regulatory Assets Pending Final Regulatory Approval $ 58.1 $ 57.3 |
Indiana Michigan Power Co [Member] | |
Regulatory Assets Pending Final Regulatory Approval | I&M March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Earning a Return Plant Retirement Costs - Materials and Supplies $ 11.6 $ 11.6 Regulatory Assets Currently Not Earning a Return Plant Retirement Costs - Asset Retirement Obligation Costs - Indiana 27.1 27.1 Cook Plant Turbine 10.4 9.7 Deferred Cook Plant Life Cycle Management Project Costs - Michigan 5.4 4.2 Stranded Costs on Abandoned Plants 3.9 3.9 Rockport Dry Sorbent Injection System - Indiana 3.6 2.8 Other Regulatory Assets Pending Final Regulatory Approval 0.2 — Total Regulatory Assets Pending Final Regulatory Approval $ 62.2 $ 59.3 |
Ohio Power Co [Member] | |
Regulatory Assets Pending Final Regulatory Approval | OPCo March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Not Earning a Return gridSMART ® Costs $ 1.8 $ 1.3 Total Regulatory Assets Pending Final Regulatory Approval $ 1.8 $ 1.3 |
Schedule of Potential Additional Customer Credits Related to the PPA Agreement | PJM Planning Year Potential Credit June 2020 through May 2021 $10 million June 2021 through May 2022 $20 million June 2022 through May 2023 $30 million June 2023 through May 2024 $40 million |
Public Service Co Of Oklahoma [Member] | |
Regulatory Assets Pending Final Regulatory Approval | PSO March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Not Earning a Return Storm Related Costs $ 17.0 $ 12.3 Other Regulatory Assets Pending Final Regulatory Approval 1.1 1.1 Total Regulatory Assets Pending Final Regulatory Approval $ 18.1 $ 13.4 |
Southwestern Electric Power Co [Member] | |
Regulatory Assets Pending Final Regulatory Approval | SWEPCo March 31, December 31, 2016 2015 Noncurrent Regulatory Assets (in millions) Regulatory Assets Currently Not Earning a Return Shipe Road Transmission Project - FERC $ 3.1 $ 3.1 Asset Retirement Obligation - Arkansas, Louisiana 1.9 1.7 Other Regulatory Assets Pending Final Regulatory Approval 1.4 1.1 Total Regulatory Assets Pending Final Regulatory Approval $ 6.4 $ 5.9 |
Commitments, Guarantees and C30
Commitments, Guarantees and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Maximum Future Payments for Letters of Credit Uncommitted Facilities | Company Amount Maturity (in millions) AEP $ 190.2 June 2016 to March 2017 OPCo 4.2 September 2016 |
Pollution Control Bonds Supported by Bilateral Letters of Credit | Company Pollution Control Bonds Bilateral Letters of Credit Maturity of Bilateral Letters of Credit (in millions) AEP $ 351.4 $ 355.4 June 2016 to July 2017 APCo 104.4 105.6 March 2017 I&M 77.0 77.9 March 2017 |
Maximum Potential Loss on Master Lease Agreements | Company Maximum Potential Loss (in millions) AEP $ 33.6 APCo 4.9 I&M 3.0 OPCo 5.3 PSO 2.8 SWEPCo 3.1 |
Appalachian Power Co [Member] | |
Maximum Future Payments for Letters of Credit Uncommitted Facilities | Company Amount Maturity (in millions) AEP $ 190.2 June 2016 to March 2017 OPCo 4.2 September 2016 |
Pollution Control Bonds Supported by Bilateral Letters of Credit | Company Pollution Control Bonds Bilateral Letters of Credit Maturity of Bilateral Letters of Credit (in millions) AEP $ 351.4 $ 355.4 June 2016 to July 2017 APCo 104.4 105.6 March 2017 I&M 77.0 77.9 March 2017 |
Maximum Potential Loss on Master Lease Agreements | Company Maximum Potential Loss (in millions) AEP $ 33.6 APCo 4.9 I&M 3.0 OPCo 5.3 PSO 2.8 SWEPCo 3.1 |
Indiana Michigan Power Co [Member] | |
Maximum Future Payments for Letters of Credit Uncommitted Facilities | Company Amount Maturity (in millions) AEP $ 190.2 June 2016 to March 2017 OPCo 4.2 September 2016 |
Pollution Control Bonds Supported by Bilateral Letters of Credit | Company Pollution Control Bonds Bilateral Letters of Credit Maturity of Bilateral Letters of Credit (in millions) AEP $ 351.4 $ 355.4 June 2016 to July 2017 APCo 104.4 105.6 March 2017 I&M 77.0 77.9 March 2017 |
Maximum Potential Loss on Master Lease Agreements | Company Maximum Potential Loss (in millions) AEP $ 33.6 APCo 4.9 I&M 3.0 OPCo 5.3 PSO 2.8 SWEPCo 3.1 |
Ohio Power Co [Member] | |
Maximum Future Payments for Letters of Credit Uncommitted Facilities | Company Amount Maturity (in millions) AEP $ 190.2 June 2016 to March 2017 OPCo 4.2 September 2016 |
Pollution Control Bonds Supported by Bilateral Letters of Credit | Company Pollution Control Bonds Bilateral Letters of Credit Maturity of Bilateral Letters of Credit (in millions) AEP $ 351.4 $ 355.4 June 2016 to July 2017 APCo 104.4 105.6 March 2017 I&M 77.0 77.9 March 2017 |
Maximum Potential Loss on Master Lease Agreements | Company Maximum Potential Loss (in millions) AEP $ 33.6 APCo 4.9 I&M 3.0 OPCo 5.3 PSO 2.8 SWEPCo 3.1 |
Public Service Co Of Oklahoma [Member] | |
Maximum Future Payments for Letters of Credit Uncommitted Facilities | Company Amount Maturity (in millions) AEP $ 190.2 June 2016 to March 2017 OPCo 4.2 September 2016 |
Pollution Control Bonds Supported by Bilateral Letters of Credit | Company Pollution Control Bonds Bilateral Letters of Credit Maturity of Bilateral Letters of Credit (in millions) AEP $ 351.4 $ 355.4 June 2016 to July 2017 APCo 104.4 105.6 March 2017 I&M 77.0 77.9 March 2017 |
Maximum Potential Loss on Master Lease Agreements | Company Maximum Potential Loss (in millions) AEP $ 33.6 APCo 4.9 I&M 3.0 OPCo 5.3 PSO 2.8 SWEPCo 3.1 |
Southwestern Electric Power Co [Member] | |
Maximum Future Payments for Letters of Credit Uncommitted Facilities | Company Amount Maturity (in millions) AEP $ 190.2 June 2016 to March 2017 OPCo 4.2 September 2016 |
Pollution Control Bonds Supported by Bilateral Letters of Credit | Company Pollution Control Bonds Bilateral Letters of Credit Maturity of Bilateral Letters of Credit (in millions) AEP $ 351.4 $ 355.4 June 2016 to July 2017 APCo 104.4 105.6 March 2017 I&M 77.0 77.9 March 2017 |
Maximum Potential Loss on Master Lease Agreements | Company Maximum Potential Loss (in millions) AEP $ 33.6 APCo 4.9 I&M 3.0 OPCo 5.3 PSO 2.8 SWEPCo 3.1 |
Dispositions (Tables)
Dispositions (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Results of Discontinued Operation | Three Months Ended March 31, 2015 (in millions) Other Revenues $ 127.7 Other Operation Expense 85.0 Maintenance Expense 8.3 Depreciation and Amortization Expense 9.1 Taxes Other Than Income Taxes 4.0 Total Expenses 106.4 Other Income (Expense) (4.4 ) Pretax Income of Discontinued Operations 16.9 Income Tax Expense 6.3 Equity Earnings of Unconsolidated Subsidiaries (0.1 ) Total Income on Discontinued Operations as Presented on the Statements of Income $ 10.5 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Components of Net Periodic Benefit Cost | Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 21.4 $ 23.3 $ 2.6 $ 3.1 Interest Cost 52.9 51.3 15.2 14.2 Expected Return on Plan Assets (70.1 ) (68.7 ) (26.8 ) (27.8 ) Amortization of Prior Service Cost (Credit) 0.6 0.6 (17.3 ) (17.3 ) Amortization of Net Actuarial Loss 21.0 26.8 7.9 4.7 Net Periodic Benefit Cost (Credit) $ 25.8 $ 33.3 $ (18.4 ) $ (23.1 ) |
Appalachian Power Co [Member] | |
Components of Net Periodic Benefit Cost | Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 2.0 $ 2.2 $ 0.2 $ 0.3 Interest Cost 6.8 6.7 2.7 2.6 Expected Return on Plan Assets (8.8 ) (8.8 ) (4.3 ) (4.6 ) Amortization of Prior Service Credit — — (2.5 ) (2.5 ) Amortization of Net Actuarial Loss 2.7 3.5 1.4 0.9 Net Periodic Benefit Cost (Credit) $ 2.7 $ 3.6 $ (2.5 ) $ (3.3 ) |
Indiana Michigan Power Co [Member] | |
Components of Net Periodic Benefit Cost | Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 3.0 $ 3.2 $ 0.4 $ 0.4 Interest Cost 6.3 6.1 1.8 1.6 Expected Return on Plan Assets (8.4 ) (8.1 ) (3.2 ) (3.3 ) Amortization of Prior Service Cost (Credit) 0.1 — (2.4 ) (2.4 ) Amortization of Net Actuarial Loss 2.5 3.2 0.9 0.5 Net Periodic Benefit Cost (Credit) $ 3.5 $ 4.4 $ (2.5 ) $ (3.2 ) |
Ohio Power Co [Member] | |
Components of Net Periodic Benefit Cost | Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 1.6 $ 1.7 $ 0.2 $ 0.2 Interest Cost 5.2 5.1 1.7 1.6 Expected Return on Plan Assets (6.9 ) (6.9 ) (3.2 ) (3.4 ) Amortization of Prior Service Credit — — (1.7 ) (1.7 ) Amortization of Net Actuarial Loss 2.0 2.6 0.9 0.5 Net Periodic Benefit Cost (Credit) $ 1.9 $ 2.5 $ (2.1 ) $ (2.8 ) |
Public Service Co Of Oklahoma [Member] | |
Components of Net Periodic Benefit Cost | Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 1.5 $ 1.6 $ 0.2 $ 0.2 Interest Cost 2.8 2.7 0.8 0.8 Expected Return on Plan Assets (3.9 ) (3.8 ) (1.5 ) (1.6 ) Amortization of Prior Service Cost (Credit) 0.1 0.1 (1.1 ) (1.1 ) Amortization of Net Actuarial Loss 1.1 1.4 0.4 0.2 Net Periodic Benefit Cost (Credit) $ 1.6 $ 2.0 $ (1.2 ) $ (1.5 ) |
Southwestern Electric Power Co [Member] | |
Components of Net Periodic Benefit Cost | Pension Plans Other Postretirement Benefit Plans Three Months Ended March 31, Three Months Ended March 31, 2016 2015 2016 2015 (in millions) Service Cost $ 2.0 $ 2.1 $ 0.2 $ 0.2 Interest Cost 3.1 2.9 0.9 0.8 Expected Return on Plan Assets (4.1 ) (4.0 ) (1.7 ) (1.7 ) Amortization of Prior Service Cost (Credit) 0.1 0.1 (1.3 ) (1.3 ) Amortization of Net Actuarial Loss 1.2 1.5 0.5 0.3 Net Periodic Benefit Cost (Credit) $ 2.3 $ 2.6 $ (1.4 ) $ (1.7 ) |
Business Segments (Tables)
Business Segments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Reportable Segment Information | Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Adjustments Consolidated (in millions) Three Months Ended Revenues from: External Customers $ 2,218.1 $ 1,077.3 $ 29.3 $ 713.9 $ 6.3 $ — $ 4,044.9 Other Operating Segments 27.5 19.5 59.3 34.1 18.1 (158.5 ) — Total Revenues $ 2,245.6 $ 1,096.8 $ 88.6 $ 748.0 $ 24.4 $ (158.5 ) $ 4,044.9 Income from Continuing Operations $ 278.7 $ 108.0 $ 44.7 $ 70.7 $ 1.0 $ — $ 503.1 Income from Discontinued Operations, Net of Tax — — — — — — — Net Income $ 278.7 $ 108.0 $ 44.7 $ 70.7 $ 1.0 $ — $ 503.1 Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Adjustments Consolidated (in millions) Three Months Ended Revenues from: External Customers $ 2,487.4 $ 1,206.3 $ 21.7 $ 859.2 $ 5.8 $ — $ 4,580.4 Other Operating Segments 17.7 63.8 36.2 311.3 20.4 (449.4 ) — Total Revenues $ 2,505.1 $ 1,270.1 $ 57.9 $ 1,170.5 $ 26.2 $ (449.4 ) $ 4,580.4 Income (Loss) from Continuing Operations $ 300.3 $ 97.2 $ 36.3 $ 187.4 $ (1.0 ) $ — $ 620.2 Income from Discontinued Operations, Net of Tax — — — — 10.5 — 10.5 Net Income $ 300.3 $ 97.2 $ 36.3 $ 187.4 $ 9.5 $ — $ 630.7 Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Consolidated (in millions) March 31, 2016 Total Property, Plant and Equipment $ 40,599.7 $ 14,029.4 $ 4,230.5 $ 7,510.9 $ 357.3 $ (297.6 ) (b) $ 66,430.2 Accumulated Depreciation and Amortization 12,485.3 3,573.5 63.9 3,409.8 180.8 (116.0 ) (b) 19,597.3 Total Property Plant and Equipment - Net $ 28,114.4 $ 10,455.9 $ 4,166.6 $ 4,101.1 $ 176.5 $ (181.6 ) (b) $ 46,832.9 Total Assets $ 36,197.0 $ 14,341.3 $ 5,152.7 $ 5,400.2 $ 21,962.1 $ (20,566.8 ) (b) (c) $ 62,486.5 Long-term Debt Due Within One Year: Affiliated $ — $ — $ — $ — $ — $ — $ — Non-Affiliated 1,174.3 786.3 — 71.7 1.0 — 2,033.3 Long-term Debt: Affiliated 20.0 — — 32.2 — (52.2 ) — Non-Affiliated 9,948.1 4,665.6 1,654.1 635.3 846.2 — 17,749.3 Total Long-term Debt $ 11,142.4 $ 5,451.9 $ 1,654.1 $ 739.2 $ 847.2 $ (52.2 ) $ 19,782.6 Vertically Integrated Utilities Transmission and Distribution Utilities AEP Transmission Holdco Generation Corporate and Other (a) Reconciling Consolidated (in millions) December 31, 2015 Total Property, Plant and Equipment $ 40,130.3 $ 13,840.5 $ 3,977.6 $ 7,461.3 $ 350.9 $ (279.2 ) (b) $ 65,481.4 Accumulated Depreciation and Amortization 12,335.0 3,529.2 52.3 3,367.0 176.9 (112.2 ) (b) 19,348.2 Total Property Plant and Equipment - Net $ 27,795.3 $ 10,311.3 $ 3,925.3 $ 4,094.3 $ 174.0 $ (167.0 ) (b) $ 46,133.2 Total Assets $ 35,792.3 $ 14,640.2 $ 5,012.1 $ 5,414.5 $ 21,907.4 $ (21,083.4 ) (b) (c) $ 61,683.1 Long-term Debt Due Within One Year: Affiliated $ — $ — $ — $ — $ — $ — $ — Non-Affiliated 935.4 824.7 — 71.6 0.1 — 1,831.8 Long-term Debt: Affiliated 20.0 — — 32.2 — (52.2 ) — Non-Affiliated 9,833.0 4,776.8 1,648.4 639.5 843.2 — 17,740.9 Total Long-term Debt $ 10,788.4 $ 5,601.5 $ 1,648.4 $ 743.3 $ 843.3 $ (52.2 ) $ 19,572.7 (a) Corporate and Other primarily includes the purchasing of receivables from certain AEP utility subsidiaries. This segment also includes Parent’s guarantee revenue received from affiliates, investment income, interest income, interest expense and discontinued operations of AEPRO and other nonallocated costs. (b) Includes eliminations due to an intercompany capital lease. (c) Reconciling Adjustments for Total Assets primarily include the elimination of intercompany advances to affiliates and intercompany accounts receivable along with the elimination of AEP’s investments in subsidiary companies. |
Derivatives and Hedging (Tables
Derivatives and Hedging (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Notional Volume of Derivative Instruments | Notional Volume of Derivative Instruments March 31, 2016 Primary Risk Exposure Unit of Measure AEP APCo I&M OPCo PSO SWEPCo (in millions) Commodity: Power MWhs 272.7 25.0 13.9 11.6 4.8 5.9 Coal Tons 3.4 — 1.1 — — 2.3 Natural Gas MMBtus 42.7 0.3 0.2 — 0.2 0.2 Heating Oil and Gasoline Gallons 6.9 1.3 0.6 1.5 0.8 0.9 Interest Rate USD $ 101.9 $ 1.2 $ 0.8 $ — $ — $ — Interest Rate and Foreign Currency USD $ 559.3 $ — $ — $ — $ — $ — Notional Volume of Derivative Instruments December 31, 2015 Primary Risk Exposure Unit of Measure AEP APCo I&M OPCo PSO SWEPCo (in millions) Commodity: Power MWhs 317.8 40.9 22.8 13.3 11.3 14.0 Coal Tons 4.4 — 1.6 — — 2.8 Natural Gas MMBtus 38.2 0.3 0.2 — 0.2 0.2 Heating Oil and Gasoline Gallons 7.4 1.4 0.7 1.6 0.8 0.9 Interest Rate USD $ 113.5 $ 2.4 $ 1.6 $ — $ — $ — Interest Rate and Foreign Currency USD $ 560.3 $ — $ — $ — $ — $ — |
Cash Collateral Netting | March 31, 2016 December 31, 2015 Company Cash Collateral Received Netted Against Risk Management Assets Cash Collateral Paid Netted Against Risk Management Liabilities Cash Collateral Received Netted Against Risk Management Assets Cash Collateral Paid Netted Against Risk Management Liabilities (in millions) AEP $ 11.8 $ 43.0 $ 5.8 $ 44.4 APCo — 0.6 — 3.1 I&M — 0.1 — 0.6 OPCo — 0.2 — 0.5 PSO — 0.1 — 0.3 SWEPCo — 0.2 — 0.3 |
Fair Value of Derivative Instruments | AEP Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts Hedging Contracts Gross Amounts of Risk Management Assets/ Liabilities Recognized Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location Commodity (a) Commodity (a) Interest Rate and Foreign Currency (a) (in millions) Current Risk Management Assets $ 425.9 $ 9.8 $ 0.9 $ 436.6 $ (292.8 ) $ 143.8 Long-term Risk Management Assets 390.1 13.5 — 403.6 (74.7 ) 328.9 Total Assets 816.0 23.3 0.9 840.2 (367.5 ) 472.7 Current Risk Management Liabilities 401.6 12.6 0.3 414.5 (310.2 ) 104.3 Long-term Risk Management Liabilities 264.6 31.0 0.5 296.1 (88.5 ) 207.6 Total Liabilities 666.2 43.6 0.8 710.6 (398.7 ) 311.9 Total MTM Derivative Contract Net Assets (Liabilities) $ 149.8 $ (20.3 ) $ 0.1 $ 129.6 $ 31.2 $ 160.8 AEP Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts Hedging Contracts Gross Amounts of Risk Management Assets/ Liabilities Recognized Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location Commodity (a) Commodity (a) Interest Rate and Foreign Currency (a) (in millions) Current Risk Management Assets $ 368.8 $ 8.2 $ 0.1 $ 377.1 $ (242.7 ) $ 134.4 Long-term Risk Management Assets 364.8 11.7 — 376.5 (54.7 ) 321.8 Total Assets 733.6 19.9 0.1 753.6 (297.4 ) 456.2 Current Risk Management Liabilities 347.0 9.1 0.3 356.4 (269.3 ) 87.1 Long-term Risk Management Liabilities 223.3 19.3 3.2 245.8 (66.7 ) 179.1 Total Liabilities 570.3 28.4 3.5 602.2 (336.0 ) 266.2 Total MTM Derivative Contract Net Assets (Liabilities) $ 163.3 $ (8.5 ) $ (3.4 ) $ 151.4 $ 38.6 $ 190.0 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts primarily include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. |
Amount of Gain (Loss) Recognized on Risk Management Contracts | Amount of Gain (Loss) Recognized on Risk Management Contracts For the Three Months Ended March 31, 2016 Location of Gain (Loss) AEP APCo I&M OPCo PSO SWEPCo (in millions) Vertically Integrated Utilities Revenues $ 0.6 $ — $ — $ — $ — $ — Transmission and Distribution Utilities Revenues (3.5 ) — — — — — Generation & Marketing Revenues 19.8 — — — — — Electric Generation, Transmission and Distribution Revenues — (0.8 ) 1.6 (3.5 ) — — Sales to AEP Affiliates — 1.1 4.0 — — — Purchased Electricity for Resale 2.1 1.4 0.1 — — — Other Operation Expense (0.7 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Maintenance Expense (0.8 ) (0.2 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Regulatory Assets (a) (11.1 ) 0.2 0.3 (11.4 ) (0.5 ) 0.1 Regulatory Liabilities (a) 12.7 15.9 3.9 (15.2 ) — 4.5 Total Gain (Loss) on Risk Management Contracts $ 19.1 $ 17.5 $ 9.7 $ (30.3 ) $ (0.7 ) $ 4.4 Amount of Gain (Loss) Recognized on Risk Management Contracts For the Three Months Ended March 31, 2015 Location of Gain (Loss) AEP APCo I&M OPCo PSO SWEPCo (in millions) Vertically Integrated Utilities Revenues $ 4.4 $ — $ — $ — $ — $ — Generation & Marketing Revenues 48.8 — — — — — Electric Generation, Transmission and Distribution Revenues — 0.6 2.2 — — — Purchased Electricity for Resale 3.3 0.7 0.3 — — — Other Operation Expense (0.9 ) (0.1 ) (0.1 ) (0.2 ) (0.1 ) (0.1 ) Maintenance Expense (0.8 ) (0.2 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Regulatory Assets (a) (4.1 ) 0.7 (0.5 ) — (0.8 ) (3.5 ) Regulatory Liabilities (a) 3.9 1.7 (3.0 ) 4.7 — 3.9 Total Gain (Loss) on Risk Management Contracts $ 54.6 $ 3.4 $ (1.2 ) $ 4.4 $ (1.0 ) $ 0.2 (a) Represents realized and unrealized gains and losses subject to regulatory accounting treatment recorded as either current or noncurrent on the condensed balance sheets. |
Gain (Loss) on Hedging Instruments | Three Months Ended March 31, 2016 2015 (in millions) Gain on Fair Value Hedging Instruments $ 3.5 $ 4.5 Loss on Fair Value Portion of Long-term Debt (3.5 ) (4.5 ) |
Impact of Cash Flow Hedges on the Condensed Balance Sheet | Impact of Cash Flow Hedges on AEP’s Condensed Balance Sheets March 31, 2016 December 31, 2015 Company Commodity Interest Rate and Foreign Currency Commodity Interest Rate and Foreign Currency (in millions) Hedging Assets (a) $ 19.8 $ — $ 17.6 $ — Hedging Liabilities (a) 40.1 0.4 26.1 0.4 AOCI Loss Net of Tax (12.9 ) (16.9 ) (5.2 ) (17.2 ) Portion Expected to be Reclassified to Net Income During the Next Twelve Months (1.7 ) (1.4 ) (0.4 ) (1.5 ) (a) Hedging Assets and Hedging Liabilities are included in Risk Management Assets and Liabilities on the condensed balance sheets. |
Collateral Required Under Various Triggering Events | March 31, 2016 December 31, 2015 Company Amount of Collateral That Would Have Been Required to Post Attributable to RTOs and ISOs Amount of Collateral Attributable to Other Contracts Amount of Collateral Amount of (in millions) AEP $ 23.6 $ 298.3 (a) $ 17.5 $ 297.8 (a) APCo 2.2 0.1 4.9 0.1 I&M 1.4 — 3.3 0.1 PSO 2.1 3.2 — 3.2 SWEPCo 2.7 0.1 — 0.1 (a) Represents the amount of collateral AEP subsidiaries would have been required to post for other significant non-derivative contracts including AGR jointly owned plant contracts and various other commodity related contacts. |
Liabilities Subject to Cross Default Provisions | March 31, 2016 Company Liabilities for Contracts with Cross Default Provisions Prior to Contractual Netting Arrangements Amount of Cash Collateral Posted Additional Settlement Liability if Cross Default Provision is Triggered (in millions) AEP $ 328.8 $ — $ 276.2 APCo 3.8 — 3.8 I&M 2.6 — 2.6 December 31, 2015 Company Liabilities for Contracts with Cross Default Provisions Prior to Contractual Netting Arrangements Amount of Cash Collateral Posted Additional Settlement Liability if Cross Default Provision is Triggered (in millions) AEP $ 300.1 $ 0.8 $ 240.6 APCo 3.7 — 3.7 I&M 2.5 — 2.5 |
Appalachian Power Co [Member] | |
Notional Volume of Derivative Instruments | Notional Volume of Derivative Instruments March 31, 2016 Primary Risk Exposure Unit of Measure AEP APCo I&M OPCo PSO SWEPCo (in millions) Commodity: Power MWhs 272.7 25.0 13.9 11.6 4.8 5.9 Coal Tons 3.4 — 1.1 — — 2.3 Natural Gas MMBtus 42.7 0.3 0.2 — 0.2 0.2 Heating Oil and Gasoline Gallons 6.9 1.3 0.6 1.5 0.8 0.9 Interest Rate USD $ 101.9 $ 1.2 $ 0.8 $ — $ — $ — Interest Rate and Foreign Currency USD $ 559.3 $ — $ — $ — $ — $ — Notional Volume of Derivative Instruments December 31, 2015 Primary Risk Exposure Unit of Measure AEP APCo I&M OPCo PSO SWEPCo (in millions) Commodity: Power MWhs 317.8 40.9 22.8 13.3 11.3 14.0 Coal Tons 4.4 — 1.6 — — 2.8 Natural Gas MMBtus 38.2 0.3 0.2 — 0.2 0.2 Heating Oil and Gasoline Gallons 7.4 1.4 0.7 1.6 0.8 0.9 Interest Rate USD $ 113.5 $ 2.4 $ 1.6 $ — $ — $ — Interest Rate and Foreign Currency USD $ 560.3 $ — $ — $ — $ — $ — |
Cash Collateral Netting | March 31, 2016 December 31, 2015 Company Cash Collateral Received Netted Against Risk Management Assets Cash Collateral Paid Netted Against Risk Management Liabilities Cash Collateral Received Netted Against Risk Management Assets Cash Collateral Paid Netted Against Risk Management Liabilities (in millions) AEP $ 11.8 $ 43.0 $ 5.8 $ 44.4 APCo — 0.6 — 3.1 I&M — 0.1 — 0.6 OPCo — 0.2 — 0.5 PSO — 0.1 — 0.3 SWEPCo — 0.2 — 0.3 |
Fair Value of Derivative Instruments | APCo Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 24.1 $ (12.2 ) $ 11.9 Long-term Risk Management Assets - Nonaffiliated 1.0 (0.7 ) 0.3 Total Assets 25.1 (12.9 ) 12.2 Current Risk Management Liabilities - Nonaffiliated 23.2 (12.8 ) 10.4 Long-term Risk Management Liabilities - Nonaffiliated 0.8 (0.7 ) 0.1 Total Liabilities 24.0 (13.5 ) 10.5 Total MTM Derivative Contract Net Assets $ 1.1 $ 0.6 $ 1.7 APCo Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 25.9 $ (10.3 ) $ 15.6 Long-term Risk Management Assets - Nonaffiliated 0.3 (0.2 ) 0.1 Total Assets 26.2 (10.5 ) 15.7 Current Risk Management Liabilities - Nonaffiliated 18.1 (13.3 ) 4.8 Long-term Risk Management Liabilities - Nonaffiliated 0.3 (0.2 ) 0.1 Total Liabilities 18.4 (13.5 ) 4.9 Total MTM Derivative Contract Net Assets $ 7.8 $ 3.0 $ 10.8 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. |
Amount of Gain (Loss) Recognized on Risk Management Contracts | Amount of Gain (Loss) Recognized on Risk Management Contracts For the Three Months Ended March 31, 2016 Location of Gain (Loss) AEP APCo I&M OPCo PSO SWEPCo (in millions) Vertically Integrated Utilities Revenues $ 0.6 $ — $ — $ — $ — $ — Transmission and Distribution Utilities Revenues (3.5 ) — — — — — Generation & Marketing Revenues 19.8 — — — — — Electric Generation, Transmission and Distribution Revenues — (0.8 ) 1.6 (3.5 ) — — Sales to AEP Affiliates — 1.1 4.0 — — — Purchased Electricity for Resale 2.1 1.4 0.1 — — — Other Operation Expense (0.7 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Maintenance Expense (0.8 ) (0.2 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Regulatory Assets (a) (11.1 ) 0.2 0.3 (11.4 ) (0.5 ) 0.1 Regulatory Liabilities (a) 12.7 15.9 3.9 (15.2 ) — 4.5 Total Gain (Loss) on Risk Management Contracts $ 19.1 $ 17.5 $ 9.7 $ (30.3 ) $ (0.7 ) $ 4.4 Amount of Gain (Loss) Recognized on Risk Management Contracts For the Three Months Ended March 31, 2015 Location of Gain (Loss) AEP APCo I&M OPCo PSO SWEPCo (in millions) Vertically Integrated Utilities Revenues $ 4.4 $ — $ — $ — $ — $ — Generation & Marketing Revenues 48.8 — — — — — Electric Generation, Transmission and Distribution Revenues — 0.6 2.2 — — — Purchased Electricity for Resale 3.3 0.7 0.3 — — — Other Operation Expense (0.9 ) (0.1 ) (0.1 ) (0.2 ) (0.1 ) (0.1 ) Maintenance Expense (0.8 ) (0.2 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Regulatory Assets (a) (4.1 ) 0.7 (0.5 ) — (0.8 ) (3.5 ) Regulatory Liabilities (a) 3.9 1.7 (3.0 ) 4.7 — 3.9 Total Gain (Loss) on Risk Management Contracts $ 54.6 $ 3.4 $ (1.2 ) $ 4.4 $ (1.0 ) $ 0.2 (a) Represents realized and unrealized gains and losses subject to regulatory accounting treatment recorded as either current or noncurrent on the condensed balance sheets. |
Impact of Cash Flow Hedges on the Condensed Balance Sheet | Impact of Cash Flow Hedges on the Registrant Subsidiaries’ Condensed Balance Sheets March 31, 2016 December 31, 2015 Interest Rate and Foreign Currency Company AOCI Gain (Loss) Net of Tax Expected to be Reclassified to Net Income During the Next Twelve Months AOCI Gain (Loss) Net of Tax Expected to be Reclassified to Net Income During the Next Twelve Months (in millions) APCo $ 3.4 $ 0.7 $ 3.6 $ 0.7 I&M (12.9 ) (1.3 ) (13.3 ) (1.3 ) OPCo 3.9 1.1 4.3 1.2 PSO 4.0 0.8 4.2 0.8 SWEPCo (8.6 ) (1.7 ) (9.1 ) (1.7 ) |
Collateral Required Under Various Triggering Events | March 31, 2016 December 31, 2015 Company Amount of Collateral That Would Have Been Required to Post Attributable to RTOs and ISOs Amount of Collateral Attributable to Other Contracts Amount of Collateral Amount of (in millions) AEP $ 23.6 $ 298.3 (a) $ 17.5 $ 297.8 (a) APCo 2.2 0.1 4.9 0.1 I&M 1.4 — 3.3 0.1 PSO 2.1 3.2 — 3.2 SWEPCo 2.7 0.1 — 0.1 (a) Represents the amount of collateral AEP subsidiaries would have been required to post for other significant non-derivative contracts including AGR jointly owned plant contracts and various other commodity related contacts. |
Liabilities Subject to Cross Default Provisions | March 31, 2016 Company Liabilities for Contracts with Cross Default Provisions Prior to Contractual Netting Arrangements Amount of Cash Collateral Posted Additional Settlement Liability if Cross Default Provision is Triggered (in millions) AEP $ 328.8 $ — $ 276.2 APCo 3.8 — 3.8 I&M 2.6 — 2.6 December 31, 2015 Company Liabilities for Contracts with Cross Default Provisions Prior to Contractual Netting Arrangements Amount of Cash Collateral Posted Additional Settlement Liability if Cross Default Provision is Triggered (in millions) AEP $ 300.1 $ 0.8 $ 240.6 APCo 3.7 — 3.7 I&M 2.5 — 2.5 |
Indiana Michigan Power Co [Member] | |
Notional Volume of Derivative Instruments | Notional Volume of Derivative Instruments March 31, 2016 Primary Risk Exposure Unit of Measure AEP APCo I&M OPCo PSO SWEPCo (in millions) Commodity: Power MWhs 272.7 25.0 13.9 11.6 4.8 5.9 Coal Tons 3.4 — 1.1 — — 2.3 Natural Gas MMBtus 42.7 0.3 0.2 — 0.2 0.2 Heating Oil and Gasoline Gallons 6.9 1.3 0.6 1.5 0.8 0.9 Interest Rate USD $ 101.9 $ 1.2 $ 0.8 $ — $ — $ — Interest Rate and Foreign Currency USD $ 559.3 $ — $ — $ — $ — $ — Notional Volume of Derivative Instruments December 31, 2015 Primary Risk Exposure Unit of Measure AEP APCo I&M OPCo PSO SWEPCo (in millions) Commodity: Power MWhs 317.8 40.9 22.8 13.3 11.3 14.0 Coal Tons 4.4 — 1.6 — — 2.8 Natural Gas MMBtus 38.2 0.3 0.2 — 0.2 0.2 Heating Oil and Gasoline Gallons 7.4 1.4 0.7 1.6 0.8 0.9 Interest Rate USD $ 113.5 $ 2.4 $ 1.6 $ — $ — $ — Interest Rate and Foreign Currency USD $ 560.3 $ — $ — $ — $ — $ — |
Cash Collateral Netting | March 31, 2016 December 31, 2015 Company Cash Collateral Received Netted Against Risk Management Assets Cash Collateral Paid Netted Against Risk Management Liabilities Cash Collateral Received Netted Against Risk Management Assets Cash Collateral Paid Netted Against Risk Management Liabilities (in millions) AEP $ 11.8 $ 43.0 $ 5.8 $ 44.4 APCo — 0.6 — 3.1 I&M — 0.1 — 0.6 OPCo — 0.2 — 0.5 PSO — 0.1 — 0.3 SWEPCo — 0.2 — 0.3 |
Fair Value of Derivative Instruments | I&M Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 17.6 $ (8.5 ) $ 9.1 Long-term Risk Management Assets - Nonaffiliated 0.9 (0.5 ) 0.4 Total Assets 18.5 (9.0 ) 9.5 Current Risk Management Liabilities - Nonaffiliated 15.0 (8.6 ) 6.4 Long-term Risk Management Liabilities - Nonaffiliated 1.5 (0.5 ) 1.0 Total Liabilities 16.5 (9.1 ) 7.4 Total MTM Derivative Contract Net Assets $ 2.0 $ 0.1 $ 2.1 I&M Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets - Nonaffiliated and Affiliated $ 22.8 $ (10.5 ) $ 12.3 Long-term Risk Management Assets - Nonaffiliated 0.6 (0.6 ) — Total Assets 23.4 (11.1 ) 12.3 Current Risk Management Liabilities - Nonaffiliated 17.0 (10.7 ) 6.3 Long-term Risk Management Liabilities - Nonaffiliated 2.6 (1.0 ) 1.6 Total Liabilities 19.6 (11.7 ) 7.9 Total MTM Derivative Contract Net Assets $ 3.8 $ 0.6 $ 4.4 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. |
Amount of Gain (Loss) Recognized on Risk Management Contracts | Amount of Gain (Loss) Recognized on Risk Management Contracts For the Three Months Ended March 31, 2016 Location of Gain (Loss) AEP APCo I&M OPCo PSO SWEPCo (in millions) Vertically Integrated Utilities Revenues $ 0.6 $ — $ — $ — $ — $ — Transmission and Distribution Utilities Revenues (3.5 ) — — — — — Generation & Marketing Revenues 19.8 — — — — — Electric Generation, Transmission and Distribution Revenues — (0.8 ) 1.6 (3.5 ) — — Sales to AEP Affiliates — 1.1 4.0 — — — Purchased Electricity for Resale 2.1 1.4 0.1 — — — Other Operation Expense (0.7 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Maintenance Expense (0.8 ) (0.2 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Regulatory Assets (a) (11.1 ) 0.2 0.3 (11.4 ) (0.5 ) 0.1 Regulatory Liabilities (a) 12.7 15.9 3.9 (15.2 ) — 4.5 Total Gain (Loss) on Risk Management Contracts $ 19.1 $ 17.5 $ 9.7 $ (30.3 ) $ (0.7 ) $ 4.4 Amount of Gain (Loss) Recognized on Risk Management Contracts For the Three Months Ended March 31, 2015 Location of Gain (Loss) AEP APCo I&M OPCo PSO SWEPCo (in millions) Vertically Integrated Utilities Revenues $ 4.4 $ — $ — $ — $ — $ — Generation & Marketing Revenues 48.8 — — — — — Electric Generation, Transmission and Distribution Revenues — 0.6 2.2 — — — Purchased Electricity for Resale 3.3 0.7 0.3 — — — Other Operation Expense (0.9 ) (0.1 ) (0.1 ) (0.2 ) (0.1 ) (0.1 ) Maintenance Expense (0.8 ) (0.2 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Regulatory Assets (a) (4.1 ) 0.7 (0.5 ) — (0.8 ) (3.5 ) Regulatory Liabilities (a) 3.9 1.7 (3.0 ) 4.7 — 3.9 Total Gain (Loss) on Risk Management Contracts $ 54.6 $ 3.4 $ (1.2 ) $ 4.4 $ (1.0 ) $ 0.2 (a) Represents realized and unrealized gains and losses subject to regulatory accounting treatment recorded as either current or noncurrent on the condensed balance sheets. |
Impact of Cash Flow Hedges on the Condensed Balance Sheet | Impact of Cash Flow Hedges on the Registrant Subsidiaries’ Condensed Balance Sheets March 31, 2016 December 31, 2015 Interest Rate and Foreign Currency Company AOCI Gain (Loss) Net of Tax Expected to be Reclassified to Net Income During the Next Twelve Months AOCI Gain (Loss) Net of Tax Expected to be Reclassified to Net Income During the Next Twelve Months (in millions) APCo $ 3.4 $ 0.7 $ 3.6 $ 0.7 I&M (12.9 ) (1.3 ) (13.3 ) (1.3 ) OPCo 3.9 1.1 4.3 1.2 PSO 4.0 0.8 4.2 0.8 SWEPCo (8.6 ) (1.7 ) (9.1 ) (1.7 ) |
Collateral Required Under Various Triggering Events | March 31, 2016 December 31, 2015 Company Amount of Collateral That Would Have Been Required to Post Attributable to RTOs and ISOs Amount of Collateral Attributable to Other Contracts Amount of Collateral Amount of (in millions) AEP $ 23.6 $ 298.3 (a) $ 17.5 $ 297.8 (a) APCo 2.2 0.1 4.9 0.1 I&M 1.4 — 3.3 0.1 PSO 2.1 3.2 — 3.2 SWEPCo 2.7 0.1 — 0.1 (a) Represents the amount of collateral AEP subsidiaries would have been required to post for other significant non-derivative contracts including AGR jointly owned plant contracts and various other commodity related contacts. |
Liabilities Subject to Cross Default Provisions | March 31, 2016 Company Liabilities for Contracts with Cross Default Provisions Prior to Contractual Netting Arrangements Amount of Cash Collateral Posted Additional Settlement Liability if Cross Default Provision is Triggered (in millions) AEP $ 328.8 $ — $ 276.2 APCo 3.8 — 3.8 I&M 2.6 — 2.6 December 31, 2015 Company Liabilities for Contracts with Cross Default Provisions Prior to Contractual Netting Arrangements Amount of Cash Collateral Posted Additional Settlement Liability if Cross Default Provision is Triggered (in millions) AEP $ 300.1 $ 0.8 $ 240.6 APCo 3.7 — 3.7 I&M 2.5 — 2.5 |
Ohio Power Co [Member] | |
Notional Volume of Derivative Instruments | Notional Volume of Derivative Instruments March 31, 2016 Primary Risk Exposure Unit of Measure AEP APCo I&M OPCo PSO SWEPCo (in millions) Commodity: Power MWhs 272.7 25.0 13.9 11.6 4.8 5.9 Coal Tons 3.4 — 1.1 — — 2.3 Natural Gas MMBtus 42.7 0.3 0.2 — 0.2 0.2 Heating Oil and Gasoline Gallons 6.9 1.3 0.6 1.5 0.8 0.9 Interest Rate USD $ 101.9 $ 1.2 $ 0.8 $ — $ — $ — Interest Rate and Foreign Currency USD $ 559.3 $ — $ — $ — $ — $ — Notional Volume of Derivative Instruments December 31, 2015 Primary Risk Exposure Unit of Measure AEP APCo I&M OPCo PSO SWEPCo (in millions) Commodity: Power MWhs 317.8 40.9 22.8 13.3 11.3 14.0 Coal Tons 4.4 — 1.6 — — 2.8 Natural Gas MMBtus 38.2 0.3 0.2 — 0.2 0.2 Heating Oil and Gasoline Gallons 7.4 1.4 0.7 1.6 0.8 0.9 Interest Rate USD $ 113.5 $ 2.4 $ 1.6 $ — $ — $ — Interest Rate and Foreign Currency USD $ 560.3 $ — $ — $ — $ — $ — |
Cash Collateral Netting | March 31, 2016 December 31, 2015 Company Cash Collateral Received Netted Against Risk Management Assets Cash Collateral Paid Netted Against Risk Management Liabilities Cash Collateral Received Netted Against Risk Management Assets Cash Collateral Paid Netted Against Risk Management Liabilities (in millions) AEP $ 11.8 $ 43.0 $ 5.8 $ 44.4 APCo — 0.6 — 3.1 I&M — 0.1 — 0.6 OPCo — 0.2 — 0.5 PSO — 0.1 — 0.3 SWEPCo — 0.2 — 0.3 |
Fair Value of Derivative Instruments | OPCo Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ — $ — $ — Long-term Risk Management Assets — — — Total Assets — — — Current Risk Management Liabilities 5.7 (0.2 ) 5.5 Long-term Risk Management Liabilities 5.8 — 5.8 Total Liabilities 11.5 (0.2 ) 11.3 Total MTM Derivative Contract Net Assets (Liabilities) $ (11.5 ) $ 0.2 $ (11.3 ) OPCo Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ — $ — $ — Long-term Risk Management Assets 19.2 — 19.2 Total Assets 19.2 — 19.2 Current Risk Management Liabilities 4.1 (0.5 ) 3.6 Long-term Risk Management Liabilities — — — Total Liabilities 4.1 (0.5 ) 3.6 Total MTM Derivative Contract Net Assets $ 15.1 $ 0.5 $ 15.6 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. |
Amount of Gain (Loss) Recognized on Risk Management Contracts | Amount of Gain (Loss) Recognized on Risk Management Contracts For the Three Months Ended March 31, 2016 Location of Gain (Loss) AEP APCo I&M OPCo PSO SWEPCo (in millions) Vertically Integrated Utilities Revenues $ 0.6 $ — $ — $ — $ — $ — Transmission and Distribution Utilities Revenues (3.5 ) — — — — — Generation & Marketing Revenues 19.8 — — — — — Electric Generation, Transmission and Distribution Revenues — (0.8 ) 1.6 (3.5 ) — — Sales to AEP Affiliates — 1.1 4.0 — — — Purchased Electricity for Resale 2.1 1.4 0.1 — — — Other Operation Expense (0.7 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Maintenance Expense (0.8 ) (0.2 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Regulatory Assets (a) (11.1 ) 0.2 0.3 (11.4 ) (0.5 ) 0.1 Regulatory Liabilities (a) 12.7 15.9 3.9 (15.2 ) — 4.5 Total Gain (Loss) on Risk Management Contracts $ 19.1 $ 17.5 $ 9.7 $ (30.3 ) $ (0.7 ) $ 4.4 Amount of Gain (Loss) Recognized on Risk Management Contracts For the Three Months Ended March 31, 2015 Location of Gain (Loss) AEP APCo I&M OPCo PSO SWEPCo (in millions) Vertically Integrated Utilities Revenues $ 4.4 $ — $ — $ — $ — $ — Generation & Marketing Revenues 48.8 — — — — — Electric Generation, Transmission and Distribution Revenues — 0.6 2.2 — — — Purchased Electricity for Resale 3.3 0.7 0.3 — — — Other Operation Expense (0.9 ) (0.1 ) (0.1 ) (0.2 ) (0.1 ) (0.1 ) Maintenance Expense (0.8 ) (0.2 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Regulatory Assets (a) (4.1 ) 0.7 (0.5 ) — (0.8 ) (3.5 ) Regulatory Liabilities (a) 3.9 1.7 (3.0 ) 4.7 — 3.9 Total Gain (Loss) on Risk Management Contracts $ 54.6 $ 3.4 $ (1.2 ) $ 4.4 $ (1.0 ) $ 0.2 (a) Represents realized and unrealized gains and losses subject to regulatory accounting treatment recorded as either current or noncurrent on the condensed balance sheets. |
Impact of Cash Flow Hedges on the Condensed Balance Sheet | Impact of Cash Flow Hedges on the Registrant Subsidiaries’ Condensed Balance Sheets March 31, 2016 December 31, 2015 Interest Rate and Foreign Currency Company AOCI Gain (Loss) Net of Tax Expected to be Reclassified to Net Income During the Next Twelve Months AOCI Gain (Loss) Net of Tax Expected to be Reclassified to Net Income During the Next Twelve Months (in millions) APCo $ 3.4 $ 0.7 $ 3.6 $ 0.7 I&M (12.9 ) (1.3 ) (13.3 ) (1.3 ) OPCo 3.9 1.1 4.3 1.2 PSO 4.0 0.8 4.2 0.8 SWEPCo (8.6 ) (1.7 ) (9.1 ) (1.7 ) |
Public Service Co Of Oklahoma [Member] | |
Notional Volume of Derivative Instruments | Notional Volume of Derivative Instruments March 31, 2016 Primary Risk Exposure Unit of Measure AEP APCo I&M OPCo PSO SWEPCo (in millions) Commodity: Power MWhs 272.7 25.0 13.9 11.6 4.8 5.9 Coal Tons 3.4 — 1.1 — — 2.3 Natural Gas MMBtus 42.7 0.3 0.2 — 0.2 0.2 Heating Oil and Gasoline Gallons 6.9 1.3 0.6 1.5 0.8 0.9 Interest Rate USD $ 101.9 $ 1.2 $ 0.8 $ — $ — $ — Interest Rate and Foreign Currency USD $ 559.3 $ — $ — $ — $ — $ — Notional Volume of Derivative Instruments December 31, 2015 Primary Risk Exposure Unit of Measure AEP APCo I&M OPCo PSO SWEPCo (in millions) Commodity: Power MWhs 317.8 40.9 22.8 13.3 11.3 14.0 Coal Tons 4.4 — 1.6 — — 2.8 Natural Gas MMBtus 38.2 0.3 0.2 — 0.2 0.2 Heating Oil and Gasoline Gallons 7.4 1.4 0.7 1.6 0.8 0.9 Interest Rate USD $ 113.5 $ 2.4 $ 1.6 $ — $ — $ — Interest Rate and Foreign Currency USD $ 560.3 $ — $ — $ — $ — $ — |
Cash Collateral Netting | March 31, 2016 December 31, 2015 Company Cash Collateral Received Netted Against Risk Management Assets Cash Collateral Paid Netted Against Risk Management Liabilities Cash Collateral Received Netted Against Risk Management Assets Cash Collateral Paid Netted Against Risk Management Liabilities (in millions) AEP $ 11.8 $ 43.0 $ 5.8 $ 44.4 APCo — 0.6 — 3.1 I&M — 0.1 — 0.6 OPCo — 0.2 — 0.5 PSO — 0.1 — 0.3 SWEPCo — 0.2 — 0.3 |
Fair Value of Derivative Instruments | PSO Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.7 $ — $ 0.7 Long-term Risk Management Assets — — — Total Assets 0.7 — 0.7 Current Risk Management Liabilities 0.3 (0.1 ) 0.2 Long-term Risk Management Liabilities — — — Total Liabilities 0.3 (0.1 ) 0.2 Total MTM Derivative Contract Net Assets $ 0.4 $ 0.1 $ 0.5 PSO Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.6 $ — $ 0.6 Long-term Risk Management Assets — — — Total Assets 0.6 — 0.6 Current Risk Management Liabilities 0.5 (0.3 ) 0.2 Long-term Risk Management Liabilities — — — Total Liabilities 0.5 (0.3 ) 0.2 Total MTM Derivative Contract Net Assets $ 0.1 $ 0.3 $ 0.4 (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. |
Amount of Gain (Loss) Recognized on Risk Management Contracts | Amount of Gain (Loss) Recognized on Risk Management Contracts For the Three Months Ended March 31, 2016 Location of Gain (Loss) AEP APCo I&M OPCo PSO SWEPCo (in millions) Vertically Integrated Utilities Revenues $ 0.6 $ — $ — $ — $ — $ — Transmission and Distribution Utilities Revenues (3.5 ) — — — — — Generation & Marketing Revenues 19.8 — — — — — Electric Generation, Transmission and Distribution Revenues — (0.8 ) 1.6 (3.5 ) — — Sales to AEP Affiliates — 1.1 4.0 — — — Purchased Electricity for Resale 2.1 1.4 0.1 — — — Other Operation Expense (0.7 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Maintenance Expense (0.8 ) (0.2 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Regulatory Assets (a) (11.1 ) 0.2 0.3 (11.4 ) (0.5 ) 0.1 Regulatory Liabilities (a) 12.7 15.9 3.9 (15.2 ) — 4.5 Total Gain (Loss) on Risk Management Contracts $ 19.1 $ 17.5 $ 9.7 $ (30.3 ) $ (0.7 ) $ 4.4 Amount of Gain (Loss) Recognized on Risk Management Contracts For the Three Months Ended March 31, 2015 Location of Gain (Loss) AEP APCo I&M OPCo PSO SWEPCo (in millions) Vertically Integrated Utilities Revenues $ 4.4 $ — $ — $ — $ — $ — Generation & Marketing Revenues 48.8 — — — — — Electric Generation, Transmission and Distribution Revenues — 0.6 2.2 — — — Purchased Electricity for Resale 3.3 0.7 0.3 — — — Other Operation Expense (0.9 ) (0.1 ) (0.1 ) (0.2 ) (0.1 ) (0.1 ) Maintenance Expense (0.8 ) (0.2 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Regulatory Assets (a) (4.1 ) 0.7 (0.5 ) — (0.8 ) (3.5 ) Regulatory Liabilities (a) 3.9 1.7 (3.0 ) 4.7 — 3.9 Total Gain (Loss) on Risk Management Contracts $ 54.6 $ 3.4 $ (1.2 ) $ 4.4 $ (1.0 ) $ 0.2 (a) Represents realized and unrealized gains and losses subject to regulatory accounting treatment recorded as either current or noncurrent on the condensed balance sheets. |
Impact of Cash Flow Hedges on the Condensed Balance Sheet | Impact of Cash Flow Hedges on the Registrant Subsidiaries’ Condensed Balance Sheets March 31, 2016 December 31, 2015 Interest Rate and Foreign Currency Company AOCI Gain (Loss) Net of Tax Expected to be Reclassified to Net Income During the Next Twelve Months AOCI Gain (Loss) Net of Tax Expected to be Reclassified to Net Income During the Next Twelve Months (in millions) APCo $ 3.4 $ 0.7 $ 3.6 $ 0.7 I&M (12.9 ) (1.3 ) (13.3 ) (1.3 ) OPCo 3.9 1.1 4.3 1.2 PSO 4.0 0.8 4.2 0.8 SWEPCo (8.6 ) (1.7 ) (9.1 ) (1.7 ) |
Collateral Required Under Various Triggering Events | March 31, 2016 December 31, 2015 Company Amount of Collateral That Would Have Been Required to Post Attributable to RTOs and ISOs Amount of Collateral Attributable to Other Contracts Amount of Collateral Amount of (in millions) AEP $ 23.6 $ 298.3 (a) $ 17.5 $ 297.8 (a) APCo 2.2 0.1 4.9 0.1 I&M 1.4 — 3.3 0.1 PSO 2.1 3.2 — 3.2 SWEPCo 2.7 0.1 — 0.1 (a) Represents the amount of collateral AEP subsidiaries would have been required to post for other significant non-derivative contracts including AGR jointly owned plant contracts and various other commodity related contacts. |
Southwestern Electric Power Co [Member] | |
Notional Volume of Derivative Instruments | Notional Volume of Derivative Instruments March 31, 2016 Primary Risk Exposure Unit of Measure AEP APCo I&M OPCo PSO SWEPCo (in millions) Commodity: Power MWhs 272.7 25.0 13.9 11.6 4.8 5.9 Coal Tons 3.4 — 1.1 — — 2.3 Natural Gas MMBtus 42.7 0.3 0.2 — 0.2 0.2 Heating Oil and Gasoline Gallons 6.9 1.3 0.6 1.5 0.8 0.9 Interest Rate USD $ 101.9 $ 1.2 $ 0.8 $ — $ — $ — Interest Rate and Foreign Currency USD $ 559.3 $ — $ — $ — $ — $ — Notional Volume of Derivative Instruments December 31, 2015 Primary Risk Exposure Unit of Measure AEP APCo I&M OPCo PSO SWEPCo (in millions) Commodity: Power MWhs 317.8 40.9 22.8 13.3 11.3 14.0 Coal Tons 4.4 — 1.6 — — 2.8 Natural Gas MMBtus 38.2 0.3 0.2 — 0.2 0.2 Heating Oil and Gasoline Gallons 7.4 1.4 0.7 1.6 0.8 0.9 Interest Rate USD $ 113.5 $ 2.4 $ 1.6 $ — $ — $ — Interest Rate and Foreign Currency USD $ 560.3 $ — $ — $ — $ — $ — |
Cash Collateral Netting | March 31, 2016 December 31, 2015 Company Cash Collateral Received Netted Against Risk Management Assets Cash Collateral Paid Netted Against Risk Management Liabilities Cash Collateral Received Netted Against Risk Management Assets Cash Collateral Paid Netted Against Risk Management Liabilities (in millions) AEP $ 11.8 $ 43.0 $ 5.8 $ 44.4 APCo — 0.6 — 3.1 I&M — 0.1 — 0.6 OPCo — 0.2 — 0.5 PSO — 0.1 — 0.3 SWEPCo — 0.2 — 0.3 |
Fair Value of Derivative Instruments | SWEPCo Fair Value of Derivative Instruments March 31, 2016 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.9 $ (0.1 ) $ 0.8 Long-term Risk Management Assets — — — Total Assets 0.9 (0.1 ) 0.8 Current Risk Management Liabilities 3.8 (0.3 ) 3.5 Long-term Risk Management Liabilities 1.8 — 1.8 Total Liabilities 5.6 (0.3 ) 5.3 Total MTM Derivative Contract Net Assets (Liabilities) $ (4.7 ) $ 0.2 $ (4.5 ) SWEPCo Fair Value of Derivative Instruments December 31, 2015 Risk Management Contracts - Commodity (a) Gross Amounts Offset in the Statement of Financial Position (b) Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position (c) Balance Sheet Location (in millions) Current Risk Management Assets $ 0.8 $ — $ 0.8 Long-term Risk Management Assets — — — Total Assets 0.8 — 0.8 Current Risk Management Liabilities 3.4 (0.3 ) 3.1 Long-term Risk Management Liabilities 2.1 — 2.1 Total Liabilities 5.5 (0.3 ) 5.2 Total MTM Derivative Contract Net Assets (Liabilities) $ (4.7 ) $ 0.3 $ (4.4 ) (a) Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” (b) Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” (c) There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. |
Amount of Gain (Loss) Recognized on Risk Management Contracts | Amount of Gain (Loss) Recognized on Risk Management Contracts For the Three Months Ended March 31, 2016 Location of Gain (Loss) AEP APCo I&M OPCo PSO SWEPCo (in millions) Vertically Integrated Utilities Revenues $ 0.6 $ — $ — $ — $ — $ — Transmission and Distribution Utilities Revenues (3.5 ) — — — — — Generation & Marketing Revenues 19.8 — — — — — Electric Generation, Transmission and Distribution Revenues — (0.8 ) 1.6 (3.5 ) — — Sales to AEP Affiliates — 1.1 4.0 — — — Purchased Electricity for Resale 2.1 1.4 0.1 — — — Other Operation Expense (0.7 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Maintenance Expense (0.8 ) (0.2 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Regulatory Assets (a) (11.1 ) 0.2 0.3 (11.4 ) (0.5 ) 0.1 Regulatory Liabilities (a) 12.7 15.9 3.9 (15.2 ) — 4.5 Total Gain (Loss) on Risk Management Contracts $ 19.1 $ 17.5 $ 9.7 $ (30.3 ) $ (0.7 ) $ 4.4 Amount of Gain (Loss) Recognized on Risk Management Contracts For the Three Months Ended March 31, 2015 Location of Gain (Loss) AEP APCo I&M OPCo PSO SWEPCo (in millions) Vertically Integrated Utilities Revenues $ 4.4 $ — $ — $ — $ — $ — Generation & Marketing Revenues 48.8 — — — — — Electric Generation, Transmission and Distribution Revenues — 0.6 2.2 — — — Purchased Electricity for Resale 3.3 0.7 0.3 — — — Other Operation Expense (0.9 ) (0.1 ) (0.1 ) (0.2 ) (0.1 ) (0.1 ) Maintenance Expense (0.8 ) (0.2 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) Regulatory Assets (a) (4.1 ) 0.7 (0.5 ) — (0.8 ) (3.5 ) Regulatory Liabilities (a) 3.9 1.7 (3.0 ) 4.7 — 3.9 Total Gain (Loss) on Risk Management Contracts $ 54.6 $ 3.4 $ (1.2 ) $ 4.4 $ (1.0 ) $ 0.2 (a) Represents realized and unrealized gains and losses subject to regulatory accounting treatment recorded as either current or noncurrent on the condensed balance sheets. |
Impact of Cash Flow Hedges on the Condensed Balance Sheet | Impact of Cash Flow Hedges on the Registrant Subsidiaries’ Condensed Balance Sheets March 31, 2016 December 31, 2015 Interest Rate and Foreign Currency Company AOCI Gain (Loss) Net of Tax Expected to be Reclassified to Net Income During the Next Twelve Months AOCI Gain (Loss) Net of Tax Expected to be Reclassified to Net Income During the Next Twelve Months (in millions) APCo $ 3.4 $ 0.7 $ 3.6 $ 0.7 I&M (12.9 ) (1.3 ) (13.3 ) (1.3 ) OPCo 3.9 1.1 4.3 1.2 PSO 4.0 0.8 4.2 0.8 SWEPCo (8.6 ) (1.7 ) (9.1 ) (1.7 ) |
Collateral Required Under Various Triggering Events | March 31, 2016 December 31, 2015 Company Amount of Collateral That Would Have Been Required to Post Attributable to RTOs and ISOs Amount of Collateral Attributable to Other Contracts Amount of Collateral Amount of (in millions) AEP $ 23.6 $ 298.3 (a) $ 17.5 $ 297.8 (a) APCo 2.2 0.1 4.9 0.1 I&M 1.4 — 3.3 0.1 PSO 2.1 3.2 — 3.2 SWEPCo 2.7 0.1 — 0.1 (a) Represents the amount of collateral AEP subsidiaries would have been required to post for other significant non-derivative contracts including AGR jointly owned plant contracts and various other commodity related contacts. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Book Values and Fair Values of Long-term Debt | March 31, 2016 December 31, 2015 Company Book Value Fair Value Book Value Fair Value (in millions) AEP $ 19,782.6 $ 22,052.8 $ 19,572.7 $ 21,201.3 APCo 3,919.3 4,597.8 3,930.7 4,416.7 I&M 2,366.6 2,595.4 2,000.0 2,193.6 OPCo 2,135.5 2,515.4 2,157.7 2,472.7 PSO 1,286.3 1,463.6 1,286.1 1,402.9 SWEPCo 2,272.4 2,483.4 2,273.5 2,417.2 |
Other Temporary Investments | March 31, 2016 Other Temporary Investments Cost Gross Gains Gross Losses Fair Value (in millions) Restricted Cash (a) $ 147.4 $ — $ — $ 147.4 Fixed Income Securities – Mutual Funds 91.4 0.1 — 91.5 Equity Securities – Mutual Funds 13.9 11.7 — 25.6 Total Other Temporary Investments $ 252.7 $ 11.8 $ — $ 264.5 December 31, 2015 Other Temporary Investments Cost Gross Gains Gross Losses Fair Value (in millions) Restricted Cash (a) $ 271.0 $ — $ — $ 271.0 Fixed Income Securities – Mutual Funds 91.1 — (0.7 ) 90.4 Equity Securities – Mutual Funds 13.7 11.7 — 25.4 Total Other Temporary Investments $ 375.8 $ 11.7 $ (0.7 ) $ 386.8 (a) Primarily represents amounts held for the repayment of debt. |
Debt and Equity Securities Within Other Temporary Investments | Three Months Ended March 31, 2016 2015 (in millions) Proceeds from Investment Sales $ — $ — Purchases of Investments 0.4 0.4 Gross Realized Gains on Investment Sales — — Gross Realized Losses on Investment Sales — — |
Nuclear Trust Fund Investments | March 31, 2016 December 31, 2015 Fair Value Gross Unrealized Gains Other-Than-Temporary Impairments Fair Value Gross Unrealized Gains Other-Than-Temporary Impairments (in millions) Cash and Cash Equivalents $ 142.0 $ — $ — $ 168.3 $ — $ — Fixed Income Securities: United States Government 761.1 52.3 (2.1 ) 731.1 35.9 (2.6 ) Corporate Debt 68.9 4.9 (1.0 ) 57.9 3.2 (1.1 ) State and Local Government 29.0 1.2 (0.3 ) 22.2 1.1 (0.3 ) Subtotal Fixed Income Securities 859.0 58.4 (3.4 ) 811.2 40.2 (4.0 ) Equity Securities - Domestic 1,151.4 583.5 (78.9 ) 1,126.9 571.6 (79.3 ) Spent Nuclear Fuel and Decommissioning Trusts $ 2,152.4 $ 641.9 $ (82.3 ) $ 2,106.4 $ 611.8 $ (83.3 ) |
Securities Activity Within the Decommissioning and SNF Trusts | Three Months Ended March 31, 2016 2015 (in millions) Proceeds from Investment Sales $ 1,137.7 $ 228.2 Purchases of Investments 1,151.6 245.8 Gross Realized Gains on Investment Sales 15.8 11.2 Gross Realized Losses on Investment Sales 7.8 3.8 |
Contractual Maturities, Fair Value of Debt Securities in Nuclear Trusts | Fair Value of Fixed Income Securities (in millions) Within 1 year $ 175.4 1 year – 5 years 369.6 5 years – 10 years 133.0 After 10 years 181.0 Total $ 859.0 |
Fair Value, Assets and Liabilities Measured on Recurring Basis | (a) Amounts in “Other’’ column primarily represent cash deposits in bank accounts with financial institutions or with third parties. Level 1 and Level 2 amounts primarily represent investments in money market funds. (b) Amounts represent publicly traded equity securities and equity-based mutual funds. (c) Amounts in “Other’’ column primarily represent counterparty netting of risk management and hedging contracts and associated cash collateral under the accounting guidance for “Derivatives and Hedging.’’ (d) The March 31, 2016 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(5) million in 2016 and $(5) million in periods 2017-2019; Level 2 matures $3 million in 2016, $9 million in periods 2017-2019, $3 million in periods 2020-2021 and $1 million in periods 2022-2032; Level 3 matures $17 million in 2016, $37 million in periods 2017-2019, $21 million in periods 2020-2021 and $69 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. (e) Amounts in “Other’’ column primarily represent accrued interest receivables from financial institutions. Level 1 amounts primarily represent investments in money market funds. (f) The December 31, 2015 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(9) million in 2016 and $(4) million in periods 2017-2019; Level 2 matures $2 million in 2016, $18 million in periods 2017-2019 and $4 million in periods 2020-2021; Level 3 matures $28 million in 2016, $29 million in periods 2017-2019, $19 million in periods 2020-2021 and $76 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. (g) Substantially comprised of power contracts for APCo, I&M and OPCo and coal contracts for PSO and SWEPCo. AEP Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 9.6 $ 4.4 $ — $ 176.4 $ 190.4 Other Temporary Investments Restricted Cash (a) 129.2 7.6 — 10.6 147.4 Fixed Income Securities – Mutual Funds 91.5 — — — 91.5 Equity Securities – Mutual Funds (b) 25.6 — — — 25.6 Total Other Temporary Investments 246.3 7.6 — 10.6 264.5 Risk Management Assets Risk Management Commodity Contracts (c) (d) 10.7 585.5 201.8 (346.0 ) 452.0 Cash Flow Hedges: Commodity Hedges (c) — 11.4 8.1 0.3 19.8 Fair Value Hedges — 0.5 — 0.4 0.9 Total Risk Management Assets 10.7 597.4 209.9 (345.3 ) 472.7 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 135.3 — — 6.7 142.0 Fixed Income Securities: United States Government — 761.1 — — 761.1 Corporate Debt — 68.9 — — 68.9 State and Local Government — 29.0 — — 29.0 Subtotal Fixed Income Securities — 859.0 — — 859.0 Equity Securities – Domestic (b) 1,151.4 — — — 1,151.4 Total Spent Nuclear Fuel and Decommissioning Trusts 1,286.7 859.0 — 6.7 2,152.4 Total Assets $ 1,553.3 $ 1,468.4 $ 209.9 $ (151.6 ) $ 3,080.0 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (d) $ 20.5 $ 569.2 $ 58.5 $ (377.2 ) $ 271.0 Cash Flow Hedges: Commodity Hedges (c) — 29.7 10.1 0.3 40.1 Interest Rate/Foreign Currency Hedges — 0.4 — — 0.4 Fair Value Hedges — — — 0.4 0.4 Total Risk Management Liabilities $ 20.5 $ 599.3 $ 68.6 $ (376.5 ) $ 311.9 AEP Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 3.9 $ 4.3 $ — $ 168.2 $ 176.4 Other Temporary Investments Restricted Cash (a) 230.0 7.7 — 33.3 271.0 Fixed Income Securities – Mutual Funds 90.4 — — — 90.4 Equity Securities – Mutual Funds (b) 25.4 — — — 25.4 Total Other Temporary Investments 345.8 7.7 — 33.3 386.8 Risk Management Assets Risk Management Commodity Contracts (c) (f) 11.5 495.0 219.7 (287.7 ) 438.5 Cash Flow Hedges: Commodity Hedges (c) — 15.9 1.0 0.7 17.6 Fair Value Hedges — — — 0.1 0.1 Total Risk Management Assets 11.5 510.9 220.7 (286.9 ) 456.2 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 160.5 — — 7.8 168.3 Fixed Income Securities: United States Government — 731.1 — — 731.1 Corporate Debt — 57.9 — — 57.9 State and Local Government — 22.2 — — 22.2 Subtotal Fixed Income Securities — 811.2 — — 811.2 Equity Securities – Domestic (b) 1,126.9 — — — 1,126.9 Total Spent Nuclear Fuel and Decommissioning Trusts 1,287.4 811.2 — 7.8 2,106.4 Total Assets $ 1,648.6 $ 1,334.1 $ 220.7 $ (77.6 ) $ 3,125.8 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (f) $ 24.1 $ 471.5 $ 67.3 $ (326.3 ) $ 236.6 Cash Flow Hedges: Commodity Hedges (c) — 18.9 6.5 0.7 26.1 Interest Rate/Foreign Currency Hedges — 0.4 — — 0.4 Fair Value Hedges — 3.0 — 0.1 3.1 Total Risk Management Liabilities $ 24.1 $ 493.8 $ 73.8 $ (325.5 ) $ 266.2 |
Changes in Fair Value of Net Trading Derivatives and Other Investments | Three Months Ended March 31, 2016 AEP APCo (a) I&M (a) OPCo PSO SWEPCo (in millions) Balance as of December 31, 2015 $ 146.9 $ 11.7 $ 4.3 $ 15.9 $ 0.6 $ 0.8 Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (b) (c) 23.5 15.3 2.5 (0.6 ) (0.8 ) 4.6 Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (b) 21.9 — — — — — Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income 1.3 — — — — — Purchases, Issuances and Settlements (d) (42.7 ) (27.7 ) (4.6 ) 1.4 0.5 (4.9 ) Transfers out of Level 3 (f) (g) 10.9 0.1 0.1 — — — Changes in Fair Value Allocated to Regulated Jurisdictions (h) (20.5 ) 3.2 1.4 (27.6 ) 0.3 0.2 Balance as of March 31, 2016 $ 141.3 $ 2.6 $ 3.7 $ (10.9 ) $ 0.6 $ 0.7 Three Months Ended March 31, 2015 AEP APCo I&M OPCo PSO SWEPCo (in millions) Balance as of December 31, 2014 $ 150.8 $ 15.8 $ 14.7 $ 48.4 $ (0.3 ) $ (0.5 ) Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (b) (c) 8.6 2.2 0.1 0.2 (0.3 ) 5.8 Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (b) 5.2 — — — — — Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income (1.9 ) — — — — — Purchases, Issuances and Settlements (d) (38.5 ) (13.4 ) (9.0 ) (6.8 ) 0.6 (5.3 ) Transfers into Level 3 (e) (f) 15.3 — — — — — Transfers out of Level 3 (f) (g) (12.4 ) — — — — — Changes in Fair Value Allocated to Regulated Jurisdictions (h) 3.5 1.4 (0.2 ) 4.1 (0.7 ) (1.2 ) Balance as of March 31, 2015 $ 130.6 $ 6.0 $ 5.6 $ 45.9 $ (0.7 ) $ (1.2 ) (a) Includes both affiliated and nonaffiliated transactions. (b) Included in revenues on the condensed statements of income. (c) Represents the change in fair value between the beginning of the reporting period and the settlement of the risk management commodity contract. (d) Represents the settlement of risk management commodity contracts for the reporting period. (e) Represents existing assets or liabilities that were previously categorized as Level 2. (f) Transfers are recognized based on their value at the beginning of the reporting period that the transfer occurred. (g) Represents existing assets or liabilities that were previously categorized as Level 3. (h) Relates to the net gains (losses) of those contracts that are not reflected on the condensed statements of income. These net gains (losses) are recorded as regulatory liabilities/assets. |
Significant Unobservable Inputs for Level 3 | (a) Represents market prices in dollars per MWh. (b) Represents average price of credit default swaps used to calculate counterparty credit risk, reported in basis points. Significant Unobservable Inputs March 31, 2016 AEP Significant Input/Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input Low High Average (in millions) Energy Contracts $ 207.6 $ 59.5 Discounted Cash Flow Forward Market Price (a) $ 8.77 $ 162.36 $ 45.45 Counterparty Credit Risk (b) 251 669 NA FTRs 2.3 9.1 Discounted Cash Flow Forward Market Price (a) $ (17.72 ) $ 10.50 $ 0.60 Total $ 209.9 $ 68.6 Significant Unobservable Inputs December 31, 2015 AEP Significant Input/Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input Low High Average (in millions) Energy Contracts $ 212.3 $ 70.3 Discounted Cash Flow Forward Market Price (a) $ 9.69 $ 165.36 $ 36.35 Counterparty Credit Risk (b) 670 FTRs 8.4 3.5 Discounted Cash Flow Forward Market Price (a) $ (6.99 ) $ 10.34 $ 1.10 Total $ 220.7 $ 73.8 |
Sensitivity of Fair Value Measurements | Sensitivity of Fair Value Measurements Significant Unobservable Input Position Change in Input Impact on Fair Value Measurement Forward Market Price Buy Increase (Decrease) Higher (Lower) Forward Market Price Sell Increase (Decrease) Lower (Higher) Counterparty Credit Risk Loss Increase (Decrease) Higher (Lower) Counterparty Credit Risk Gain Increase (Decrease) Lower (Higher) |
Appalachian Power Co [Member] | |
Book Values and Fair Values of Long-term Debt | March 31, 2016 December 31, 2015 Company Book Value Fair Value Book Value Fair Value (in millions) AEP $ 19,782.6 $ 22,052.8 $ 19,572.7 $ 21,201.3 APCo 3,919.3 4,597.8 3,930.7 4,416.7 I&M 2,366.6 2,595.4 2,000.0 2,193.6 OPCo 2,135.5 2,515.4 2,157.7 2,472.7 PSO 1,286.3 1,463.6 1,286.1 1,402.9 SWEPCo 2,272.4 2,483.4 2,273.5 2,417.2 |
Fair Value, Assets and Liabilities Measured on Recurring Basis | APCo Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ 7.5 $ — $ — $ 0.1 $ 7.6 Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) 0.2 16.2 8.2 (12.4 ) 12.2 Total Assets: $ 7.7 $ 16.2 $ 8.2 $ (12.3 ) $ 19.8 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.2 $ 17.7 $ 5.6 $ (13.0 ) $ 10.5 APCo Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ 14.8 $ — $ — $ 0.1 $ 14.9 Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) 0.2 13.9 12.2 (10.6 ) 15.7 Total Assets: $ 15.0 $ 13.9 $ 12.2 $ (10.5 ) $ 30.6 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.2 $ 17.8 $ 0.5 $ (13.6 ) $ 4.9 (a) Amounts in “Other’’ column primarily represent cash deposits in bank accounts with financial institutions or with third parties. Level 1 and Level 2 amounts primarily represent investments in money market funds. (b) Amounts represent publicly traded equity securities and equity-based mutual funds. (c) Amounts in “Other’’ column primarily represent counterparty netting of risk management and hedging contracts and associated cash collateral under the accounting guidance for “Derivatives and Hedging.’’ (d) The March 31, 2016 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(5) million in 2016 and $(5) million in periods 2017-2019; Level 2 matures $3 million in 2016, $9 million in periods 2017-2019, $3 million in periods 2020-2021 and $1 million in periods 2022-2032; Level 3 matures $17 million in 2016, $37 million in periods 2017-2019, $21 million in periods 2020-2021 and $69 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. (e) Amounts in “Other’’ column primarily represent accrued interest receivables from financial institutions. Level 1 amounts primarily represent investments in money market funds. (f) The December 31, 2015 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(9) million in 2016 and $(4) million in periods 2017-2019; Level 2 matures $2 million in 2016, $18 million in periods 2017-2019 and $4 million in periods 2020-2021; Level 3 matures $28 million in 2016, $29 million in periods 2017-2019, $19 million in periods 2020-2021 and $76 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. (g) Substantially comprised of power contracts for APCo, I&M and OPCo and coal contracts for PSO and SWEPCo. |
Changes in Fair Value of Net Trading Derivatives and Other Investments | Three Months Ended March 31, 2016 AEP APCo (a) I&M (a) OPCo PSO SWEPCo (in millions) Balance as of December 31, 2015 $ 146.9 $ 11.7 $ 4.3 $ 15.9 $ 0.6 $ 0.8 Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (b) (c) 23.5 15.3 2.5 (0.6 ) (0.8 ) 4.6 Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (b) 21.9 — — — — — Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income 1.3 — — — — — Purchases, Issuances and Settlements (d) (42.7 ) (27.7 ) (4.6 ) 1.4 0.5 (4.9 ) Transfers out of Level 3 (f) (g) 10.9 0.1 0.1 — — — Changes in Fair Value Allocated to Regulated Jurisdictions (h) (20.5 ) 3.2 1.4 (27.6 ) 0.3 0.2 Balance as of March 31, 2016 $ 141.3 $ 2.6 $ 3.7 $ (10.9 ) $ 0.6 $ 0.7 Three Months Ended March 31, 2015 AEP APCo I&M OPCo PSO SWEPCo (in millions) Balance as of December 31, 2014 $ 150.8 $ 15.8 $ 14.7 $ 48.4 $ (0.3 ) $ (0.5 ) Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (b) (c) 8.6 2.2 0.1 0.2 (0.3 ) 5.8 Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (b) 5.2 — — — — — Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income (1.9 ) — — — — — Purchases, Issuances and Settlements (d) (38.5 ) (13.4 ) (9.0 ) (6.8 ) 0.6 (5.3 ) Transfers into Level 3 (e) (f) 15.3 — — — — — Transfers out of Level 3 (f) (g) (12.4 ) — — — — — Changes in Fair Value Allocated to Regulated Jurisdictions (h) 3.5 1.4 (0.2 ) 4.1 (0.7 ) (1.2 ) Balance as of March 31, 2015 $ 130.6 $ 6.0 $ 5.6 $ 45.9 $ (0.7 ) $ (1.2 ) (a) Includes both affiliated and nonaffiliated transactions. (b) Included in revenues on the condensed statements of income. (c) Represents the change in fair value between the beginning of the reporting period and the settlement of the risk management commodity contract. (d) Represents the settlement of risk management commodity contracts for the reporting period. (e) Represents existing assets or liabilities that were previously categorized as Level 2. (f) Transfers are recognized based on their value at the beginning of the reporting period that the transfer occurred. (g) Represents existing assets or liabilities that were previously categorized as Level 3. (h) Relates to the net gains (losses) of those contracts that are not reflected on the condensed statements of income. These net gains (losses) are recorded as regulatory liabilities/assets. |
Significant Unobservable Inputs for Level 3 | (a) Represents market prices in dollars per MWh. (b) Represents average price of credit default swaps used to calculate counterparty credit risk, reported in basis points. Significant Unobservable Inputs March 31, 2016 APCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 8.2 $ 0.1 Discounted Cash Flow Forward Market Price $ 8.77 $ 47.05 $ 29.14 FTRs — 5.5 Discounted Cash Flow Forward Market Price 0.42 5.58 1.90 Total $ 8.2 $ 5.6 Significant Unobservable Inputs December 31, 2015 APCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 7.9 $ 0.2 Discounted Cash Flow Forward Market Price $ 12.61 $ 47.24 $ 32.38 FTRs 4.3 0.3 Discounted Cash Flow Forward Market Price (6.96 ) 8.43 1.34 Total $ 12.2 $ 0.5 |
Sensitivity of Fair Value Measurements | Sensitivity of Fair Value Measurements Significant Unobservable Input Position Change in Input Impact on Fair Value Measurement Forward Market Price Buy Increase (Decrease) Higher (Lower) Forward Market Price Sell Increase (Decrease) Lower (Higher) Counterparty Credit Risk Loss Increase (Decrease) Higher (Lower) Counterparty Credit Risk Gain Increase (Decrease) Lower (Higher) |
Indiana Michigan Power Co [Member] | |
Book Values and Fair Values of Long-term Debt | March 31, 2016 December 31, 2015 Company Book Value Fair Value Book Value Fair Value (in millions) AEP $ 19,782.6 $ 22,052.8 $ 19,572.7 $ 21,201.3 APCo 3,919.3 4,597.8 3,930.7 4,416.7 I&M 2,366.6 2,595.4 2,000.0 2,193.6 OPCo 2,135.5 2,515.4 2,157.7 2,472.7 PSO 1,286.3 1,463.6 1,286.1 1,402.9 SWEPCo 2,272.4 2,483.4 2,273.5 2,417.2 |
Nuclear Trust Fund Investments | March 31, 2016 December 31, 2015 Fair Value Gross Unrealized Gains Other-Than-Temporary Impairments Fair Value Gross Unrealized Gains Other-Than-Temporary Impairments (in millions) Cash and Cash Equivalents $ 142.0 $ — $ — $ 168.3 $ — $ — Fixed Income Securities: United States Government 761.1 52.3 (2.1 ) 731.1 35.9 (2.6 ) Corporate Debt 68.9 4.9 (1.0 ) 57.9 3.2 (1.1 ) State and Local Government 29.0 1.2 (0.3 ) 22.2 1.1 (0.3 ) Subtotal Fixed Income Securities 859.0 58.4 (3.4 ) 811.2 40.2 (4.0 ) Equity Securities - Domestic 1,151.4 583.5 (78.9 ) 1,126.9 571.6 (79.3 ) Spent Nuclear Fuel and Decommissioning Trusts $ 2,152.4 $ 641.9 $ (82.3 ) $ 2,106.4 $ 611.8 $ (83.3 ) |
Securities Activity Within the Decommissioning and SNF Trusts | Three Months Ended March 31, 2016 2015 (in millions) Proceeds from Investment Sales $ 1,137.7 $ 228.2 Purchases of Investments 1,151.6 245.8 Gross Realized Gains on Investment Sales 15.8 11.2 Gross Realized Losses on Investment Sales 7.8 3.8 |
Contractual Maturities, Fair Value of Debt Securities in Nuclear Trusts | Fair Value of Fixed Income Securities (in millions) Within 1 year $ 175.4 1 year – 5 years 369.6 5 years – 10 years 133.0 After 10 years 181.0 Total $ 859.0 |
Fair Value, Assets and Liabilities Measured on Recurring Basis | I&M Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 12.5 $ 5.5 $ (8.6 ) $ 9.5 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 135.3 — — 6.7 142.0 Fixed Income Securities: United States Government — 761.1 — — 761.1 Corporate Debt — 68.9 — — 68.9 State and Local Government — 29.0 — — 29.0 Subtotal Fixed Income Securities — 859.0 — — 859.0 Equity Securities - Domestic (b) 1,151.4 — — — 1,151.4 Total Spent Nuclear Fuel and Decommissioning Trusts 1,286.7 859.0 — 6.7 2,152.4 Total Assets $ 1,286.8 $ 871.5 $ 5.5 $ (1.9 ) $ 2,161.9 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 14.2 $ 1.8 $ (8.7 ) $ 7.4 I&M Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets - Nonaffiliated and Affiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 17.0 $ 6.3 $ (11.1 ) $ 12.3 Spent Nuclear Fuel and Decommissioning Trusts Cash and Cash Equivalents (e) 160.5 — — 7.8 168.3 Fixed Income Securities: United States Government — 731.1 — — 731.1 Corporate Debt — 57.9 — — 57.9 State and Local Government — 22.2 — — 22.2 Subtotal Fixed Income Securities — 811.2 — — 811.2 Equity Securities - Domestic (b) 1,126.9 — — — 1,126.9 Total Spent Nuclear Fuel and Decommissioning Trusts 1,287.4 811.2 — 7.8 2,106.4 Total Assets $ 1,287.5 $ 828.2 $ 6.3 $ (3.3 ) $ 2,118.7 Liabilities: Risk Management Liabilities - Nonaffiliated Risk Management Commodity Contracts (c) (g) $ 0.1 $ 17.5 $ 2.0 $ (11.7 ) $ 7.9 (a) Amounts in “Other’’ column primarily represent cash deposits in bank accounts with financial institutions or with third parties. Level 1 and Level 2 amounts primarily represent investments in money market funds. (b) Amounts represent publicly traded equity securities and equity-based mutual funds. (c) Amounts in “Other’’ column primarily represent counterparty netting of risk management and hedging contracts and associated cash collateral under the accounting guidance for “Derivatives and Hedging.’’ (d) The March 31, 2016 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(5) million in 2016 and $(5) million in periods 2017-2019; Level 2 matures $3 million in 2016, $9 million in periods 2017-2019, $3 million in periods 2020-2021 and $1 million in periods 2022-2032; Level 3 matures $17 million in 2016, $37 million in periods 2017-2019, $21 million in periods 2020-2021 and $69 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. (e) Amounts in “Other’’ column primarily represent accrued interest receivables from financial institutions. Level 1 amounts primarily represent investments in money market funds. (f) The December 31, 2015 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(9) million in 2016 and $(4) million in periods 2017-2019; Level 2 matures $2 million in 2016, $18 million in periods 2017-2019 and $4 million in periods 2020-2021; Level 3 matures $28 million in 2016, $29 million in periods 2017-2019, $19 million in periods 2020-2021 and $76 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. (g) Substantially comprised of power contracts for APCo, I&M and OPCo and coal contracts for PSO and SWEPCo. |
Changes in Fair Value of Net Trading Derivatives and Other Investments | Three Months Ended March 31, 2016 AEP APCo (a) I&M (a) OPCo PSO SWEPCo (in millions) Balance as of December 31, 2015 $ 146.9 $ 11.7 $ 4.3 $ 15.9 $ 0.6 $ 0.8 Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (b) (c) 23.5 15.3 2.5 (0.6 ) (0.8 ) 4.6 Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (b) 21.9 — — — — — Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income 1.3 — — — — — Purchases, Issuances and Settlements (d) (42.7 ) (27.7 ) (4.6 ) 1.4 0.5 (4.9 ) Transfers out of Level 3 (f) (g) 10.9 0.1 0.1 — — — Changes in Fair Value Allocated to Regulated Jurisdictions (h) (20.5 ) 3.2 1.4 (27.6 ) 0.3 0.2 Balance as of March 31, 2016 $ 141.3 $ 2.6 $ 3.7 $ (10.9 ) $ 0.6 $ 0.7 Three Months Ended March 31, 2015 AEP APCo I&M OPCo PSO SWEPCo (in millions) Balance as of December 31, 2014 $ 150.8 $ 15.8 $ 14.7 $ 48.4 $ (0.3 ) $ (0.5 ) Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (b) (c) 8.6 2.2 0.1 0.2 (0.3 ) 5.8 Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (b) 5.2 — — — — — Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income (1.9 ) — — — — — Purchases, Issuances and Settlements (d) (38.5 ) (13.4 ) (9.0 ) (6.8 ) 0.6 (5.3 ) Transfers into Level 3 (e) (f) 15.3 — — — — — Transfers out of Level 3 (f) (g) (12.4 ) — — — — — Changes in Fair Value Allocated to Regulated Jurisdictions (h) 3.5 1.4 (0.2 ) 4.1 (0.7 ) (1.2 ) Balance as of March 31, 2015 $ 130.6 $ 6.0 $ 5.6 $ 45.9 $ (0.7 ) $ (1.2 ) (a) Includes both affiliated and nonaffiliated transactions. (b) Included in revenues on the condensed statements of income. (c) Represents the change in fair value between the beginning of the reporting period and the settlement of the risk management commodity contract. (d) Represents the settlement of risk management commodity contracts for the reporting period. (e) Represents existing assets or liabilities that were previously categorized as Level 2. (f) Transfers are recognized based on their value at the beginning of the reporting period that the transfer occurred. (g) Represents existing assets or liabilities that were previously categorized as Level 3. (h) Relates to the net gains (losses) of those contracts that are not reflected on the condensed statements of income. These net gains (losses) are recorded as regulatory liabilities/assets. |
Significant Unobservable Inputs for Level 3 | Significant Unobservable Inputs March 31, 2016 I&M Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 5.5 $ 0.1 Discounted Cash Flow Forward Market Price $ 8.77 $ 47.05 $ 29.14 FTRs — 1.7 Discounted Cash Flow Forward Market Price (0.07 ) 5.58 0.42 Total $ 5.5 $ 1.8 Significant Unobservable Inputs December 31, 2015 I&M Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 6.0 $ 0.2 Discounted Cash Flow Forward Market Price $ 12.61 $ 47.24 $ 32.38 FTRs 0.3 1.8 Discounted Cash Flow Forward Market Price (6.96 ) 8.43 1.34 Total $ 6.3 $ 2.0 (a) Represents market prices in dollars per MWh. (b) Represents average price of credit default swaps used to calculate counterparty credit risk, reported in basis points. |
Sensitivity of Fair Value Measurements | Sensitivity of Fair Value Measurements Significant Unobservable Input Position Change in Input Impact on Fair Value Measurement Forward Market Price Buy Increase (Decrease) Higher (Lower) Forward Market Price Sell Increase (Decrease) Lower (Higher) Counterparty Credit Risk Loss Increase (Decrease) Higher (Lower) Counterparty Credit Risk Gain Increase (Decrease) Lower (Higher) |
Ohio Power Co [Member] | |
Book Values and Fair Values of Long-term Debt | March 31, 2016 December 31, 2015 Company Book Value Fair Value Book Value Fair Value (in millions) AEP $ 19,782.6 $ 22,052.8 $ 19,572.7 $ 21,201.3 APCo 3,919.3 4,597.8 3,930.7 4,416.7 I&M 2,366.6 2,595.4 2,000.0 2,193.6 OPCo 2,135.5 2,515.4 2,157.7 2,472.7 PSO 1,286.3 1,463.6 1,286.1 1,402.9 SWEPCo 2,272.4 2,483.4 2,273.5 2,417.2 |
Fair Value, Assets and Liabilities Measured on Recurring Basis | (a) Amounts in “Other’’ column primarily represent cash deposits in bank accounts with financial institutions or with third parties. Level 1 and Level 2 amounts primarily represent investments in money market funds. (b) Amounts represent publicly traded equity securities and equity-based mutual funds. (c) Amounts in “Other’’ column primarily represent counterparty netting of risk management and hedging contracts and associated cash collateral under the accounting guidance for “Derivatives and Hedging.’’ (d) The March 31, 2016 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(5) million in 2016 and $(5) million in periods 2017-2019; Level 2 matures $3 million in 2016, $9 million in periods 2017-2019, $3 million in periods 2020-2021 and $1 million in periods 2022-2032; Level 3 matures $17 million in 2016, $37 million in periods 2017-2019, $21 million in periods 2020-2021 and $69 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. (e) Amounts in “Other’’ column primarily represent accrued interest receivables from financial institutions. Level 1 amounts primarily represent investments in money market funds. (f) The December 31, 2015 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(9) million in 2016 and $(4) million in periods 2017-2019; Level 2 matures $2 million in 2016, $18 million in periods 2017-2019 and $4 million in periods 2020-2021; Level 3 matures $28 million in 2016, $29 million in periods 2017-2019, $19 million in periods 2020-2021 and $76 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. (g) Substantially comprised of power contracts for APCo, I&M and OPCo and coal contracts for PSO and SWEPCo. OPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ 16.2 $ — $ — $ — $ 16.2 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.6 $ 10.9 $ (0.2 ) $ 11.3 OPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Restricted Cash for Securitized Funding (a) $ — $ — $ — $ 27.7 $ 27.7 Risk Management Assets Risk Management Commodity Contracts (c) (g) — — 16.0 3.2 19.2 Total Assets $ — $ — $ 16.0 $ 30.9 $ 46.9 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.8 $ 0.1 $ 2.7 $ 3.6 |
Changes in Fair Value of Net Trading Derivatives and Other Investments | Three Months Ended March 31, 2016 AEP APCo (a) I&M (a) OPCo PSO SWEPCo (in millions) Balance as of December 31, 2015 $ 146.9 $ 11.7 $ 4.3 $ 15.9 $ 0.6 $ 0.8 Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (b) (c) 23.5 15.3 2.5 (0.6 ) (0.8 ) 4.6 Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (b) 21.9 — — — — — Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income 1.3 — — — — — Purchases, Issuances and Settlements (d) (42.7 ) (27.7 ) (4.6 ) 1.4 0.5 (4.9 ) Transfers out of Level 3 (f) (g) 10.9 0.1 0.1 — — — Changes in Fair Value Allocated to Regulated Jurisdictions (h) (20.5 ) 3.2 1.4 (27.6 ) 0.3 0.2 Balance as of March 31, 2016 $ 141.3 $ 2.6 $ 3.7 $ (10.9 ) $ 0.6 $ 0.7 Three Months Ended March 31, 2015 AEP APCo I&M OPCo PSO SWEPCo (in millions) Balance as of December 31, 2014 $ 150.8 $ 15.8 $ 14.7 $ 48.4 $ (0.3 ) $ (0.5 ) Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (b) (c) 8.6 2.2 0.1 0.2 (0.3 ) 5.8 Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (b) 5.2 — — — — — Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income (1.9 ) — — — — — Purchases, Issuances and Settlements (d) (38.5 ) (13.4 ) (9.0 ) (6.8 ) 0.6 (5.3 ) Transfers into Level 3 (e) (f) 15.3 — — — — — Transfers out of Level 3 (f) (g) (12.4 ) — — — — — Changes in Fair Value Allocated to Regulated Jurisdictions (h) 3.5 1.4 (0.2 ) 4.1 (0.7 ) (1.2 ) Balance as of March 31, 2015 $ 130.6 $ 6.0 $ 5.6 $ 45.9 $ (0.7 ) $ (1.2 ) (a) Includes both affiliated and nonaffiliated transactions. (b) Included in revenues on the condensed statements of income. (c) Represents the change in fair value between the beginning of the reporting period and the settlement of the risk management commodity contract. (d) Represents the settlement of risk management commodity contracts for the reporting period. (e) Represents existing assets or liabilities that were previously categorized as Level 2. (f) Transfers are recognized based on their value at the beginning of the reporting period that the transfer occurred. (g) Represents existing assets or liabilities that were previously categorized as Level 3. (h) Relates to the net gains (losses) of those contracts that are not reflected on the condensed statements of income. These net gains (losses) are recorded as regulatory liabilities/assets. |
Significant Unobservable Inputs for Level 3 | (a) Represents market prices in dollars per MWh. (b) Represents average price of credit default swaps used to calculate counterparty credit risk, reported in basis points. Significant Unobservable Inputs March 31, 2016 OPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input Low High Average (in millions) Energy Contracts $ — $ 10.9 Discounted Cash Flow Forward Market Price (a) $ 36.41 $ 162.36 $ 84.24 Counterparty Credit Risk (b) 251 Total $ — $ 10.9 Significant Unobservable Inputs December 31, 2015 OPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) Energy Contracts $ 16.0 $ 0.1 Discounted Cash Flow Forward Market Price $ 41.61 $ 165.36 $ 86.84 |
Sensitivity of Fair Value Measurements | Sensitivity of Fair Value Measurements Significant Unobservable Input Position Change in Input Impact on Fair Value Measurement Forward Market Price Buy Increase (Decrease) Higher (Lower) Forward Market Price Sell Increase (Decrease) Lower (Higher) Counterparty Credit Risk Loss Increase (Decrease) Higher (Lower) Counterparty Credit Risk Gain Increase (Decrease) Lower (Higher) |
Public Service Co Of Oklahoma [Member] | |
Book Values and Fair Values of Long-term Debt | March 31, 2016 December 31, 2015 Company Book Value Fair Value Book Value Fair Value (in millions) AEP $ 19,782.6 $ 22,052.8 $ 19,572.7 $ 21,201.3 APCo 3,919.3 4,597.8 3,930.7 4,416.7 I&M 2,366.6 2,595.4 2,000.0 2,193.6 OPCo 2,135.5 2,515.4 2,157.7 2,472.7 PSO 1,286.3 1,463.6 1,286.1 1,402.9 SWEPCo 2,272.4 2,483.4 2,273.5 2,417.2 |
Fair Value, Assets and Liabilities Measured on Recurring Basis | PSO Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets Risk Management Commodity Contracts (c) (g) $ — $ 0.1 $ 0.7 $ (0.1 ) $ 0.7 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.3 $ 0.1 $ (0.2 ) $ 0.2 PSO Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Risk Management Assets Risk Management Commodity Contracts (c) (g) $ — $ — $ 0.7 $ (0.1 ) $ 0.6 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 0.5 $ 0.1 $ (0.4 ) $ 0.2 (a) Amounts in “Other’’ column primarily represent cash deposits in bank accounts with financial institutions or with third parties. Level 1 and Level 2 amounts primarily represent investments in money market funds. (b) Amounts represent publicly traded equity securities and equity-based mutual funds. (c) Amounts in “Other’’ column primarily represent counterparty netting of risk management and hedging contracts and associated cash collateral under the accounting guidance for “Derivatives and Hedging.’’ (d) The March 31, 2016 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(5) million in 2016 and $(5) million in periods 2017-2019; Level 2 matures $3 million in 2016, $9 million in periods 2017-2019, $3 million in periods 2020-2021 and $1 million in periods 2022-2032; Level 3 matures $17 million in 2016, $37 million in periods 2017-2019, $21 million in periods 2020-2021 and $69 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. (e) Amounts in “Other’’ column primarily represent accrued interest receivables from financial institutions. Level 1 amounts primarily represent investments in money market funds. (f) The December 31, 2015 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(9) million in 2016 and $(4) million in periods 2017-2019; Level 2 matures $2 million in 2016, $18 million in periods 2017-2019 and $4 million in periods 2020-2021; Level 3 matures $28 million in 2016, $29 million in periods 2017-2019, $19 million in periods 2020-2021 and $76 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. (g) Substantially comprised of power contracts for APCo, I&M and OPCo and coal contracts for PSO and SWEPCo. |
Changes in Fair Value of Net Trading Derivatives and Other Investments | Three Months Ended March 31, 2016 AEP APCo (a) I&M (a) OPCo PSO SWEPCo (in millions) Balance as of December 31, 2015 $ 146.9 $ 11.7 $ 4.3 $ 15.9 $ 0.6 $ 0.8 Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (b) (c) 23.5 15.3 2.5 (0.6 ) (0.8 ) 4.6 Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (b) 21.9 — — — — — Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income 1.3 — — — — — Purchases, Issuances and Settlements (d) (42.7 ) (27.7 ) (4.6 ) 1.4 0.5 (4.9 ) Transfers out of Level 3 (f) (g) 10.9 0.1 0.1 — — — Changes in Fair Value Allocated to Regulated Jurisdictions (h) (20.5 ) 3.2 1.4 (27.6 ) 0.3 0.2 Balance as of March 31, 2016 $ 141.3 $ 2.6 $ 3.7 $ (10.9 ) $ 0.6 $ 0.7 Three Months Ended March 31, 2015 AEP APCo I&M OPCo PSO SWEPCo (in millions) Balance as of December 31, 2014 $ 150.8 $ 15.8 $ 14.7 $ 48.4 $ (0.3 ) $ (0.5 ) Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (b) (c) 8.6 2.2 0.1 0.2 (0.3 ) 5.8 Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (b) 5.2 — — — — — Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income (1.9 ) — — — — — Purchases, Issuances and Settlements (d) (38.5 ) (13.4 ) (9.0 ) (6.8 ) 0.6 (5.3 ) Transfers into Level 3 (e) (f) 15.3 — — — — — Transfers out of Level 3 (f) (g) (12.4 ) — — — — — Changes in Fair Value Allocated to Regulated Jurisdictions (h) 3.5 1.4 (0.2 ) 4.1 (0.7 ) (1.2 ) Balance as of March 31, 2015 $ 130.6 $ 6.0 $ 5.6 $ 45.9 $ (0.7 ) $ (1.2 ) (a) Includes both affiliated and nonaffiliated transactions. (b) Included in revenues on the condensed statements of income. (c) Represents the change in fair value between the beginning of the reporting period and the settlement of the risk management commodity contract. (d) Represents the settlement of risk management commodity contracts for the reporting period. (e) Represents existing assets or liabilities that were previously categorized as Level 2. (f) Transfers are recognized based on their value at the beginning of the reporting period that the transfer occurred. (g) Represents existing assets or liabilities that were previously categorized as Level 3. (h) Relates to the net gains (losses) of those contracts that are not reflected on the condensed statements of income. These net gains (losses) are recorded as regulatory liabilities/assets. |
Significant Unobservable Inputs for Level 3 | (a) Represents market prices in dollars per MWh. (b) Represents average price of credit default swaps used to calculate counterparty credit risk, reported in basis points. Significant Unobservable Inputs March 31, 2016 PSO Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.7 $ 0.1 Discounted Cash Flow Forward Market Price $ (17.72 ) $ 1.80 $ (0.59 ) Significant Unobservable Inputs December 31, 2015 PSO Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.7 $ 0.1 Discounted Cash Flow Forward Market Price $ (6.96 ) $ 8.43 $ 1.34 |
Sensitivity of Fair Value Measurements | Sensitivity of Fair Value Measurements Significant Unobservable Input Position Change in Input Impact on Fair Value Measurement Forward Market Price Buy Increase (Decrease) Higher (Lower) Forward Market Price Sell Increase (Decrease) Lower (Higher) Counterparty Credit Risk Loss Increase (Decrease) Higher (Lower) Counterparty Credit Risk Gain Increase (Decrease) Lower (Higher) |
Southwestern Electric Power Co [Member] | |
Book Values and Fair Values of Long-term Debt | March 31, 2016 December 31, 2015 Company Book Value Fair Value Book Value Fair Value (in millions) AEP $ 19,782.6 $ 22,052.8 $ 19,572.7 $ 21,201.3 APCo 3,919.3 4,597.8 3,930.7 4,416.7 I&M 2,366.6 2,595.4 2,000.0 2,193.6 OPCo 2,135.5 2,515.4 2,157.7 2,472.7 PSO 1,286.3 1,463.6 1,286.1 1,402.9 SWEPCo 2,272.4 2,483.4 2,273.5 2,417.2 |
Fair Value, Assets and Liabilities Measured on Recurring Basis | SWEPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis March 31, 2016 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 9.4 $ — $ — $ 2.9 $ 12.3 Risk Management Assets Risk Management Commodity Contracts (c) (g) — 0.1 0.8 (0.1 ) 0.8 Total Assets $ 9.4 $ 0.1 $ 0.8 $ 2.8 $ 13.1 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 5.5 $ 0.1 $ (0.3 ) $ 5.3 SWEPCo Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2015 Level 1 Level 2 Level 3 Other Total Assets: (in millions) Cash and Cash Equivalents (a) $ 3.6 $ — $ — $ 1.6 $ 5.2 Risk Management Assets Risk Management Commodity Contracts (c) (g) — — 0.9 (0.1 ) 0.8 Total Assets $ 3.6 $ — $ 0.9 $ 1.5 $ 6.0 Liabilities: Risk Management Liabilities Risk Management Commodity Contracts (c) (g) $ — $ 5.5 $ 0.1 $ (0.4 ) $ 5.2 (a) Amounts in “Other’’ column primarily represent cash deposits in bank accounts with financial institutions or with third parties. Level 1 and Level 2 amounts primarily represent investments in money market funds. (b) Amounts represent publicly traded equity securities and equity-based mutual funds. (c) Amounts in “Other’’ column primarily represent counterparty netting of risk management and hedging contracts and associated cash collateral under the accounting guidance for “Derivatives and Hedging.’’ (d) The March 31, 2016 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(5) million in 2016 and $(5) million in periods 2017-2019; Level 2 matures $3 million in 2016, $9 million in periods 2017-2019, $3 million in periods 2020-2021 and $1 million in periods 2022-2032; Level 3 matures $17 million in 2016, $37 million in periods 2017-2019, $21 million in periods 2020-2021 and $69 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. (e) Amounts in “Other’’ column primarily represent accrued interest receivables from financial institutions. Level 1 amounts primarily represent investments in money market funds. (f) The December 31, 2015 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(9) million in 2016 and $(4) million in periods 2017-2019; Level 2 matures $2 million in 2016, $18 million in periods 2017-2019 and $4 million in periods 2020-2021; Level 3 matures $28 million in 2016, $29 million in periods 2017-2019, $19 million in periods 2020-2021 and $76 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. (g) Substantially comprised of power contracts for APCo, I&M and OPCo and coal contracts for PSO and SWEPCo. |
Changes in Fair Value of Net Trading Derivatives and Other Investments | Three Months Ended March 31, 2016 AEP APCo (a) I&M (a) OPCo PSO SWEPCo (in millions) Balance as of December 31, 2015 $ 146.9 $ 11.7 $ 4.3 $ 15.9 $ 0.6 $ 0.8 Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (b) (c) 23.5 15.3 2.5 (0.6 ) (0.8 ) 4.6 Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (b) 21.9 — — — — — Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income 1.3 — — — — — Purchases, Issuances and Settlements (d) (42.7 ) (27.7 ) (4.6 ) 1.4 0.5 (4.9 ) Transfers out of Level 3 (f) (g) 10.9 0.1 0.1 — — — Changes in Fair Value Allocated to Regulated Jurisdictions (h) (20.5 ) 3.2 1.4 (27.6 ) 0.3 0.2 Balance as of March 31, 2016 $ 141.3 $ 2.6 $ 3.7 $ (10.9 ) $ 0.6 $ 0.7 Three Months Ended March 31, 2015 AEP APCo I&M OPCo PSO SWEPCo (in millions) Balance as of December 31, 2014 $ 150.8 $ 15.8 $ 14.7 $ 48.4 $ (0.3 ) $ (0.5 ) Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) (b) (c) 8.6 2.2 0.1 0.2 (0.3 ) 5.8 Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date (b) 5.2 — — — — — Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income (1.9 ) — — — — — Purchases, Issuances and Settlements (d) (38.5 ) (13.4 ) (9.0 ) (6.8 ) 0.6 (5.3 ) Transfers into Level 3 (e) (f) 15.3 — — — — — Transfers out of Level 3 (f) (g) (12.4 ) — — — — — Changes in Fair Value Allocated to Regulated Jurisdictions (h) 3.5 1.4 (0.2 ) 4.1 (0.7 ) (1.2 ) Balance as of March 31, 2015 $ 130.6 $ 6.0 $ 5.6 $ 45.9 $ (0.7 ) $ (1.2 ) (a) Includes both affiliated and nonaffiliated transactions. (b) Included in revenues on the condensed statements of income. (c) Represents the change in fair value between the beginning of the reporting period and the settlement of the risk management commodity contract. (d) Represents the settlement of risk management commodity contracts for the reporting period. (e) Represents existing assets or liabilities that were previously categorized as Level 2. (f) Transfers are recognized based on their value at the beginning of the reporting period that the transfer occurred. (g) Represents existing assets or liabilities that were previously categorized as Level 3. (h) Relates to the net gains (losses) of those contracts that are not reflected on the condensed statements of income. These net gains (losses) are recorded as regulatory liabilities/assets. |
Significant Unobservable Inputs for Level 3 | Significant Unobservable Inputs March 31, 2016 SWEPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.8 $ 0.1 Discounted Cash Flow Forward Market Price $ (17.72 ) $ 1.80 $ (0.59 ) Significant Unobservable Inputs December 31, 2015 SWEPCo Significant Forward Price Range Fair Value Valuation Unobservable Weighted Assets Liabilities Technique Input (a) Low High Average (in millions) FTRs $ 0.9 $ 0.1 Discounted Cash Flow Forward Market Price $ (6.96 ) $ 8.43 $ 1.34 (a) Represents market prices in dollars per MWh. (b) Represents average price of credit default swaps used to calculate counterparty credit risk, reported in basis points. |
Sensitivity of Fair Value Measurements | Sensitivity of Fair Value Measurements Significant Unobservable Input Position Change in Input Impact on Fair Value Measurement Forward Market Price Buy Increase (Decrease) Higher (Lower) Forward Market Price Sell Increase (Decrease) Lower (Higher) Counterparty Credit Risk Loss Increase (Decrease) Higher (Lower) Counterparty Credit Risk Gain Increase (Decrease) Lower (Higher) |
Financing Activities (Tables)
Financing Activities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Long-term Debt | Type of Debt March 31, 2016 December 31, 2015 (in millions) Senior Unsecured Notes $ 14,026.2 $ 13,629.1 Pollution Control Bonds 1,784.1 1,784.8 Notes Payable 233.6 264.7 Securitization Bonds 1,863.1 2,024.0 Spent Nuclear Fuel Obligation (a) 265.7 265.6 Other Long-term Debt 1,609.9 1,604.5 Total Long-term Debt Outstanding 19,782.6 19,572.7 Long-term Debt Due Within One Year 2,033.3 1,831.8 Long-term Debt $ 17,749.3 $ 17,740.9 (a) Pursuant to the Nuclear Waste Policy Act of 1982, I&M, a nuclear licensee, has an obligation to the United States Department of Energy for spent nuclear fuel disposal. The obligation includes a one-time fee for nuclear fuel consumed prior to April 7, 1983. Trust fund assets related to this obligation were $309 million and $309 million as of March 31, 2016 and December 31, 2015 , respectively, and are included in Spent Nuclear Fuel and Decommissioning Trusts on the condensed balance sheets. |
Long-term Debt Issuances | Company Type of Debt Principal Amount (a) Interest Rate Due Date Issuances: (in millions) (%) APCo Pollution Control Bonds $ 125.3 Variable 2016 I&M Senior Unsecured Notes 400.0 4.55 2046 Non-Registrant: Transource Missouri Other Long-term Debt 5.5 Variable 2018 Total Issuances $ 530.8 (a) Amounts indicated on the statements of cash flows are net of issuance costs and premium or discount and will not tie to the issuance amounts. |
Retirements and Principal Payments | Company Type of Debt Principal Amount Paid Interest Rate Due Date Retirements and Principal Payments: (in millions) (%) APCo Pollution Control Bonds $ 125.3 Variable 2016 APCo Securitization Bonds 11.2 2.008 2024 I&M Notes Payable 0.4 Variable 2016 I&M Notes Payable 0.3 2.12 2016 I&M Notes Payable 6.9 Variable 2017 I&M Notes Payable 10.2 Variable 2019 I&M Notes Payable 10.7 Variable 2019 I&M Other Long-term Debt 0.3 6.00 2025 OPCo Securitization Bonds 22.8 0.958 2018 PSO Other Long-term Debt 0.1 3.00 2027 SWEPCo Notes Payable 1.6 4.58 2032 Non-Registrant: AEGCo Senior Unsecured Notes 3.7 6.33 2037 AEP Subsidiaries Notes Payable 1.0 Variable 2017 TCC Securitization Bonds 44.2 6.25 2016 TCC Securitization Bonds 83.7 5.17 2018 Total Retirements and Principal Payments $ 322.4 |
Short Term Debt | March 31, 2016 December 31, 2015 Type of Debt Outstanding Amount Interest Rate (a) Outstanding Interest (in millions) (in millions) Securitized Debt for Receivables (b) $ 719.0 0.58 % $ 675.0 0.30 % Commercial Paper 502.0 0.77 % 125.0 0.81 % Total Short-term Debt $ 1,221.0 $ 800.0 (a) Weighted average rate. (b) Amount of securitized debt for receivables as accounted for under the “Transfers and Servicing” accounting guidance. |
Comparative Accounts Receivable Information | Three Months Ended March 31, 2016 2015 (dollars in millions) Effective Interest Rates on Securitization of Accounts Receivable 0.58 % 0.26 % Net Uncollectible Accounts Receivable Written Off $ 5.7 $ 6.6 |
Customer Accounts Receivable Managed Portfolio | March 31, 2016 December 31, 2015 (in millions) Accounts Receivable Retained Interest and Pledged as Collateral Less Uncollectible Accounts $ 849.8 $ 924.8 Total Principal Outstanding 719.0 675.0 Delinquent Securitized Accounts Receivable 52.1 48.3 Bad Debt Reserves Related to Securitization of Accounts Receivable 20.9 17.5 Unbilled Receivables Related to Securitization of Accounts Receivable 264.0 357.8 |
Appalachian Power Co [Member] | |
Long-term Debt Issuances | Company Type of Debt Principal Amount (a) Interest Rate Due Date Issuances: (in millions) (%) APCo Pollution Control Bonds $ 125.3 Variable 2016 I&M Senior Unsecured Notes 400.0 4.55 2046 Non-Registrant: Transource Missouri Other Long-term Debt 5.5 Variable 2018 Total Issuances $ 530.8 (a) Amounts indicated on the statements of cash flows are net of issuance costs and premium or discount and will not tie to the issuance amounts. |
Retirements and Principal Payments | Company Type of Debt Principal Amount Paid Interest Rate Due Date Retirements and Principal Payments: (in millions) (%) APCo Pollution Control Bonds $ 125.3 Variable 2016 APCo Securitization Bonds 11.2 2.008 2024 I&M Notes Payable 0.4 Variable 2016 I&M Notes Payable 0.3 2.12 2016 I&M Notes Payable 6.9 Variable 2017 I&M Notes Payable 10.2 Variable 2019 I&M Notes Payable 10.7 Variable 2019 I&M Other Long-term Debt 0.3 6.00 2025 OPCo Securitization Bonds 22.8 0.958 2018 PSO Other Long-term Debt 0.1 3.00 2027 SWEPCo Notes Payable 1.6 4.58 2032 Non-Registrant: AEGCo Senior Unsecured Notes 3.7 6.33 2037 AEP Subsidiaries Notes Payable 1.0 Variable 2017 TCC Securitization Bonds 44.2 6.25 2016 TCC Securitization Bonds 83.7 5.17 2018 Total Retirements and Principal Payments $ 322.4 |
Utility Money Pool Participants' Money Pool Activity and Authorized Borrowing Limits | Company Maximum Borrowings from the Utility Money Pool Maximum Loans to the Utility Money Pool Average Borrowings from the Utility Money Pool Average Loans to the Utility Money Pool Net Loans to (Borrowings from) the Utility Money Pool as of March 31, 2016 Authorized Short-term Borrowing Limit (in millions) APCo $ 286.9 $ 25.7 $ 183.2 $ 25.5 $ (146.4 ) $ 600.0 I&M 369.1 62.5 267.3 17.0 2.8 500.0 OPCo — 379.2 — 304.7 221.9 400.0 PSO — 91.0 — 48.7 8.4 300.0 SWEPCo 221.8 — 148.0 — (217.8 ) 350.0 |
Maximum and Minimum Interest Rates for Funds Either Borrowed from or Loaned to Utility Money Pool | Three Months Ended March 31, 2016 2015 Maximum Interest Rate 0.83 % 0.59 % Minimum Interest Rate 0.69 % 0.39 % |
Average Interest Rates for Funds Borrowed from and Loaned to Utility Money Pool | Average Interest Rate for Funds Borrowed from the Utility Money Pool for Average Interest Rate for Funds Loaned to the Utility Money Pool for Three Months Ended March 31, Three Months Ended March 31, Company 2016 2015 2016 2015 APCo 0.73 % — % 0.73 % 0.45 % I&M 0.72 % 0.46 % 0.74 % 0.46 % OPCo — % — % 0.73 % 0.46 % PSO — % 0.49 % 0.72 % 0.44 % SWEPCo 0.73 % 0.46 % — % 0.52 % |
Accounts Receivable and Accrued Unbilled Revenues | Company March 31, 2016 December 31, 2015 (in millions) APCo $ 136.6 $ 135.4 I&M 125.3 134.8 OPCo 339.0 351.4 PSO 94.5 116.1 SWEPCo 121.2 151.8 |
Fees Paid to AEP Credit for Customer Accounts Receivable Sold | Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 1.8 $ 2.5 I&M 1.9 2.4 OPCo 7.9 8.0 PSO 1.4 1.4 SWEPCo 1.5 1.7 |
Proceeds on Sale of Receivables to AEP Credit | Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 384.4 $ 429.6 I&M 388.1 419.6 OPCo 646.6 715.0 PSO 272.1 302.5 SWEPCo 336.1 373.2 |
Indiana Michigan Power Co [Member] | |
Long-term Debt Issuances | Company Type of Debt Principal Amount (a) Interest Rate Due Date Issuances: (in millions) (%) APCo Pollution Control Bonds $ 125.3 Variable 2016 I&M Senior Unsecured Notes 400.0 4.55 2046 Non-Registrant: Transource Missouri Other Long-term Debt 5.5 Variable 2018 Total Issuances $ 530.8 (a) Amounts indicated on the statements of cash flows are net of issuance costs and premium or discount and will not tie to the issuance amounts. |
Retirements and Principal Payments | Company Type of Debt Principal Amount Paid Interest Rate Due Date Retirements and Principal Payments: (in millions) (%) APCo Pollution Control Bonds $ 125.3 Variable 2016 APCo Securitization Bonds 11.2 2.008 2024 I&M Notes Payable 0.4 Variable 2016 I&M Notes Payable 0.3 2.12 2016 I&M Notes Payable 6.9 Variable 2017 I&M Notes Payable 10.2 Variable 2019 I&M Notes Payable 10.7 Variable 2019 I&M Other Long-term Debt 0.3 6.00 2025 OPCo Securitization Bonds 22.8 0.958 2018 PSO Other Long-term Debt 0.1 3.00 2027 SWEPCo Notes Payable 1.6 4.58 2032 Non-Registrant: AEGCo Senior Unsecured Notes 3.7 6.33 2037 AEP Subsidiaries Notes Payable 1.0 Variable 2017 TCC Securitization Bonds 44.2 6.25 2016 TCC Securitization Bonds 83.7 5.17 2018 Total Retirements and Principal Payments $ 322.4 |
Utility Money Pool Participants' Money Pool Activity and Authorized Borrowing Limits | Company Maximum Borrowings from the Utility Money Pool Maximum Loans to the Utility Money Pool Average Borrowings from the Utility Money Pool Average Loans to the Utility Money Pool Net Loans to (Borrowings from) the Utility Money Pool as of March 31, 2016 Authorized Short-term Borrowing Limit (in millions) APCo $ 286.9 $ 25.7 $ 183.2 $ 25.5 $ (146.4 ) $ 600.0 I&M 369.1 62.5 267.3 17.0 2.8 500.0 OPCo — 379.2 — 304.7 221.9 400.0 PSO — 91.0 — 48.7 8.4 300.0 SWEPCo 221.8 — 148.0 — (217.8 ) 350.0 |
Maximum and Minimum Interest Rates for Funds Either Borrowed from or Loaned to Utility Money Pool | Three Months Ended March 31, 2016 2015 Maximum Interest Rate 0.83 % 0.59 % Minimum Interest Rate 0.69 % 0.39 % |
Average Interest Rates for Funds Borrowed from and Loaned to Utility Money Pool | Average Interest Rate for Funds Borrowed from the Utility Money Pool for Average Interest Rate for Funds Loaned to the Utility Money Pool for Three Months Ended March 31, Three Months Ended March 31, Company 2016 2015 2016 2015 APCo 0.73 % — % 0.73 % 0.45 % I&M 0.72 % 0.46 % 0.74 % 0.46 % OPCo — % — % 0.73 % 0.46 % PSO — % 0.49 % 0.72 % 0.44 % SWEPCo 0.73 % 0.46 % — % 0.52 % |
Accounts Receivable and Accrued Unbilled Revenues | Company March 31, 2016 December 31, 2015 (in millions) APCo $ 136.6 $ 135.4 I&M 125.3 134.8 OPCo 339.0 351.4 PSO 94.5 116.1 SWEPCo 121.2 151.8 |
Fees Paid to AEP Credit for Customer Accounts Receivable Sold | Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 1.8 $ 2.5 I&M 1.9 2.4 OPCo 7.9 8.0 PSO 1.4 1.4 SWEPCo 1.5 1.7 |
Proceeds on Sale of Receivables to AEP Credit | Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 384.4 $ 429.6 I&M 388.1 419.6 OPCo 646.6 715.0 PSO 272.1 302.5 SWEPCo 336.1 373.2 |
Ohio Power Co [Member] | |
Retirements and Principal Payments | Company Type of Debt Principal Amount Paid Interest Rate Due Date Retirements and Principal Payments: (in millions) (%) APCo Pollution Control Bonds $ 125.3 Variable 2016 APCo Securitization Bonds 11.2 2.008 2024 I&M Notes Payable 0.4 Variable 2016 I&M Notes Payable 0.3 2.12 2016 I&M Notes Payable 6.9 Variable 2017 I&M Notes Payable 10.2 Variable 2019 I&M Notes Payable 10.7 Variable 2019 I&M Other Long-term Debt 0.3 6.00 2025 OPCo Securitization Bonds 22.8 0.958 2018 PSO Other Long-term Debt 0.1 3.00 2027 SWEPCo Notes Payable 1.6 4.58 2032 Non-Registrant: AEGCo Senior Unsecured Notes 3.7 6.33 2037 AEP Subsidiaries Notes Payable 1.0 Variable 2017 TCC Securitization Bonds 44.2 6.25 2016 TCC Securitization Bonds 83.7 5.17 2018 Total Retirements and Principal Payments $ 322.4 |
Utility Money Pool Participants' Money Pool Activity and Authorized Borrowing Limits | Company Maximum Borrowings from the Utility Money Pool Maximum Loans to the Utility Money Pool Average Borrowings from the Utility Money Pool Average Loans to the Utility Money Pool Net Loans to (Borrowings from) the Utility Money Pool as of March 31, 2016 Authorized Short-term Borrowing Limit (in millions) APCo $ 286.9 $ 25.7 $ 183.2 $ 25.5 $ (146.4 ) $ 600.0 I&M 369.1 62.5 267.3 17.0 2.8 500.0 OPCo — 379.2 — 304.7 221.9 400.0 PSO — 91.0 — 48.7 8.4 300.0 SWEPCo 221.8 — 148.0 — (217.8 ) 350.0 |
Maximum and Minimum Interest Rates for Funds Either Borrowed from or Loaned to Utility Money Pool | Three Months Ended March 31, 2016 2015 Maximum Interest Rate 0.83 % 0.59 % Minimum Interest Rate 0.69 % 0.39 % |
Average Interest Rates for Funds Borrowed from and Loaned to Utility Money Pool | Average Interest Rate for Funds Borrowed from the Utility Money Pool for Average Interest Rate for Funds Loaned to the Utility Money Pool for Three Months Ended March 31, Three Months Ended March 31, Company 2016 2015 2016 2015 APCo 0.73 % — % 0.73 % 0.45 % I&M 0.72 % 0.46 % 0.74 % 0.46 % OPCo — % — % 0.73 % 0.46 % PSO — % 0.49 % 0.72 % 0.44 % SWEPCo 0.73 % 0.46 % — % 0.52 % |
Accounts Receivable and Accrued Unbilled Revenues | Company March 31, 2016 December 31, 2015 (in millions) APCo $ 136.6 $ 135.4 I&M 125.3 134.8 OPCo 339.0 351.4 PSO 94.5 116.1 SWEPCo 121.2 151.8 |
Fees Paid to AEP Credit for Customer Accounts Receivable Sold | Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 1.8 $ 2.5 I&M 1.9 2.4 OPCo 7.9 8.0 PSO 1.4 1.4 SWEPCo 1.5 1.7 |
Proceeds on Sale of Receivables to AEP Credit | Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 384.4 $ 429.6 I&M 388.1 419.6 OPCo 646.6 715.0 PSO 272.1 302.5 SWEPCo 336.1 373.2 |
Public Service Co Of Oklahoma [Member] | |
Retirements and Principal Payments | Company Type of Debt Principal Amount Paid Interest Rate Due Date Retirements and Principal Payments: (in millions) (%) APCo Pollution Control Bonds $ 125.3 Variable 2016 APCo Securitization Bonds 11.2 2.008 2024 I&M Notes Payable 0.4 Variable 2016 I&M Notes Payable 0.3 2.12 2016 I&M Notes Payable 6.9 Variable 2017 I&M Notes Payable 10.2 Variable 2019 I&M Notes Payable 10.7 Variable 2019 I&M Other Long-term Debt 0.3 6.00 2025 OPCo Securitization Bonds 22.8 0.958 2018 PSO Other Long-term Debt 0.1 3.00 2027 SWEPCo Notes Payable 1.6 4.58 2032 Non-Registrant: AEGCo Senior Unsecured Notes 3.7 6.33 2037 AEP Subsidiaries Notes Payable 1.0 Variable 2017 TCC Securitization Bonds 44.2 6.25 2016 TCC Securitization Bonds 83.7 5.17 2018 Total Retirements and Principal Payments $ 322.4 |
Utility Money Pool Participants' Money Pool Activity and Authorized Borrowing Limits | Company Maximum Borrowings from the Utility Money Pool Maximum Loans to the Utility Money Pool Average Borrowings from the Utility Money Pool Average Loans to the Utility Money Pool Net Loans to (Borrowings from) the Utility Money Pool as of March 31, 2016 Authorized Short-term Borrowing Limit (in millions) APCo $ 286.9 $ 25.7 $ 183.2 $ 25.5 $ (146.4 ) $ 600.0 I&M 369.1 62.5 267.3 17.0 2.8 500.0 OPCo — 379.2 — 304.7 221.9 400.0 PSO — 91.0 — 48.7 8.4 300.0 SWEPCo 221.8 — 148.0 — (217.8 ) 350.0 |
Maximum and Minimum Interest Rates for Funds Either Borrowed from or Loaned to Utility Money Pool | Three Months Ended March 31, 2016 2015 Maximum Interest Rate 0.83 % 0.59 % Minimum Interest Rate 0.69 % 0.39 % |
Average Interest Rates for Funds Borrowed from and Loaned to Utility Money Pool | Average Interest Rate for Funds Borrowed from the Utility Money Pool for Average Interest Rate for Funds Loaned to the Utility Money Pool for Three Months Ended March 31, Three Months Ended March 31, Company 2016 2015 2016 2015 APCo 0.73 % — % 0.73 % 0.45 % I&M 0.72 % 0.46 % 0.74 % 0.46 % OPCo — % — % 0.73 % 0.46 % PSO — % 0.49 % 0.72 % 0.44 % SWEPCo 0.73 % 0.46 % — % 0.52 % |
Accounts Receivable and Accrued Unbilled Revenues | Company March 31, 2016 December 31, 2015 (in millions) APCo $ 136.6 $ 135.4 I&M 125.3 134.8 OPCo 339.0 351.4 PSO 94.5 116.1 SWEPCo 121.2 151.8 |
Fees Paid to AEP Credit for Customer Accounts Receivable Sold | Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 1.8 $ 2.5 I&M 1.9 2.4 OPCo 7.9 8.0 PSO 1.4 1.4 SWEPCo 1.5 1.7 |
Proceeds on Sale of Receivables to AEP Credit | Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 384.4 $ 429.6 I&M 388.1 419.6 OPCo 646.6 715.0 PSO 272.1 302.5 SWEPCo 336.1 373.2 |
Southwestern Electric Power Co [Member] | |
Retirements and Principal Payments | Company Type of Debt Principal Amount Paid Interest Rate Due Date Retirements and Principal Payments: (in millions) (%) APCo Pollution Control Bonds $ 125.3 Variable 2016 APCo Securitization Bonds 11.2 2.008 2024 I&M Notes Payable 0.4 Variable 2016 I&M Notes Payable 0.3 2.12 2016 I&M Notes Payable 6.9 Variable 2017 I&M Notes Payable 10.2 Variable 2019 I&M Notes Payable 10.7 Variable 2019 I&M Other Long-term Debt 0.3 6.00 2025 OPCo Securitization Bonds 22.8 0.958 2018 PSO Other Long-term Debt 0.1 3.00 2027 SWEPCo Notes Payable 1.6 4.58 2032 Non-Registrant: AEGCo Senior Unsecured Notes 3.7 6.33 2037 AEP Subsidiaries Notes Payable 1.0 Variable 2017 TCC Securitization Bonds 44.2 6.25 2016 TCC Securitization Bonds 83.7 5.17 2018 Total Retirements and Principal Payments $ 322.4 |
Utility Money Pool Participants' Money Pool Activity and Authorized Borrowing Limits | Company Maximum Borrowings from the Utility Money Pool Maximum Loans to the Utility Money Pool Average Borrowings from the Utility Money Pool Average Loans to the Utility Money Pool Net Loans to (Borrowings from) the Utility Money Pool as of March 31, 2016 Authorized Short-term Borrowing Limit (in millions) APCo $ 286.9 $ 25.7 $ 183.2 $ 25.5 $ (146.4 ) $ 600.0 I&M 369.1 62.5 267.3 17.0 2.8 500.0 OPCo — 379.2 — 304.7 221.9 400.0 PSO — 91.0 — 48.7 8.4 300.0 SWEPCo 221.8 — 148.0 — (217.8 ) 350.0 |
Maximum and Minimum Interest Rates for Funds Either Borrowed from or Loaned to Utility Money Pool | Three Months Ended March 31, 2016 2015 Maximum Interest Rate 0.83 % 0.59 % Minimum Interest Rate 0.69 % 0.39 % |
Average Interest Rates for Funds Borrowed from and Loaned to Utility Money Pool | Average Interest Rate for Funds Borrowed from the Utility Money Pool for Average Interest Rate for Funds Loaned to the Utility Money Pool for Three Months Ended March 31, Three Months Ended March 31, Company 2016 2015 2016 2015 APCo 0.73 % — % 0.73 % 0.45 % I&M 0.72 % 0.46 % 0.74 % 0.46 % OPCo — % — % 0.73 % 0.46 % PSO — % 0.49 % 0.72 % 0.44 % SWEPCo 0.73 % 0.46 % — % 0.52 % |
Accounts Receivable and Accrued Unbilled Revenues | Company March 31, 2016 December 31, 2015 (in millions) APCo $ 136.6 $ 135.4 I&M 125.3 134.8 OPCo 339.0 351.4 PSO 94.5 116.1 SWEPCo 121.2 151.8 |
Fees Paid to AEP Credit for Customer Accounts Receivable Sold | Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 1.8 $ 2.5 I&M 1.9 2.4 OPCo 7.9 8.0 PSO 1.4 1.4 SWEPCo 1.5 1.7 |
Proceeds on Sale of Receivables to AEP Credit | Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 384.4 $ 429.6 I&M 388.1 419.6 OPCo 646.6 715.0 PSO 272.1 302.5 SWEPCo 336.1 373.2 |
Nonutility Money Pool Activity [Table Text Block] | Maximum Average Loans Loans Loans to the to the to the Nonutility Nonutility Nonutility Money Pool as of Money Pool Money Pool March 31, 2016 (in millions) $ 2.0 $ 2.0 $ 2.0 |
Maximum Minimum Average Interest Rates for Funds Borrowed from Loaned to Nonutility Money Pool [Text Block] | Maximum Minimum Average Interest Rate Interest Rate Interest Rate for Funds for Funds for Funds Three Loaned to Loaned to Loaned to Months Ended the Nonutility the Nonutility the Nonutility March 31, Money Pool Money Pool Money Pool 2016 0.83 % 0.69 % 0.73 % |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Consolidated Assets and Liabilities of Variable Interest Entities | AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES VARIABLE INTEREST ENTITIES March 31, 2016 Registrant Subsidiaries Other Consolidated VIEs SWEPCo Sabine I&M DCC Fuel OPCo APCo AEP Credit TCC Transition Funding Protected Cell of EIS Transource Energy (in millions) ASSETS Current Assets $ 59.6 $ 79.6 $ 18.8 $ 10.8 $ 850.4 $ 139.4 $ 172.5 $ 13.6 Net Property, Plant and Equipment 140.4 129.0 — — — — — 253.1 Other Noncurrent Assets 62.8 67.7 150.6 (a) 326.2 (b) 7.6 1,316.8 (c) 2.0 6.3 Total Assets $ 262.8 $ 276.3 $ 169.4 $ 337.0 $ 858.0 $ 1,456.2 $ 174.5 $ 273.0 LIABILITIES AND EQUITY Current Liabilities $ 37.3 $ 73.4 $ 46.2 $ 24.8 $ 781.9 $ 238.0 $ 48.8 $ 44.5 Noncurrent Liabilities 225.1 202.9 121.9 310.9 0.4 1,200.1 81.8 118.7 Equity 0.4 — 1.3 1.3 75.7 18.1 43.9 109.8 Total Liabilities and Equity $ 262.8 $ 276.3 $ 169.4 $ 337.0 $ 858.0 $ 1,456.2 $ 174.5 $ 273.0 (a) Includes an intercompany item eliminated in consolidation of $70.7 million . (b) Includes an intercompany item eliminated in consolidation of $3.9 million . (c) Includes an intercompany item eliminated in consolidation of $66.6 million . AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES VARIABLE INTEREST ENTITIES December 31, 2015 Registrant Subsidiaries Other Consolidated VIEs SWEPCo Sabine I&M DCC Fuel OPCo APCo AEP Credit TCC Transition Funding Protected Cell of EIS Transource Energy (in millions) ASSETS Current Assets $ 61.7 $ 91.1 $ 31.2 $ 18.5 $ 925.7 $ 234.1 $ 165.3 $ 10.8 Net Property, Plant and Equipment 147.0 159.9 — — — — — 227.2 Other Noncurrent Assets 61.8 84.6 162.0 (a) 332.0 (b) 6.4 1,365.7 (c) 1.9 5.5 Total Assets $ 270.5 $ 335.6 $ 193.2 $ 350.5 $ 932.1 $ 1,599.8 $ 167.2 $ 243.5 LIABILITIES AND EQUITY Current Liabilities $ 47.7 $ 84.8 $ 47.3 $ 27.1 $ 855.1 $ 291.7 $ 41.8 $ 36.6 Noncurrent Liabilities 222.3 250.8 144.6 321.5 0.3 1,290.0 83.9 113.0 Equity 0.5 — 1.3 1.9 76.7 18.1 41.5 93.9 Total Liabilities and Equity $ 270.5 $ 335.6 $ 193.2 $ 350.5 $ 932.1 $ 1,599.8 $ 167.2 $ 243.5 (a) Includes an intercompany item eliminated in consolidation of $76.1 million . (b) Includes an intercompany item eliminated in consolidation of $4.0 million . (c) Includes an intercompany item eliminated in consolidation of $68.2 million . |
Appalachian Power Co [Member] | Billings from AEP Service Corporation [Member] | |
Billings from Significant Variable Interest | Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 56.6 $ 48.2 I&M 35.0 33.5 OPCo 44.5 39.2 PSO 28.5 23.5 SWEPCo 36.7 31.5 |
Appalachian Power Co [Member] | Carrying Amount in AEPSC's Accounts Payable [Member] | |
Carrying Amount and Classification of Variable Interest in Accounts Payable | March 31, 2016 December 31, 2015 Company As Reported on the Balance Sheet Maximum Exposure As Reported on the Balance Sheet Maximum Exposure (in millions) APCo $ 21.1 $ 21.1 $ 25.8 $ 25.8 I&M 11.6 11.6 16.6 16.6 OPCo 14.9 14.9 23.3 23.3 PSO 9.1 9.1 12.6 12.6 SWEPCo 12.6 12.6 16.4 16.4 |
Appalachian Power Co [Member] | Appalachian Consumer Rate Relief Funding [Member] | |
Consolidated Assets and Liabilities of Variable Interest Entities | AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES VARIABLE INTEREST ENTITIES March 31, 2016 Registrant Subsidiaries Other Consolidated VIEs SWEPCo Sabine I&M DCC Fuel OPCo APCo AEP Credit TCC Transition Funding Protected Cell of EIS Transource Energy (in millions) ASSETS Current Assets $ 59.6 $ 79.6 $ 18.8 $ 10.8 $ 850.4 $ 139.4 $ 172.5 $ 13.6 Net Property, Plant and Equipment 140.4 129.0 — — — — — 253.1 Other Noncurrent Assets 62.8 67.7 150.6 (a) 326.2 (b) 7.6 1,316.8 (c) 2.0 6.3 Total Assets $ 262.8 $ 276.3 $ 169.4 $ 337.0 $ 858.0 $ 1,456.2 $ 174.5 $ 273.0 LIABILITIES AND EQUITY Current Liabilities $ 37.3 $ 73.4 $ 46.2 $ 24.8 $ 781.9 $ 238.0 $ 48.8 $ 44.5 Noncurrent Liabilities 225.1 202.9 121.9 310.9 0.4 1,200.1 81.8 118.7 Equity 0.4 — 1.3 1.3 75.7 18.1 43.9 109.8 Total Liabilities and Equity $ 262.8 $ 276.3 $ 169.4 $ 337.0 $ 858.0 $ 1,456.2 $ 174.5 $ 273.0 (a) Includes an intercompany item eliminated in consolidation of $70.7 million . (b) Includes an intercompany item eliminated in consolidation of $3.9 million . (c) Includes an intercompany item eliminated in consolidation of $66.6 million . AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES VARIABLE INTEREST ENTITIES December 31, 2015 Registrant Subsidiaries Other Consolidated VIEs SWEPCo Sabine I&M DCC Fuel OPCo APCo AEP Credit TCC Transition Funding Protected Cell of EIS Transource Energy (in millions) ASSETS Current Assets $ 61.7 $ 91.1 $ 31.2 $ 18.5 $ 925.7 $ 234.1 $ 165.3 $ 10.8 Net Property, Plant and Equipment 147.0 159.9 — — — — — 227.2 Other Noncurrent Assets 61.8 84.6 162.0 (a) 332.0 (b) 6.4 1,365.7 (c) 1.9 5.5 Total Assets $ 270.5 $ 335.6 $ 193.2 $ 350.5 $ 932.1 $ 1,599.8 $ 167.2 $ 243.5 LIABILITIES AND EQUITY Current Liabilities $ 47.7 $ 84.8 $ 47.3 $ 27.1 $ 855.1 $ 291.7 $ 41.8 $ 36.6 Noncurrent Liabilities 222.3 250.8 144.6 321.5 0.3 1,290.0 83.9 113.0 Equity 0.5 — 1.3 1.9 76.7 18.1 41.5 93.9 Total Liabilities and Equity $ 270.5 $ 335.6 $ 193.2 $ 350.5 $ 932.1 $ 1,599.8 $ 167.2 $ 243.5 (a) Includes an intercompany item eliminated in consolidation of $76.1 million . (b) Includes an intercompany item eliminated in consolidation of $4.0 million . (c) Includes an intercompany item eliminated in consolidation of $68.2 million . |
Indiana Michigan Power Co [Member] | Billings from AEP Service Corporation [Member] | |
Billings from Significant Variable Interest | Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 56.6 $ 48.2 I&M 35.0 33.5 OPCo 44.5 39.2 PSO 28.5 23.5 SWEPCo 36.7 31.5 |
Indiana Michigan Power Co [Member] | Carrying Amount in AEPSC's Accounts Payable [Member] | |
Carrying Amount and Classification of Variable Interest in Accounts Payable | March 31, 2016 December 31, 2015 Company As Reported on the Balance Sheet Maximum Exposure As Reported on the Balance Sheet Maximum Exposure (in millions) APCo $ 21.1 $ 21.1 $ 25.8 $ 25.8 I&M 11.6 11.6 16.6 16.6 OPCo 14.9 14.9 23.3 23.3 PSO 9.1 9.1 12.6 12.6 SWEPCo 12.6 12.6 16.4 16.4 |
Indiana Michigan Power Co [Member] | DCC Fuel [Member] | |
Consolidated Assets and Liabilities of Variable Interest Entities | AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES VARIABLE INTEREST ENTITIES March 31, 2016 Registrant Subsidiaries Other Consolidated VIEs SWEPCo Sabine I&M DCC Fuel OPCo APCo AEP Credit TCC Transition Funding Protected Cell of EIS Transource Energy (in millions) ASSETS Current Assets $ 59.6 $ 79.6 $ 18.8 $ 10.8 $ 850.4 $ 139.4 $ 172.5 $ 13.6 Net Property, Plant and Equipment 140.4 129.0 — — — — — 253.1 Other Noncurrent Assets 62.8 67.7 150.6 (a) 326.2 (b) 7.6 1,316.8 (c) 2.0 6.3 Total Assets $ 262.8 $ 276.3 $ 169.4 $ 337.0 $ 858.0 $ 1,456.2 $ 174.5 $ 273.0 LIABILITIES AND EQUITY Current Liabilities $ 37.3 $ 73.4 $ 46.2 $ 24.8 $ 781.9 $ 238.0 $ 48.8 $ 44.5 Noncurrent Liabilities 225.1 202.9 121.9 310.9 0.4 1,200.1 81.8 118.7 Equity 0.4 — 1.3 1.3 75.7 18.1 43.9 109.8 Total Liabilities and Equity $ 262.8 $ 276.3 $ 169.4 $ 337.0 $ 858.0 $ 1,456.2 $ 174.5 $ 273.0 (a) Includes an intercompany item eliminated in consolidation of $70.7 million . (b) Includes an intercompany item eliminated in consolidation of $3.9 million . (c) Includes an intercompany item eliminated in consolidation of $66.6 million . AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES VARIABLE INTEREST ENTITIES December 31, 2015 Registrant Subsidiaries Other Consolidated VIEs SWEPCo Sabine I&M DCC Fuel OPCo APCo AEP Credit TCC Transition Funding Protected Cell of EIS Transource Energy (in millions) ASSETS Current Assets $ 61.7 $ 91.1 $ 31.2 $ 18.5 $ 925.7 $ 234.1 $ 165.3 $ 10.8 Net Property, Plant and Equipment 147.0 159.9 — — — — — 227.2 Other Noncurrent Assets 61.8 84.6 162.0 (a) 332.0 (b) 6.4 1,365.7 (c) 1.9 5.5 Total Assets $ 270.5 $ 335.6 $ 193.2 $ 350.5 $ 932.1 $ 1,599.8 $ 167.2 $ 243.5 LIABILITIES AND EQUITY Current Liabilities $ 47.7 $ 84.8 $ 47.3 $ 27.1 $ 855.1 $ 291.7 $ 41.8 $ 36.6 Noncurrent Liabilities 222.3 250.8 144.6 321.5 0.3 1,290.0 83.9 113.0 Equity 0.5 — 1.3 1.9 76.7 18.1 41.5 93.9 Total Liabilities and Equity $ 270.5 $ 335.6 $ 193.2 $ 350.5 $ 932.1 $ 1,599.8 $ 167.2 $ 243.5 (a) Includes an intercompany item eliminated in consolidation of $76.1 million . (b) Includes an intercompany item eliminated in consolidation of $4.0 million . (c) Includes an intercompany item eliminated in consolidation of $68.2 million . |
Ohio Power Co [Member] | Billings from AEP Service Corporation [Member] | |
Billings from Significant Variable Interest | Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 56.6 $ 48.2 I&M 35.0 33.5 OPCo 44.5 39.2 PSO 28.5 23.5 SWEPCo 36.7 31.5 |
Ohio Power Co [Member] | Carrying Amount in AEPSC's Accounts Payable [Member] | |
Carrying Amount and Classification of Variable Interest in Accounts Payable | March 31, 2016 December 31, 2015 Company As Reported on the Balance Sheet Maximum Exposure As Reported on the Balance Sheet Maximum Exposure (in millions) APCo $ 21.1 $ 21.1 $ 25.8 $ 25.8 I&M 11.6 11.6 16.6 16.6 OPCo 14.9 14.9 23.3 23.3 PSO 9.1 9.1 12.6 12.6 SWEPCo 12.6 12.6 16.4 16.4 |
Ohio Power Co [Member] | Ohio Phase-In-Recovery Funding [Member] | |
Consolidated Assets and Liabilities of Variable Interest Entities | AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES VARIABLE INTEREST ENTITIES March 31, 2016 Registrant Subsidiaries Other Consolidated VIEs SWEPCo Sabine I&M DCC Fuel OPCo APCo AEP Credit TCC Transition Funding Protected Cell of EIS Transource Energy (in millions) ASSETS Current Assets $ 59.6 $ 79.6 $ 18.8 $ 10.8 $ 850.4 $ 139.4 $ 172.5 $ 13.6 Net Property, Plant and Equipment 140.4 129.0 — — — — — 253.1 Other Noncurrent Assets 62.8 67.7 150.6 (a) 326.2 (b) 7.6 1,316.8 (c) 2.0 6.3 Total Assets $ 262.8 $ 276.3 $ 169.4 $ 337.0 $ 858.0 $ 1,456.2 $ 174.5 $ 273.0 LIABILITIES AND EQUITY Current Liabilities $ 37.3 $ 73.4 $ 46.2 $ 24.8 $ 781.9 $ 238.0 $ 48.8 $ 44.5 Noncurrent Liabilities 225.1 202.9 121.9 310.9 0.4 1,200.1 81.8 118.7 Equity 0.4 — 1.3 1.3 75.7 18.1 43.9 109.8 Total Liabilities and Equity $ 262.8 $ 276.3 $ 169.4 $ 337.0 $ 858.0 $ 1,456.2 $ 174.5 $ 273.0 (a) Includes an intercompany item eliminated in consolidation of $70.7 million . (b) Includes an intercompany item eliminated in consolidation of $3.9 million . (c) Includes an intercompany item eliminated in consolidation of $66.6 million . AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES VARIABLE INTEREST ENTITIES December 31, 2015 Registrant Subsidiaries Other Consolidated VIEs SWEPCo Sabine I&M DCC Fuel OPCo APCo AEP Credit TCC Transition Funding Protected Cell of EIS Transource Energy (in millions) ASSETS Current Assets $ 61.7 $ 91.1 $ 31.2 $ 18.5 $ 925.7 $ 234.1 $ 165.3 $ 10.8 Net Property, Plant and Equipment 147.0 159.9 — — — — — 227.2 Other Noncurrent Assets 61.8 84.6 162.0 (a) 332.0 (b) 6.4 1,365.7 (c) 1.9 5.5 Total Assets $ 270.5 $ 335.6 $ 193.2 $ 350.5 $ 932.1 $ 1,599.8 $ 167.2 $ 243.5 LIABILITIES AND EQUITY Current Liabilities $ 47.7 $ 84.8 $ 47.3 $ 27.1 $ 855.1 $ 291.7 $ 41.8 $ 36.6 Noncurrent Liabilities 222.3 250.8 144.6 321.5 0.3 1,290.0 83.9 113.0 Equity 0.5 — 1.3 1.9 76.7 18.1 41.5 93.9 Total Liabilities and Equity $ 270.5 $ 335.6 $ 193.2 $ 350.5 $ 932.1 $ 1,599.8 $ 167.2 $ 243.5 (a) Includes an intercompany item eliminated in consolidation of $76.1 million . (b) Includes an intercompany item eliminated in consolidation of $4.0 million . (c) Includes an intercompany item eliminated in consolidation of $68.2 million . |
Public Service Co Of Oklahoma [Member] | Billings from AEP Service Corporation [Member] | |
Billings from Significant Variable Interest | Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 56.6 $ 48.2 I&M 35.0 33.5 OPCo 44.5 39.2 PSO 28.5 23.5 SWEPCo 36.7 31.5 |
Public Service Co Of Oklahoma [Member] | Carrying Amount in AEPSC's Accounts Payable [Member] | |
Carrying Amount and Classification of Variable Interest in Accounts Payable | March 31, 2016 December 31, 2015 Company As Reported on the Balance Sheet Maximum Exposure As Reported on the Balance Sheet Maximum Exposure (in millions) APCo $ 21.1 $ 21.1 $ 25.8 $ 25.8 I&M 11.6 11.6 16.6 16.6 OPCo 14.9 14.9 23.3 23.3 PSO 9.1 9.1 12.6 12.6 SWEPCo 12.6 12.6 16.4 16.4 |
Southwestern Electric Power Co [Member] | Billings from AEP Service Corporation [Member] | |
Billings from Significant Variable Interest | Three Months Ended March 31, Company 2016 2015 (in millions) APCo $ 56.6 $ 48.2 I&M 35.0 33.5 OPCo 44.5 39.2 PSO 28.5 23.5 SWEPCo 36.7 31.5 |
Southwestern Electric Power Co [Member] | Carrying Amount in AEPSC's Accounts Payable [Member] | |
Carrying Amount and Classification of Variable Interest in Accounts Payable | March 31, 2016 December 31, 2015 Company As Reported on the Balance Sheet Maximum Exposure As Reported on the Balance Sheet Maximum Exposure (in millions) APCo $ 21.1 $ 21.1 $ 25.8 $ 25.8 I&M 11.6 11.6 16.6 16.6 OPCo 14.9 14.9 23.3 23.3 PSO 9.1 9.1 12.6 12.6 SWEPCo 12.6 12.6 16.4 16.4 |
Southwestern Electric Power Co [Member] | Sabine Mining Co [Member] | |
Consolidated Assets and Liabilities of Variable Interest Entities | AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES VARIABLE INTEREST ENTITIES March 31, 2016 Registrant Subsidiaries Other Consolidated VIEs SWEPCo Sabine I&M DCC Fuel OPCo APCo AEP Credit TCC Transition Funding Protected Cell of EIS Transource Energy (in millions) ASSETS Current Assets $ 59.6 $ 79.6 $ 18.8 $ 10.8 $ 850.4 $ 139.4 $ 172.5 $ 13.6 Net Property, Plant and Equipment 140.4 129.0 — — — — — 253.1 Other Noncurrent Assets 62.8 67.7 150.6 (a) 326.2 (b) 7.6 1,316.8 (c) 2.0 6.3 Total Assets $ 262.8 $ 276.3 $ 169.4 $ 337.0 $ 858.0 $ 1,456.2 $ 174.5 $ 273.0 LIABILITIES AND EQUITY Current Liabilities $ 37.3 $ 73.4 $ 46.2 $ 24.8 $ 781.9 $ 238.0 $ 48.8 $ 44.5 Noncurrent Liabilities 225.1 202.9 121.9 310.9 0.4 1,200.1 81.8 118.7 Equity 0.4 — 1.3 1.3 75.7 18.1 43.9 109.8 Total Liabilities and Equity $ 262.8 $ 276.3 $ 169.4 $ 337.0 $ 858.0 $ 1,456.2 $ 174.5 $ 273.0 (a) Includes an intercompany item eliminated in consolidation of $70.7 million . (b) Includes an intercompany item eliminated in consolidation of $3.9 million . (c) Includes an intercompany item eliminated in consolidation of $66.6 million . AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES VARIABLE INTEREST ENTITIES December 31, 2015 Registrant Subsidiaries Other Consolidated VIEs SWEPCo Sabine I&M DCC Fuel OPCo APCo AEP Credit TCC Transition Funding Protected Cell of EIS Transource Energy (in millions) ASSETS Current Assets $ 61.7 $ 91.1 $ 31.2 $ 18.5 $ 925.7 $ 234.1 $ 165.3 $ 10.8 Net Property, Plant and Equipment 147.0 159.9 — — — — — 227.2 Other Noncurrent Assets 61.8 84.6 162.0 (a) 332.0 (b) 6.4 1,365.7 (c) 1.9 5.5 Total Assets $ 270.5 $ 335.6 $ 193.2 $ 350.5 $ 932.1 $ 1,599.8 $ 167.2 $ 243.5 LIABILITIES AND EQUITY Current Liabilities $ 47.7 $ 84.8 $ 47.3 $ 27.1 $ 855.1 $ 291.7 $ 41.8 $ 36.6 Noncurrent Liabilities 222.3 250.8 144.6 321.5 0.3 1,290.0 83.9 113.0 Equity 0.5 — 1.3 1.9 76.7 18.1 41.5 93.9 Total Liabilities and Equity $ 270.5 $ 335.6 $ 193.2 $ 350.5 $ 932.1 $ 1,599.8 $ 167.2 $ 243.5 (a) Includes an intercompany item eliminated in consolidation of $76.1 million . (b) Includes an intercompany item eliminated in consolidation of $4.0 million . (c) Includes an intercompany item eliminated in consolidation of $68.2 million . |
Southwestern Electric Power Co [Member] | Dolet Hills Lignite Co, LLC [Member] | |
Companys Investment In Joint Venture | March 31, 2016 December 31, 2015 As Reported on the Balance Sheet Maximum Exposure As Reported on the Balance Sheet Maximum Exposure (in millions) Capital Contribution from SWEPCo $ 7.6 $ 7.6 $ 7.6 $ 7.6 Retained Earnings 8.7 8.7 7.7 7.7 SWEPCo’s Guarantee of Debt — 87.4 — 82.9 Total Investment in DHLC $ 16.3 $ 103.7 $ 15.3 $ 98.2 |
PATH West Virginia Transmission Co, LLC [Member] | |
Companys Investment In Joint Venture | March 31, 2016 December 31, 2015 As Reported on the Balance Sheet Maximum Exposure As Reported on Maximum Exposure (in millions) Capital Contribution from Parent $ 18.8 $ 18.8 $ 18.8 $ 18.8 Retained Earnings 2.2 2.2 2.2 2.2 Total Investment in PATH-WV $ 21.0 $ 21.0 $ 21.0 $ 21.0 |
Significant Accounting Matter38
Significant Accounting Matters (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Amounts Attributable to AEP Common Shareholders | ||
Income from Continuing Operations | $ 503.1 | $ 620.2 |
Net Income Attributable to Noncontrolling Interests | 1.9 | 1.5 |
Income (Loss) from Continuing Operations Attributable to Parent | $ 501.2 | $ 618.7 |
Weighted Average Number of Basic AEP Common Shares Outstanding | 491,108,392 | 489,597,986 |
Basic Earnings Per Share Attributable to AEP Common Shareholders from Continuing Operations | $ 1.02 | $ 1.27 |
Weighted Average Dilutive Effect of: | ||
Weighted Average Number of Diluted AEP Common Shares Outstanding | 491,332,305 | 489,936,726 |
Diluted Earnings Per Share Attributable to AEP Common Shareholders from Continuing Operations | $ 1.02 | $ 1.27 |
Organization and Summary of Significant Accounting Policies (Textuals) [Abstract] | ||
Antidilutive Shares Outstanding | 0 | 0 |
Southwestern Electric Power Co [Member] | ||
Amounts Attributable to AEP Common Shareholders | ||
Net Income Attributable to Noncontrolling Interests | $ 1.1 | $ 1 |
Restricted Stock Units [Member] | ||
Weighted Average Dilutive Effect of: | ||
Weighted Average Dilutive Effect of Shares | 200,000 | 300,000 |
Dilutive Securities, Effect on Basic Earnings Per Share | $ 0 | $ 0 |
Comprehensive Income (Details)
Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Changes in Accumulated Other Comprehensive Income (Loss) by Component | ||
Beginning Balance in AOCI | $ (127.1) | $ (103.1) |
Change in Fair Value Recognized in AOCI | (7.5) | 1.1 |
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Generation & Marketing Revenues | 35.6 | 27.5 |
Purchased Electricity for Resale | 731.4 | 718.4 |
Interest Expense | 217 | 218.7 |
Reclassifications from AOCI, before Income Tax (Expense) Credit | 1.3 | (10.3) |
Income Tax (Expense) Credit | (235.5) | (327.2) |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0.8 | (6.6) |
Net Current Period Other Comprehensive Income | (6.7) | (5.5) |
Pension and OPEB Adjustment Related to Mitchell Plant | 5.1 | |
Ending Balance in AOCI | (133.8) | (103.5) |
Securities Available for Sale [Member] | ||
Changes in Accumulated Other Comprehensive Income (Loss) by Component | ||
Beginning Balance in AOCI | 7.1 | 7.7 |
Change in Fair Value Recognized in AOCI | 0.6 | 0.5 |
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Reclassifications from AOCI, before Income Tax (Expense) Credit | 0 | 0 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0 | 0 |
Net Current Period Other Comprehensive Income | 0.6 | 0.5 |
Pension and OPEB Adjustment Related to Mitchell Plant | 0 | |
Ending Balance in AOCI | 7.7 | 8.2 |
Pension and OPEB [Member] | ||
Changes in Accumulated Other Comprehensive Income (Loss) by Component | ||
Beginning Balance in AOCI | (111.8) | (93.3) |
Change in Fair Value Recognized in AOCI | 0 | 0 |
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Reclassifications from AOCI, before Income Tax (Expense) Credit | 0.2 | 0.5 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0.1 | 0.4 |
Net Current Period Other Comprehensive Income | 0.1 | 0.4 |
Pension and OPEB Adjustment Related to Mitchell Plant | 5.1 | |
Ending Balance in AOCI | (111.7) | (87.8) |
Commodity [Member] | Cash Flow Hedges [Member] | ||
Changes in Accumulated Other Comprehensive Income (Loss) by Component | ||
Beginning Balance in AOCI | (5.2) | 1.6 |
Change in Fair Value Recognized in AOCI | (8.1) | 0.7 |
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Reclassifications from AOCI, before Income Tax (Expense) Credit | 0.6 | (12) |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0.4 | (7.8) |
Net Current Period Other Comprehensive Income | (7.7) | (7.1) |
Pension and OPEB Adjustment Related to Mitchell Plant | 0 | |
Ending Balance in AOCI | (12.9) | (5.5) |
Interest Rate and Foreign Currency [Member] | Cash Flow Hedges [Member] | ||
Changes in Accumulated Other Comprehensive Income (Loss) by Component | ||
Beginning Balance in AOCI | (17.2) | (19.1) |
Change in Fair Value Recognized in AOCI | 0 | (0.1) |
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Reclassifications from AOCI, before Income Tax (Expense) Credit | 0.5 | 1.2 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0.3 | 0.8 |
Net Current Period Other Comprehensive Income | 0.3 | 0.7 |
Pension and OPEB Adjustment Related to Mitchell Plant | 0 | |
Ending Balance in AOCI | (16.9) | (18.4) |
Reclassifications from Accumulated Other Comprehensive Income [Member] | ||
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Generation & Marketing Revenues | (8.6) | (12.7) |
Purchased Electricity for Resale | 9.2 | 0.7 |
Interest Expense | 0.5 | 1.2 |
Amortization of Prior Service Cost (Credit) | (4.9) | (4.8) |
Amortization of Actuarial (Gains)/Losses | 5.1 | 5.3 |
Income Tax (Expense) Credit | 0.5 | (3.7) |
Reclassifications from Accumulated Other Comprehensive Income [Member] | Securities Available for Sale [Member] | ||
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Generation & Marketing Revenues | 0 | 0 |
Purchased Electricity for Resale | 0 | 0 |
Interest Expense | 0 | 0 |
Amortization of Prior Service Cost (Credit) | 0 | 0 |
Amortization of Actuarial (Gains)/Losses | 0 | 0 |
Income Tax (Expense) Credit | 0 | 0 |
Reclassifications from Accumulated Other Comprehensive Income [Member] | Pension and OPEB [Member] | ||
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Generation & Marketing Revenues | 0 | 0 |
Purchased Electricity for Resale | 0 | 0 |
Interest Expense | 0 | 0 |
Amortization of Prior Service Cost (Credit) | (4.9) | (4.8) |
Amortization of Actuarial (Gains)/Losses | 5.1 | 5.3 |
Income Tax (Expense) Credit | 0.1 | 0.1 |
Reclassifications from Accumulated Other Comprehensive Income [Member] | Commodity [Member] | Cash Flow Hedges [Member] | ||
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Generation & Marketing Revenues | (8.6) | (12.7) |
Purchased Electricity for Resale | 9.2 | 0.7 |
Interest Expense | 0 | 0 |
Amortization of Prior Service Cost (Credit) | 0 | 0 |
Amortization of Actuarial (Gains)/Losses | 0 | 0 |
Income Tax (Expense) Credit | 0.2 | (4.2) |
Reclassifications from Accumulated Other Comprehensive Income [Member] | Interest Rate and Foreign Currency [Member] | Cash Flow Hedges [Member] | ||
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Generation & Marketing Revenues | 0 | 0 |
Purchased Electricity for Resale | 0 | 0 |
Interest Expense | 0.5 | 1.2 |
Amortization of Prior Service Cost (Credit) | 0 | 0 |
Amortization of Actuarial (Gains)/Losses | 0 | 0 |
Income Tax (Expense) Credit | 0.2 | 0.4 |
Appalachian Power Co [Member] | ||
Changes in Accumulated Other Comprehensive Income (Loss) by Component | ||
Beginning Balance in AOCI | (2.8) | 5 |
Change in Fair Value Recognized in AOCI | 0 | 0 |
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Generation & Marketing Revenues | 4.1 | 2.3 |
Purchased Electricity for Resale | 108.2 | 112.7 |
Interest Expense | 47 | 50.3 |
Reclassifications from AOCI, before Income Tax (Expense) Credit | (0.8) | (0.5) |
Income Tax (Expense) Credit | (72.9) | (85.1) |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0.5 | 0.3 |
Net Current Period Other Comprehensive Income | (0.5) | (0.3) |
Ending Balance in AOCI | (3.3) | 4.7 |
Appalachian Power Co [Member] | Pension and OPEB [Member] | ||
Changes in Accumulated Other Comprehensive Income (Loss) by Component | ||
Beginning Balance in AOCI | (6.4) | 1.1 |
Change in Fair Value Recognized in AOCI | 0 | 0 |
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Reclassifications from AOCI, before Income Tax (Expense) Credit | (0.5) | (0.7) |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0.3 | 0.4 |
Net Current Period Other Comprehensive Income | (0.3) | (0.4) |
Ending Balance in AOCI | (6.7) | 0.7 |
Appalachian Power Co [Member] | Interest Rate and Foreign Currency [Member] | Cash Flow Hedges [Member] | ||
Changes in Accumulated Other Comprehensive Income (Loss) by Component | ||
Beginning Balance in AOCI | 3.6 | 3.9 |
Change in Fair Value Recognized in AOCI | 0 | 0 |
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Reclassifications from AOCI, before Income Tax (Expense) Credit | (0.3) | 0.2 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0.2 | (0.1) |
Net Current Period Other Comprehensive Income | (0.2) | 0.1 |
Ending Balance in AOCI | 3.4 | 4 |
Appalachian Power Co [Member] | Reclassifications from Accumulated Other Comprehensive Income [Member] | ||
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Interest Expense | (0.3) | 0.2 |
Amortization of Prior Service Cost (Credit) | (1.2) | (1.3) |
Amortization of Actuarial (Gains)/Losses | 0.7 | 0.6 |
Income Tax (Expense) Credit | (0.3) | (0.2) |
Appalachian Power Co [Member] | Reclassifications from Accumulated Other Comprehensive Income [Member] | Pension and OPEB [Member] | ||
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Interest Expense | 0 | 0 |
Amortization of Prior Service Cost (Credit) | (1.2) | (1.3) |
Amortization of Actuarial (Gains)/Losses | 0.7 | 0.6 |
Income Tax (Expense) Credit | (0.2) | (0.3) |
Appalachian Power Co [Member] | Reclassifications from Accumulated Other Comprehensive Income [Member] | Interest Rate and Foreign Currency [Member] | Cash Flow Hedges [Member] | ||
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Interest Expense | (0.3) | 0.2 |
Amortization of Prior Service Cost (Credit) | 0 | 0 |
Amortization of Actuarial (Gains)/Losses | 0 | 0 |
Income Tax (Expense) Credit | (0.1) | 0.1 |
Indiana Michigan Power Co [Member] | ||
Changes in Accumulated Other Comprehensive Income (Loss) by Component | ||
Beginning Balance in AOCI | (16.7) | (14.3) |
Change in Fair Value Recognized in AOCI | 0 | 0 |
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Generation & Marketing Revenues | 5.5 | 1 |
Purchased Electricity for Resale | 49.6 | 55.9 |
Interest Expense | 22.5 | 22.8 |
Reclassifications from AOCI, before Income Tax (Expense) Credit | 0.5 | 0.4 |
Income Tax (Expense) Credit | (24.1) | (34.7) |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (0.4) | (0.3) |
Net Current Period Other Comprehensive Income | 0.4 | 0.3 |
Ending Balance in AOCI | (16.3) | (14) |
Indiana Michigan Power Co [Member] | Pension and OPEB [Member] | ||
Changes in Accumulated Other Comprehensive Income (Loss) by Component | ||
Beginning Balance in AOCI | (3.4) | 0.1 |
Change in Fair Value Recognized in AOCI | 0 | 0 |
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Reclassifications from AOCI, before Income Tax (Expense) Credit | 0 | 0 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0 | 0 |
Net Current Period Other Comprehensive Income | 0 | 0 |
Ending Balance in AOCI | (3.4) | 0.1 |
Indiana Michigan Power Co [Member] | Interest Rate and Foreign Currency [Member] | Cash Flow Hedges [Member] | ||
Changes in Accumulated Other Comprehensive Income (Loss) by Component | ||
Beginning Balance in AOCI | (13.3) | (14.4) |
Change in Fair Value Recognized in AOCI | 0 | 0 |
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Reclassifications from AOCI, before Income Tax (Expense) Credit | 0.5 | 0.4 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (0.4) | (0.3) |
Net Current Period Other Comprehensive Income | 0.4 | 0.3 |
Ending Balance in AOCI | (12.9) | (14.1) |
Indiana Michigan Power Co [Member] | Reclassifications from Accumulated Other Comprehensive Income [Member] | ||
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Interest Expense | 0.5 | 0.4 |
Amortization of Prior Service Cost (Credit) | (0.2) | (0.2) |
Amortization of Actuarial (Gains)/Losses | 0.2 | 0.2 |
Income Tax (Expense) Credit | 0.1 | 0.1 |
Indiana Michigan Power Co [Member] | Reclassifications from Accumulated Other Comprehensive Income [Member] | Pension and OPEB [Member] | ||
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Interest Expense | 0 | 0 |
Amortization of Prior Service Cost (Credit) | (0.2) | (0.2) |
Amortization of Actuarial (Gains)/Losses | 0.2 | 0.2 |
Income Tax (Expense) Credit | 0 | 0 |
Indiana Michigan Power Co [Member] | Reclassifications from Accumulated Other Comprehensive Income [Member] | Interest Rate and Foreign Currency [Member] | Cash Flow Hedges [Member] | ||
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Interest Expense | 0.5 | 0.4 |
Amortization of Prior Service Cost (Credit) | 0 | 0 |
Amortization of Actuarial (Gains)/Losses | 0 | 0 |
Income Tax (Expense) Credit | 0.1 | 0.1 |
Ohio Power Co [Member] | ||
Changes in Accumulated Other Comprehensive Income (Loss) by Component | ||
Beginning Balance in AOCI | 4.3 | |
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Generation & Marketing Revenues | 2.1 | 2.1 |
Purchased Electricity for Resale | 164.9 | 142.1 |
Interest Expense | 31.4 | 32.4 |
Income Tax (Expense) Credit | (37.5) | (35.9) |
Net Current Period Other Comprehensive Income | (0.4) | (0.3) |
Ending Balance in AOCI | 3.9 | |
Ohio Power Co [Member] | Interest Rate and Foreign Currency [Member] | Cash Flow Hedges [Member] | ||
Changes in Accumulated Other Comprehensive Income (Loss) by Component | ||
Beginning Balance in AOCI | 4.3 | 5.6 |
Change in Fair Value Recognized in AOCI | 0 | 0 |
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Reclassifications from AOCI, before Income Tax (Expense) Credit | (0.5) | (0.5) |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0.4 | 0.3 |
Net Current Period Other Comprehensive Income | (0.4) | (0.3) |
Ending Balance in AOCI | 3.9 | 5.3 |
Ohio Power Co [Member] | Reclassifications from Accumulated Other Comprehensive Income [Member] | Interest Rate and Foreign Currency [Member] | Cash Flow Hedges [Member] | ||
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Interest Expense | (0.5) | (0.5) |
Income Tax (Expense) Credit | (0.1) | (0.2) |
Public Service Co Of Oklahoma [Member] | ||
Changes in Accumulated Other Comprehensive Income (Loss) by Component | ||
Beginning Balance in AOCI | 4.2 | |
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Generation & Marketing Revenues | 1.5 | 0.8 |
Purchased Electricity for Resale | 93.3 | 65.5 |
Interest Expense | 14.4 | 14.6 |
Income Tax (Expense) Credit | (8.2) | (8) |
Net Current Period Other Comprehensive Income | (0.2) | (0.2) |
Ending Balance in AOCI | 4 | |
Public Service Co Of Oklahoma [Member] | Interest Rate and Foreign Currency [Member] | Cash Flow Hedges [Member] | ||
Changes in Accumulated Other Comprehensive Income (Loss) by Component | ||
Beginning Balance in AOCI | 4.2 | 5 |
Change in Fair Value Recognized in AOCI | 0 | 0 |
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Reclassifications from AOCI, before Income Tax (Expense) Credit | (0.3) | (0.3) |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0.2 | 0.2 |
Net Current Period Other Comprehensive Income | (0.2) | (0.2) |
Ending Balance in AOCI | 4 | 4.8 |
Public Service Co Of Oklahoma [Member] | Reclassifications from Accumulated Other Comprehensive Income [Member] | Interest Rate and Foreign Currency [Member] | Cash Flow Hedges [Member] | ||
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Interest Expense | (0.3) | (0.3) |
Income Tax (Expense) Credit | (0.1) | (0.1) |
Southwestern Electric Power Co [Member] | ||
Changes in Accumulated Other Comprehensive Income (Loss) by Component | ||
Beginning Balance in AOCI | (9.4) | (7.5) |
Change in Fair Value Recognized in AOCI | 0 | 0 |
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Generation & Marketing Revenues | 0.5 | 0.5 |
Purchased Electricity for Resale | 28.1 | 20 |
Interest Expense | 27.9 | 30.2 |
Reclassifications from AOCI, before Income Tax (Expense) Credit | 0.4 | 0.5 |
Income Tax (Expense) Credit | (7.4) | (21.2) |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (0.3) | (0.3) |
Net Current Period Other Comprehensive Income | 0.3 | 0.3 |
Ending Balance in AOCI | (9.1) | (7.2) |
Southwestern Electric Power Co [Member] | Pension and OPEB [Member] | ||
Changes in Accumulated Other Comprehensive Income (Loss) by Component | ||
Beginning Balance in AOCI | (0.3) | 3.6 |
Change in Fair Value Recognized in AOCI | 0 | 0 |
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Reclassifications from AOCI, before Income Tax (Expense) Credit | (0.3) | (0.4) |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0.2 | 0.3 |
Net Current Period Other Comprehensive Income | (0.2) | (0.3) |
Ending Balance in AOCI | (0.5) | 3.3 |
Southwestern Electric Power Co [Member] | Interest Rate and Foreign Currency [Member] | Cash Flow Hedges [Member] | ||
Changes in Accumulated Other Comprehensive Income (Loss) by Component | ||
Beginning Balance in AOCI | (9.1) | (11.1) |
Change in Fair Value Recognized in AOCI | 0 | 0 |
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Reclassifications from AOCI, before Income Tax (Expense) Credit | 0.7 | 0.9 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (0.5) | (0.6) |
Net Current Period Other Comprehensive Income | 0.5 | 0.6 |
Ending Balance in AOCI | (8.6) | (10.5) |
Southwestern Electric Power Co [Member] | Reclassifications from Accumulated Other Comprehensive Income [Member] | ||
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Interest Expense | 0.7 | 0.9 |
Amortization of Prior Service Cost (Credit) | (0.5) | (0.5) |
Amortization of Actuarial (Gains)/Losses | 0.2 | 0.1 |
Income Tax (Expense) Credit | 0.1 | 0.2 |
Southwestern Electric Power Co [Member] | Reclassifications from Accumulated Other Comprehensive Income [Member] | Pension and OPEB [Member] | ||
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Interest Expense | 0 | 0 |
Amortization of Prior Service Cost (Credit) | (0.5) | (0.5) |
Amortization of Actuarial (Gains)/Losses | 0.2 | 0.1 |
Income Tax (Expense) Credit | (0.1) | (0.1) |
Southwestern Electric Power Co [Member] | Reclassifications from Accumulated Other Comprehensive Income [Member] | Interest Rate and Foreign Currency [Member] | Cash Flow Hedges [Member] | ||
Reclassifications From Accumulated Other Comprehensive Income [Abstract] | ||
Interest Expense | 0.7 | 0.9 |
Amortization of Prior Service Cost (Credit) | 0 | 0 |
Amortization of Actuarial (Gains)/Losses | 0 | 0 |
Income Tax (Expense) Credit | $ 0.2 | $ 0.3 |
Rate Matters - Regulatory Asset
Rate Matters - Regulatory Assets (Details) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | $ 5,109.5 | $ 5,140.3 |
Appalachian Power Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 1,125.7 | 1,154.2 |
Indiana Michigan Power Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 813.8 | 804.3 |
Ohio Power Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 1,056.5 | 1,113 |
Public Service Co Of Oklahoma [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 224.9 | 214.8 |
Southwestern Electric Power Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 422 | 415.8 |
Regulatory Assets Pending Final Regulatory Approval [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 178.1 | 167.9 |
Regulatory Assets Pending Final Regulatory Approval [Member] | Appalachian Power Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 58.1 | 57.3 |
Regulatory Assets Pending Final Regulatory Approval [Member] | Indiana Michigan Power Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 62.2 | 59.3 |
Regulatory Assets Pending Final Regulatory Approval [Member] | Ohio Power Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 1.8 | 1.3 |
Regulatory Assets Pending Final Regulatory Approval [Member] | Public Service Co Of Oklahoma [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 18.1 | 13.4 |
Regulatory Assets Pending Final Regulatory Approval [Member] | Southwestern Electric Power Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 6.4 | 5.9 |
Amos Plant Transfer Costs - West Virginia [Member] | Regulatory Assets Currently Not Earning Return [Member] | Regulatory Assets Pending Final Regulatory Approval [Member] | Appalachian Power Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 2 | 2 |
Asset Retirement Obligation - Arkansas, Louisiana [Member] | Regulatory Assets Currently Not Earning Return [Member] | Regulatory Assets Pending Final Regulatory Approval [Member] | Southwestern Electric Power Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 1.9 | 1.7 |
Cook Plant Turbine [Member] | Regulatory Assets Currently Not Earning Return [Member] | Regulatory Assets Pending Final Regulatory Approval [Member] | Indiana Michigan Power Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 10.4 | 9.7 |
Deferred Cook Plant Life Cycle Management Project Costs - Michigan [Member] | Regulatory Assets Currently Not Earning Return [Member] | Regulatory Assets Pending Final Regulatory Approval [Member] | Indiana Michigan Power Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 5.4 | 4.2 |
Gridsmart Costs [Member] | Regulatory Assets Currently Not Earning Return [Member] | Regulatory Assets Pending Final Regulatory Approval [Member] | Ohio Power Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 1.8 | 1.3 |
Other Regulatory Assets Pending Final Regulatory Approval [Member] | Regulatory Assets Currently Not Earning Return [Member] | Regulatory Assets Pending Final Regulatory Approval [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 35.4 | 31.7 |
Other Regulatory Assets Pending Final Regulatory Approval [Member] | Regulatory Assets Currently Not Earning Return [Member] | Regulatory Assets Pending Final Regulatory Approval [Member] | Appalachian Power Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 0.6 | 0.6 |
Other Regulatory Assets Pending Final Regulatory Approval [Member] | Regulatory Assets Currently Not Earning Return [Member] | Regulatory Assets Pending Final Regulatory Approval [Member] | Indiana Michigan Power Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 0.2 | 0 |
Other Regulatory Assets Pending Final Regulatory Approval [Member] | Regulatory Assets Currently Not Earning Return [Member] | Regulatory Assets Pending Final Regulatory Approval [Member] | Public Service Co Of Oklahoma [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 1.1 | 1.1 |
Other Regulatory Assets Pending Final Regulatory Approval [Member] | Regulatory Assets Currently Not Earning Return [Member] | Regulatory Assets Pending Final Regulatory Approval [Member] | Southwestern Electric Power Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 1.4 | 1.1 |
Peak Demand Reduction/Energy Efficiency [Member] | Regulatory Assets Currently Not Earning Return [Member] | Regulatory Assets Pending Final Regulatory Approval [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 14.1 | 13.1 |
Peak Demand Reduction/Energy Efficiency - Virginia [Member] | Regulatory Assets Currently Not Earning Return [Member] | Regulatory Assets Pending Final Regulatory Approval [Member] | Appalachian Power Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 13.6 | 12.7 |
Plant Retirement Costs - Asset Retirement Obligation Costs | Regulatory Assets Currently Not Earning Return [Member] | Regulatory Assets Pending Final Regulatory Approval [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 59.8 | 59.8 |
Plant Retirement Costs - Asset Retirement Obligation Costs | Regulatory Assets Currently Not Earning Return [Member] | Regulatory Assets Pending Final Regulatory Approval [Member] | Appalachian Power Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 32.7 | 32.7 |
Plant Retirement Costs - Asset Retirement Obligation Costs - Indiana [Member] | Regulatory Assets Currently Not Earning Return [Member] | Regulatory Assets Pending Final Regulatory Approval [Member] | Indiana Michigan Power Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 27.1 | 27.1 |
Plant Retirement Costs - Materials and Supplies | Regulatory Assets Currently Earning Return [Member] | Regulatory Assets Pending Final Regulatory Approval [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 20.8 | 20.9 |
Plant Retirement Costs - Materials and Supplies | Regulatory Assets Currently Earning Return [Member] | Regulatory Assets Pending Final Regulatory Approval [Member] | Appalachian Power Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 9.2 | 9.3 |
Plant Retirement Costs - Materials and Supplies | Regulatory Assets Currently Earning Return [Member] | Regulatory Assets Pending Final Regulatory Approval [Member] | Indiana Michigan Power Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 11.6 | 11.6 |
Rockport Plant Dry Sorbent Injection System - Indiana [Member] | Regulatory Assets Currently Not Earning Return [Member] | Regulatory Assets Pending Final Regulatory Approval [Member] | Indiana Michigan Power Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 3.6 | 2.8 |
Shipe Road Transmission Project - FERC [Member] | Regulatory Assets Currently Not Earning Return [Member] | Regulatory Assets Pending Final Regulatory Approval [Member] | Southwestern Electric Power Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 3.1 | 3.1 |
Storm Related Costs [Member] | Regulatory Assets Currently Earning Return [Member] | Regulatory Assets Pending Final Regulatory Approval [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 24.8 | 24.2 |
Storm Related Costs [Member] | Regulatory Assets Currently Not Earning Return [Member] | Regulatory Assets Pending Final Regulatory Approval [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 23.2 | 18.2 |
Storm Related Costs [Member] | Regulatory Assets Currently Not Earning Return [Member] | Regulatory Assets Pending Final Regulatory Approval [Member] | Public Service Co Of Oklahoma [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | 17 | 12.3 |
Stranded Costs on Abandoned Plants [Member] | Regulatory Assets Currently Not Earning Return [Member] | Regulatory Assets Pending Final Regulatory Approval [Member] | Indiana Michigan Power Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Assets, Noncurrent | $ 3.9 | $ 3.9 |
Rate Matters - East Companies
Rate Matters - East Companies (Details) $ in Millions | 1 Months Ended | 3 Months Ended | |
Apr. 28, 2016USD ($)$ / MWD | Mar. 31, 2016USD ($)$ / MWDMW | Dec. 31, 2015USD ($) | |
Public Utilities, General Disclosures [Line Items] | |||
Regulatory Assets, Noncurrent | $ 5,109.5 | $ 5,140.3 | |
Appalachian Power Co [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Regulatory Assets, Noncurrent | 1,125.7 | 1,154.2 | |
Indiana Michigan Power Co [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Regulatory Assets, Noncurrent | 813.8 | 804.3 | |
Ohio Power Co [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Regulatory Assets, Noncurrent | 1,056.5 | $ 1,113 | |
Kingsport Base Rate Case - 2015 [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Requested Base Rate Increase | $ 12 | ||
Requested Return on Equity | 10.66% | ||
Ohio Electric Security Plan Filing [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
PUCO-ordered Fixed Price per MW Day for Customers Who Switch During ESP Period | $ / MWD | 188.88 | ||
Reliability Pricing Model Rate per MW Day in Effect through May 2014 | $ / MWD | 34 | ||
Reliability Pricing Model Rate per MW Day in Effect from June 2014 through May 2015 | $ / MWD | 150 | ||
Retail Stability Rider through May 2014 ($ Per MWh) | $ / MWD | 3.50 | ||
Retail Stability Rider for the Period June 2014 through May 2015 ($ per MWh) | $ / MWD | 4 | ||
Amount of Retail Stability Rider Applied to the Deferred Capacity Costs ($ per MWh) | $ / MWD | 1 | ||
Retail Stability Rider Rate to be Continued Until Capacity Deferral Balance is Collected as Ordered by the PUCO ($ per MWh) | $ / MWD | 4 | ||
Annual Retail Share of Fixed Fuel Costs | $ 90 | ||
Approved Return on Equity | 10.20% | ||
Return On Equity Proposed In PPA Stipulation Agreement | 10.38% | ||
Amount of Potential Customer Credits to be Included in the PPA Rider Over the Final Four Years as Proposed in Stipulation Agreement | $ 100 | ||
Solar Energy Projects to be Developed and Implemented by 2021 as Proposed in Stipulation Agreement (in MWs) | MW | 400 | ||
Wind Energy Projects to be Developed and Implemented by 2021 as Proposed in Stipulation Agreement (in MWs) | MW | 500 | ||
Percentage of Output to be Received from Solar and Wind Projects as Proposed in Stipulation Agreement | 100.00% | ||
Maximum Ownership Percentage of Solar and Wind Projects as Proposed in Stipulation Agreement | 50.00% | ||
Temporary Customer-Specific Rate Impact Cap Through May 2018 | 5.00% | ||
Future Commitment to Support the Development of a Large Solar Farm | $ 20 | ||
Ohio Electric Security Plan Filing [Member] | June 2020 through May 2021 [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Amount of Potential Customer Credits to be Included in the PPA Rider Over the Final Four Years as Proposed in Stipulation Agreement | 10 | ||
Ohio Electric Security Plan Filing [Member] | June 2021 through May 2022 [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Amount of Potential Customer Credits to be Included in the PPA Rider Over the Final Four Years as Proposed in Stipulation Agreement | 20 | ||
Ohio Electric Security Plan Filing [Member] | June 2022 through May 2023 [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Amount of Potential Customer Credits to be Included in the PPA Rider Over the Final Four Years as Proposed in Stipulation Agreement | 30 | ||
Ohio Electric Security Plan Filing [Member] | June 2023 through May 2024 [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Amount of Potential Customer Credits to be Included in the PPA Rider Over the Final Four Years as Proposed in Stipulation Agreement | $ 40 | ||
Ohio Electric Security Plan Filing [Member] | Ohio Power Co [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
PUCO-ordered Fixed Price per MW Day for Customers Who Switch During ESP Period | $ / MWD | 188.88 | ||
Reliability Pricing Model Rate per MW Day in Effect through May 2014 | $ / MWD | 34 | ||
Reliability Pricing Model Rate per MW Day in Effect from June 2014 through May 2015 | $ / MWD | 150 | ||
Retail Stability Rider through May 2014 ($ Per MWh) | $ / MWD | 3.50 | ||
Retail Stability Rider for the Period June 2014 through May 2015 ($ per MWh) | $ / MWD | 4 | ||
Amount of Retail Stability Rider Applied to the Deferred Capacity Costs ($ per MWh) | $ / MWD | 1 | ||
Retail Stability Rider Rate to be Continued Until Capacity Deferral Balance is Collected as Ordered by the PUCO ($ per MWh) | $ / MWD | 4 | ||
Annual Retail Share of Fixed Fuel Costs | $ 90 | ||
Approved Return on Equity | 10.20% | ||
Return On Equity Proposed In PPA Stipulation Agreement | 10.38% | ||
Amount of Potential Customer Credits to be Included in the PPA Rider Over the Final Four Years as Proposed in Stipulation Agreement | $ 100 | ||
Solar Energy Projects to be Developed and Implemented by 2021 as Proposed in Stipulation Agreement (in MWs) | MW | 400 | ||
Wind Energy Projects to be Developed and Implemented by 2021 as Proposed in Stipulation Agreement (in MWs) | MW | 500 | ||
Percentage of Output to be Received from Solar and Wind Projects as Proposed in Stipulation Agreement | 100.00% | ||
Maximum Ownership Percentage of Solar and Wind Projects as Proposed in Stipulation Agreement | 50.00% | ||
Temporary Customer-Specific Rate Impact Cap Through May 2018 | 5.00% | ||
Future Commitment to Support the Development of a Large Solar Farm | $ 20 | ||
Ohio Electric Security Plan Filing [Member] | Ohio Power Co [Member] | June 2020 through May 2021 [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Amount of Potential Customer Credits to be Included in the PPA Rider Over the Final Four Years as Proposed in Stipulation Agreement | 10 | ||
Ohio Electric Security Plan Filing [Member] | Ohio Power Co [Member] | June 2021 through May 2022 [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Amount of Potential Customer Credits to be Included in the PPA Rider Over the Final Four Years as Proposed in Stipulation Agreement | 20 | ||
Ohio Electric Security Plan Filing [Member] | Ohio Power Co [Member] | June 2022 through May 2023 [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Amount of Potential Customer Credits to be Included in the PPA Rider Over the Final Four Years as Proposed in Stipulation Agreement | 30 | ||
Ohio Electric Security Plan Filing [Member] | Ohio Power Co [Member] | June 2023 through May 2024 [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Amount of Potential Customer Credits to be Included in the PPA Rider Over the Final Four Years as Proposed in Stipulation Agreement | 40 | ||
Ohio Fuel Adjustment Clause Audit - 2009 [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
2008 Coal Contract Settlement Proceeds to be Applied to Deferred Fuel Balance as Originally Ordered by the PUCO | 65 | ||
Net Favorable Fuel Adjustment Recorded in 2012 Based on Fuel Adjustment Clause Audit Rehearing | 30 | ||
Ohio Fuel Adjustment Clause Audit - 2009 [Member] | Ohio Power Co [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
2008 Coal Contract Settlement Proceeds to be Applied to Deferred Fuel Balance as Originally Ordered by the PUCO | 65 | ||
Net Favorable Fuel Adjustment Recorded in 2012 Based on Fuel Adjustment Clause Audit Rehearing | 30 | ||
Special Rate Mechanism For Ormet [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Deferred Fuel Adjustment Clause Related to Ormet Interim Arrangement as of September 2009 | 64 | ||
Unrecognized Equity Carrying Costs Related to Ormet Interim Arrangement as of September 2009 | 2 | ||
Special Rate Mechanism For Ormet [Member] | Ohio Power Co [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Deferred Fuel Adjustment Clause Related to Ormet Interim Arrangement as of September 2009 | 64 | ||
Unrecognized Equity Carrying Costs Related to Ormet Interim Arrangement as of September 2009 | 2 | ||
Virginia Regulatory Asset Proceeding - 2015 [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Amounts Of Regulatory Assets Under Review In Separate Proceeding | 8 | ||
Virginia Regulatory Asset Proceeding - 2015 [Member] | Appalachian Power Co [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Amounts Of Regulatory Assets Under Review In Separate Proceeding | 8 | ||
West Virginia Deferred Base Rate Increase [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Amount Of Annual Delayed Customer Billing To Residential Customers | 25 | ||
Amount Of Recovery Requested Related To Delayed Billing Including Carrying Charges | 29 | ||
West Virginia Deferred Base Rate Increase [Member] | Appalachian Power Co [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Amount Of Annual Delayed Customer Billing To Residential Customers | 22 | ||
Amount Of Recovery Requested Related To Delayed Billing Including Carrying Charges | 26 | ||
West Virginia Expanded Net Energy Charge (ENEC) - 2016 [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Requested Annual Increase | 108 | ||
West Virginia Expanded Net Energy Charge (ENEC) - 2016 [Member] | Appalachian Power Co [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Requested Annual Increase | $ 86 | ||
Deferred Capacity Costs [Member] | Ohio Electric Security Plan Filing [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Deferred Capacity Costs Recovery Period as Ordered by PUCO (in months) | 32 months | ||
Capacity Deferral Balance As Of May 2015 Subject To Audit By PUCO | $ 444 | ||
Regulatory Assets, Noncurrent | 320 | ||
Amount of Deferred Capacity Costs Collected from Customers | $ 266 | ||
Deferred Capacity Costs [Member] | Ohio Electric Security Plan Filing [Member] | Ohio Power Co [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Deferred Capacity Costs Recovery Period as Ordered by PUCO (in months) | 32 months | ||
Capacity Deferral Balance As Of May 2015 Subject To Audit By PUCO | $ 444 | ||
Regulatory Assets, Noncurrent | 320 | ||
Amount of Deferred Capacity Costs Collected from Customers | $ 266 | ||
Subsequent Event [Member] | Ohio Electric Security Plan Filing [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Energy Credit Offset Applied Against the Capacity Deferral Threshold (per MW day) | $ / MWD | 147.41 | ||
Overstatement of Energy Credit Used in the Determination of the Capacity Deferral Threshold (per MW day) | $ / MWD | 100 | ||
Significantly Excessive Earnings Test Threshold Previously Established for Ohio Power | 12.00% | ||
Significantly Excessive Earnings Test Threshold Remanded Back to the PUCO | 12.00% | ||
Gridsmart Investment as Proposed in Stipulation Agreement | $ 20 | ||
Subsequent Event [Member] | Ohio Electric Security Plan Filing [Member] | Ohio Power Co [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Energy Credit Offset Applied Against the Capacity Deferral Threshold (per MW day) | $ / MWD | 147.41 | ||
Overstatement of Energy Credit Used in the Determination of the Capacity Deferral Threshold (per MW day) | $ / MWD | 100 | ||
Significantly Excessive Earnings Test Threshold Previously Established for Ohio Power | 12.00% | ||
Significantly Excessive Earnings Test Threshold Remanded Back to the PUCO | 12.00% | ||
Gridsmart Investment as Proposed in Stipulation Agreement | $ 20 |
Rate Matters - West Companies (
Rate Matters - West Companies (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Apr. 28, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | |
Public Utilities, General Disclosures [Line Items] | |||
Construction Work in Progress | $ 3,806.3 | $ 3,903.9 | |
Public Service Co Of Oklahoma [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Construction Work in Progress | 145.7 | 315.3 | |
Southwestern Electric Power Co [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Construction Work in Progress | 562.8 | $ 751.3 | |
Welsh Plant, Unit 2 [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Property, Plant and Equipment, Net | 84 | ||
Welsh Plant, Unit 2 [Member] | Southwestern Electric Power Co [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Property, Plant and Equipment, Net | $ 84 | ||
ETT Interim Transmission Rates [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Parent Ownership Interest In ETT | 50.00% | ||
AEP Share Of ETT Cumulative Revenues Subject To Review | $ 468 | ||
Louisiana 2012 Formula Rate Filing [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Louisiana Jurisdictional Share of the Turk Plant | 29.00% | ||
Net Increase in Louisiana Total Rates per the Settlement Agreement | $ 2 | ||
Base Rate Increase per the Settlement Agreement | 85 | ||
Fuel Rate Decrease per the Settlement Agreement | $ 83 | ||
Return on Common Equity per the Settlement Agreement | 10.00% | ||
Reduction To Requested Revenue Increase As Approved In Stipulation Agreement | $ 3 | ||
Louisiana 2012 Formula Rate Filing [Member] | Southwestern Electric Power Co [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Louisiana Jurisdictional Share of the Turk Plant | 29.00% | ||
Net Increase in Louisiana Total Rates per the Settlement Agreement | $ 2 | ||
Base Rate Increase per the Settlement Agreement | 85 | ||
Fuel Rate Decrease per the Settlement Agreement | $ 83 | ||
Return on Common Equity per the Settlement Agreement | 10.00% | ||
Reduction To Requested Revenue Increase As Approved In Stipulation Agreement | $ 3 | ||
Louisiana 2014 Formula Rate Filing [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Requested Annual Increase | 5 | ||
Additional Requested Annual Increase | 15 | ||
Requested Total Annual Increase | 20 | ||
Amount Of Interim Rates Implemented In January 2015 As Approved In Partial Settlement Agreement | 15 | ||
Louisiana 2014 Formula Rate Filing [Member] | Southwestern Electric Power Co [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Requested Annual Increase | 5 | ||
Additional Requested Annual Increase | 15 | ||
Requested Total Annual Increase | 20 | ||
Amount Of Interim Rates Implemented In January 2015 As Approved In Partial Settlement Agreement | 15 | ||
Louisiana 2015 Formula Rate Filing [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Requested Annual Increase | 14 | ||
Louisiana 2015 Formula Rate Filing [Member] | Southwestern Electric Power Co [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Requested Annual Increase | 14 | ||
Oklahoma Base Rate Case - 2015 [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Requested Annual Increase | 137 | ||
Requested Base Rate Increase | 89 | ||
Amount Of Increased Depreciation Expense Requested | 48 | ||
Amount Of Increase Related To Environmental Controls | 44 | ||
Amount Of Requested Increase Related To Environmental Consumable Costs In Fuel Adjustment Clause | $ 4 | ||
Requested Return on Equity | 10.50% | ||
Future Incremental Purchased Capacity And Energy Costs Related To Environmental Projects | $ 35 | ||
Interim Annual Base Rate Increase | 75 | ||
Oklahoma Base Rate Case - 2015 [Member] | Public Service Co Of Oklahoma [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Requested Annual Increase | 137 | ||
Requested Base Rate Increase | 89 | ||
Amount Of Increased Depreciation Expense Requested | 48 | ||
Amount Of Increase Related To Environmental Controls | 44 | ||
Amount Of Requested Increase Related To Environmental Consumable Costs In Fuel Adjustment Clause | $ 4 | ||
Requested Return on Equity | 10.50% | ||
Future Incremental Purchased Capacity And Energy Costs Related To Environmental Projects | $ 35 | ||
Interim Annual Base Rate Increase | 75 | ||
Oklahoma Base Rate Case - 2015 [Member] | Northeastern Plant, Unit 4 [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Property, Plant and Equipment, Net | 94 | ||
Oklahoma Base Rate Case - 2015 [Member] | Northeastern Plant, Unit 4 [Member] | Public Service Co Of Oklahoma [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Property, Plant and Equipment, Net | 94 | ||
Texas Base Rate Case [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
2013 Reversal of Previously Recorded Regulatory Disallowances | 114 | ||
Resulting Approved Base Rate Increase | 52 | ||
Texas Base Rate Case [Member] | Southwestern Electric Power Co [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
2013 Reversal of Previously Recorded Regulatory Disallowances | 114 | ||
Resulting Approved Base Rate Increase | 52 | ||
Welsh Plant, Units 1 and 3 - Environmental Projects [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Projected Capital Costs | 900 | ||
Construction Work in Progress | 372 | ||
Remaining Contractual Construction Obligations | 28 | ||
Amount of Recovery Requested Related to Arkansas Retail Jurisdictional Share of Environmental Costs | 69 | ||
Welsh Plant, Units 1 and 3 - Environmental Projects [Member] | Southwestern Electric Power Co [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Projected Capital Costs | 900 | ||
Construction Work in Progress | 372 | ||
Remaining Contractual Construction Obligations | 28 | ||
Amount of Recovery Requested Related to Arkansas Retail Jurisdictional Share of Environmental Costs | 69 | ||
Welsh Plant, Units 1 and 3 - Environmental Projects [Member] | Welsh Plant, Units 1 and 3 [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Property, Plant and Equipment, Net | 606 | ||
Welsh Plant, Units 1 and 3 - Environmental Projects [Member] | Welsh Plant, Units 1 and 3 [Member] | Southwestern Electric Power Co [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Property, Plant and Equipment, Net | 606 | ||
Minimum [Member] | Oklahoma Base Rate Case - 2015 [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Intervenor Recommended Increase to Annual Revenue and/or Rider | $ 10 | ||
Intervenor Recommended Return on Common Equity | 8.75% | ||
Intervenor Recommended Increase to Depreciation Expense | $ 23 | ||
Minimum [Member] | Oklahoma Base Rate Case - 2015 [Member] | Public Service Co Of Oklahoma [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Intervenor Recommended Increase to Annual Revenue and/or Rider | $ 10 | ||
Intervenor Recommended Return on Common Equity | 8.75% | ||
Intervenor Recommended Increase to Depreciation Expense | $ 23 | ||
Maximum [Member] | Oklahoma Base Rate Case - 2015 [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Intervenor Recommended Increase to Annual Revenue and/or Rider | $ 31 | ||
Intervenor Recommended Return on Common Equity | 9.30% | ||
Intervenor Recommended Increase to Depreciation Expense | $ 46 | ||
Maximum [Member] | Oklahoma Base Rate Case - 2015 [Member] | Public Service Co Of Oklahoma [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Intervenor Recommended Increase to Annual Revenue and/or Rider | $ 31 | ||
Intervenor Recommended Return on Common Equity | 9.30% | ||
Intervenor Recommended Increase to Depreciation Expense | $ 46 | ||
Subsequent Event [Member] | TCC Distribution Cost Recovery Factor [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Requested Revenue Requirement | $ 54 | ||
Subsequent Event [Member] | TNC Distribution Cost Recovery Factor [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Requested Revenue Requirement | $ 16 | ||
Mercury and Air Toxic Standards [Member] | Welsh Plant, Units 1 and 3 - Environmental Projects [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Projected Capital Costs | 400 | ||
Mercury and Air Toxic Standards [Member] | Welsh Plant, Units 1 and 3 - Environmental Projects [Member] | Southwestern Electric Power Co [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Projected Capital Costs | 400 | ||
Environmental Controls Projects [Member] | Oklahoma Base Rate Case - 2015 [Member] | Northeastern Plant, Unit 3 and Comanche Plant [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Projected Capital Costs | 219 | ||
Construction Work in Progress | 208 | ||
Environmental Controls Projects [Member] | Oklahoma Base Rate Case - 2015 [Member] | Northeastern Plant, Unit 3 and Comanche Plant [Member] | Public Service Co Of Oklahoma [Member] | |||
Public Utilities, General Disclosures [Line Items] | |||
Projected Capital Costs | 219 | ||
Construction Work in Progress | $ 208 |
Commitments, Guarantees and C43
Commitments, Guarantees and Contingencies (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Letters of Credit [Member] | |
Maximum Future Payments for Letters of Credit Under Uncommitted Facilities [Abstract] | |
Maximum Future Payments for Letters of Credit Issued Under the Uncommitted Facility | $ 190.2 |
Pollution Control Bonds Supported by Bilateral Letters of Credit [Abstract] | |
Variable Rate PCBs Supported | 351.4 |
Bilateral Letters of Credit | 355.4 |
Commitments, Guarantees and Contingencies (Textuals) [Abstract] | |
Revolving Credit Facilities | 3,500 |
Letters of Credit Limit | 1,200 |
Maximum Future Payments for Letters of Credit | 2 |
Uncommitted Facility | 225 |
Guarantees of Third Party Obligations [Member] | |
Commitments, Guarantees and Contingencies (Textuals) [Abstract] | |
Guarantees of Mine Reclamation, Amount | 115 |
Estimated Final Cost Mine Reclamation | 58 |
Total Amount Collected through a Rider for Final Mine Closure and Reclamation Costs | 67 |
Amount Collected through a Rider for Final Mine Closure - Other Liabilities Noncurrent | 15 |
Amount Collected through a Rider for Final Mine Closure - ARO Noncurrent | 52 |
Master Lease Agreements [Member] | |
Maximum Potential Loss on Master Lease Agreements [Abstract] | |
Max Potential Loss on Master Lease Agreements | 33.6 |
Appalachian Power Co [Member] | Letters of Credit [Member] | |
Pollution Control Bonds Supported by Bilateral Letters of Credit [Abstract] | |
Variable Rate PCBs Supported | 104.4 |
Bilateral Letters of Credit | 105.6 |
Appalachian Power Co [Member] | Master Lease Agreements [Member] | |
Maximum Potential Loss on Master Lease Agreements [Abstract] | |
Max Potential Loss on Master Lease Agreements | 4.9 |
Indiana Michigan Power Co [Member] | Letters of Credit [Member] | |
Pollution Control Bonds Supported by Bilateral Letters of Credit [Abstract] | |
Variable Rate PCBs Supported | 77 |
Bilateral Letters of Credit | 77.9 |
Indiana Michigan Power Co [Member] | Master Lease Agreements [Member] | |
Maximum Potential Loss on Master Lease Agreements [Abstract] | |
Max Potential Loss on Master Lease Agreements | 3 |
Ohio Power Co [Member] | Letters of Credit [Member] | |
Maximum Future Payments for Letters of Credit Under Uncommitted Facilities [Abstract] | |
Maximum Future Payments for Letters of Credit Issued Under the Uncommitted Facility | 4.2 |
Ohio Power Co [Member] | Master Lease Agreements [Member] | |
Maximum Potential Loss on Master Lease Agreements [Abstract] | |
Max Potential Loss on Master Lease Agreements | 5.3 |
Public Service Co Of Oklahoma [Member] | Master Lease Agreements [Member] | |
Maximum Potential Loss on Master Lease Agreements [Abstract] | |
Max Potential Loss on Master Lease Agreements | 2.8 |
Southwestern Electric Power Co [Member] | Guarantees of Third Party Obligations [Member] | |
Commitments, Guarantees and Contingencies (Textuals) [Abstract] | |
Guarantees of Mine Reclamation, Amount | 115 |
Estimated Final Cost Mine Reclamation | 58 |
Total Amount Collected through a Rider for Final Mine Closure and Reclamation Costs | 67 |
Amount Collected through a Rider for Final Mine Closure - Other Liabilities Noncurrent | 15 |
Amount Collected through a Rider for Final Mine Closure - ARO Noncurrent | 52 |
Southwestern Electric Power Co [Member] | Master Lease Agreements [Member] | |
Maximum Potential Loss on Master Lease Agreements [Abstract] | |
Max Potential Loss on Master Lease Agreements | 3.1 |
Superfund and State Remediation [Member] | |
Commitments, Guarantees and Contingencies (Textuals) [Abstract] | |
Expense Recorded Due to Remediation Work Remaining Provision | 8 |
Superfund and State Remediation [Member] | Indiana Michigan Power Co [Member] | |
Commitments, Guarantees and Contingencies (Textuals) [Abstract] | |
Expense Recorded Due to Remediation Work Remaining Provision | 8 |
Railcar Lease [Member] | Indiana Michigan Power Co [Member] | |
Commitments, Guarantees and Contingencies (Textuals) [Abstract] | |
Future Minimum Lease Obligation for Remaining Railcars | $ 9 |
Guaranteed Sales Proceeds Percentage of Fair Value to Lessor Current Term | 83.00% |
Guaranteed Sales Proceeds Percentage of Fair Value to Lessor End of Max Lease Term | 77.00% |
Maximum Potential Loss on Guarantee of Return-and-Sale Option | $ 9 |
Railcar Lease [Member] | Southwestern Electric Power Co [Member] | |
Commitments, Guarantees and Contingencies (Textuals) [Abstract] | |
Future Minimum Lease Obligation for Remaining Railcars | $ 11 |
Guaranteed Sales Proceeds Percentage of Fair Value to Lessor Current Term | 83.00% |
Guaranteed Sales Proceeds Percentage of Fair Value to Lessor End of Max Lease Term | 77.00% |
Maximum Potential Loss on Guarantee of Return-and-Sale Option | $ 10 |
Boat and Barge Leases [Member] | |
Commitments, Guarantees and Contingencies (Textuals) [Abstract] | |
Maximum Potential Loss on Guarantee of Return-and-Sale Option | 15 |
Maximum Potential Lease Payments, AEPRO Barge and Boat Leases | 93 |
Maximum [Member] | Wage and Hours Lawsuit [Member] | |
Commitments, Guarantees and Contingencies (Textuals) [Abstract] | |
Range of Possible Loss | 30 |
Maximum [Member] | Wage and Hours Lawsuit [Member] | Public Service Co Of Oklahoma [Member] | |
Commitments, Guarantees and Contingencies (Textuals) [Abstract] | |
Range of Possible Loss | $ 30 |
Dispositions (Details)
Dispositions (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Total Income on Discontinued Operations as Presented on the Statements of Income | $ 0 | $ 10.5 |
Corporate and Other [Member] | ||
Other Revenues | 127.7 | |
Other Operation Expense | 85 | |
Maintenance Expense | 8.3 | |
Depreciation and Amortization Expense | 9.1 | |
Taxes Other Than Income Taxes | 4 | |
Total Expense | 106.4 | |
Other Expense | (4.4) | |
Pretax Income of Discontinued Operations | 16.9 | |
Income Tax Expense | 6.3 | |
Equity Earnings of Unconsolidated Subsidiaries | (0.1) | |
Total Income on Discontinued Operations as Presented on the Statements of Income | $ 10.5 |
Benefit Plans (Details)
Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Pension Plans [Member] | ||
Components of Net Periodic Benefit Cost | ||
Service Cost | $ 21.4 | $ 23.3 |
Interest Cost | 52.9 | 51.3 |
Expected Return on Plan Assets | (70.1) | (68.7) |
Amortization of Prior Service Cost (Credit) | 0.6 | 0.6 |
Amortization of Net Actuarial Loss | 21 | 26.8 |
Net Periodic Benefit Cost (Credit) | 25.8 | 33.3 |
Pension Plans [Member] | Appalachian Power Co [Member] | ||
Components of Net Periodic Benefit Cost | ||
Service Cost | 2 | 2.2 |
Interest Cost | 6.8 | 6.7 |
Expected Return on Plan Assets | (8.8) | (8.8) |
Amortization of Prior Service Cost (Credit) | 0 | 0 |
Amortization of Net Actuarial Loss | 2.7 | 3.5 |
Net Periodic Benefit Cost (Credit) | 2.7 | 3.6 |
Pension Plans [Member] | Indiana Michigan Power Co [Member] | ||
Components of Net Periodic Benefit Cost | ||
Service Cost | 3 | 3.2 |
Interest Cost | 6.3 | 6.1 |
Expected Return on Plan Assets | (8.4) | (8.1) |
Amortization of Prior Service Cost (Credit) | 0.1 | 0 |
Amortization of Net Actuarial Loss | 2.5 | 3.2 |
Net Periodic Benefit Cost (Credit) | 3.5 | 4.4 |
Pension Plans [Member] | Ohio Power Co [Member] | ||
Components of Net Periodic Benefit Cost | ||
Service Cost | 1.6 | 1.7 |
Interest Cost | 5.2 | 5.1 |
Expected Return on Plan Assets | (6.9) | (6.9) |
Amortization of Prior Service Cost (Credit) | 0 | 0 |
Amortization of Net Actuarial Loss | 2 | 2.6 |
Net Periodic Benefit Cost (Credit) | 1.9 | 2.5 |
Pension Plans [Member] | Public Service Co Of Oklahoma [Member] | ||
Components of Net Periodic Benefit Cost | ||
Service Cost | 1.5 | 1.6 |
Interest Cost | 2.8 | 2.7 |
Expected Return on Plan Assets | (3.9) | (3.8) |
Amortization of Prior Service Cost (Credit) | 0.1 | 0.1 |
Amortization of Net Actuarial Loss | 1.1 | 1.4 |
Net Periodic Benefit Cost (Credit) | 1.6 | 2 |
Pension Plans [Member] | Southwestern Electric Power Co [Member] | ||
Components of Net Periodic Benefit Cost | ||
Service Cost | 2 | 2.1 |
Interest Cost | 3.1 | 2.9 |
Expected Return on Plan Assets | (4.1) | (4) |
Amortization of Prior Service Cost (Credit) | 0.1 | 0.1 |
Amortization of Net Actuarial Loss | 1.2 | 1.5 |
Net Periodic Benefit Cost (Credit) | 2.3 | 2.6 |
Other Postretirement Benefit Plans [Member] | ||
Components of Net Periodic Benefit Cost | ||
Service Cost | 2.6 | 3.1 |
Interest Cost | 15.2 | 14.2 |
Expected Return on Plan Assets | (26.8) | (27.8) |
Amortization of Prior Service Cost (Credit) | (17.3) | (17.3) |
Amortization of Net Actuarial Loss | 7.9 | 4.7 |
Net Periodic Benefit Cost (Credit) | (18.4) | (23.1) |
Other Postretirement Benefit Plans [Member] | Appalachian Power Co [Member] | ||
Components of Net Periodic Benefit Cost | ||
Service Cost | 0.2 | 0.3 |
Interest Cost | 2.7 | 2.6 |
Expected Return on Plan Assets | (4.3) | (4.6) |
Amortization of Prior Service Cost (Credit) | (2.5) | (2.5) |
Amortization of Net Actuarial Loss | 1.4 | 0.9 |
Net Periodic Benefit Cost (Credit) | (2.5) | (3.3) |
Other Postretirement Benefit Plans [Member] | Indiana Michigan Power Co [Member] | ||
Components of Net Periodic Benefit Cost | ||
Service Cost | 0.4 | 0.4 |
Interest Cost | 1.8 | 1.6 |
Expected Return on Plan Assets | (3.2) | (3.3) |
Amortization of Prior Service Cost (Credit) | (2.4) | (2.4) |
Amortization of Net Actuarial Loss | 0.9 | 0.5 |
Net Periodic Benefit Cost (Credit) | (2.5) | (3.2) |
Other Postretirement Benefit Plans [Member] | Ohio Power Co [Member] | ||
Components of Net Periodic Benefit Cost | ||
Service Cost | 0.2 | 0.2 |
Interest Cost | 1.7 | 1.6 |
Expected Return on Plan Assets | (3.2) | (3.4) |
Amortization of Prior Service Cost (Credit) | (1.7) | (1.7) |
Amortization of Net Actuarial Loss | 0.9 | 0.5 |
Net Periodic Benefit Cost (Credit) | (2.1) | (2.8) |
Other Postretirement Benefit Plans [Member] | Public Service Co Of Oklahoma [Member] | ||
Components of Net Periodic Benefit Cost | ||
Service Cost | 0.2 | 0.2 |
Interest Cost | 0.8 | 0.8 |
Expected Return on Plan Assets | (1.5) | (1.6) |
Amortization of Prior Service Cost (Credit) | (1.1) | (1.1) |
Amortization of Net Actuarial Loss | 0.4 | 0.2 |
Net Periodic Benefit Cost (Credit) | (1.2) | (1.5) |
Other Postretirement Benefit Plans [Member] | Southwestern Electric Power Co [Member] | ||
Components of Net Periodic Benefit Cost | ||
Service Cost | 0.2 | 0.2 |
Interest Cost | 0.9 | 0.8 |
Expected Return on Plan Assets | (1.7) | (1.7) |
Amortization of Prior Service Cost (Credit) | (1.3) | (1.3) |
Amortization of Net Actuarial Loss | 0.5 | 0.3 |
Net Periodic Benefit Cost (Credit) | $ (1.4) | $ (1.7) |
Business Segments (Details)
Business Segments (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | ||
Reportable Segment Information | ||||
Revenues | $ 4,044.9 | $ 4,580.4 | ||
Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest | 503.1 | 620.2 | ||
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | 0 | 10.5 | ||
NET INCOME (LOSS) | 503.1 | 630.7 | ||
Balance Sheet Information | ||||
Total Property, Plant and Equipment | 66,430.2 | $ 65,481.4 | ||
Accumulated Depreciation and Amortization | 19,597.3 | 19,348.2 | ||
TOTAL PROPERTY, PLANT AND EQUIPMENT - NET | 46,832.9 | 46,133.2 | ||
Total Assets | 62,486.5 | 61,683.1 | ||
Long-term Debt Due Within One Year - Affiliated | 0 | 0 | ||
Long-term Debt Due Within One Year | 2,033.3 | 1,831.8 | ||
Long-term Debt - Affiliated | 0 | 0 | ||
Long-term Debt | 17,749.3 | 17,740.9 | ||
Total Long-term Debt Outstanding | 19,782.6 | 19,572.7 | ||
Vertically Integrated Utilities [Member] | ||||
Reportable Segment Information | ||||
Sales Revenue, Net | 2,218.1 | 2,487.4 | ||
Revenues | 2,245.6 | 2,505.1 | ||
Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest | 278.7 | 300.3 | ||
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | 0 | 0 | ||
NET INCOME (LOSS) | 278.7 | 300.3 | ||
Balance Sheet Information | ||||
Total Property, Plant and Equipment | 40,599.7 | 40,130.3 | ||
Accumulated Depreciation and Amortization | 12,485.3 | 12,335 | ||
TOTAL PROPERTY, PLANT AND EQUIPMENT - NET | 28,114.4 | 27,795.3 | ||
Total Assets | 36,197 | 35,792.3 | ||
Long-term Debt Due Within One Year - Affiliated | 0 | 0 | ||
Long-term Debt Due Within One Year | 1,174.3 | 935.4 | ||
Long-term Debt - Affiliated | 20 | 20 | ||
Long-term Debt | 9,948.1 | 9,833 | ||
Total Long-term Debt Outstanding | 11,142.4 | 10,788.4 | ||
Transmission And Distribution Companies [Member] | ||||
Reportable Segment Information | ||||
Sales Revenue, Net | 1,077.3 | 1,206.3 | ||
Revenues | 1,096.8 | 1,270.1 | ||
Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest | 108 | 97.2 | ||
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | 0 | 0 | ||
NET INCOME (LOSS) | 108 | 97.2 | ||
Balance Sheet Information | ||||
Total Property, Plant and Equipment | 14,029.4 | 13,840.5 | ||
Accumulated Depreciation and Amortization | 3,573.5 | 3,529.2 | ||
TOTAL PROPERTY, PLANT AND EQUIPMENT - NET | 10,455.9 | 10,311.3 | ||
Total Assets | 14,341.3 | 14,640.2 | ||
Long-term Debt Due Within One Year - Affiliated | 0 | 0 | ||
Long-term Debt Due Within One Year | 786.3 | 824.7 | ||
Long-term Debt - Affiliated | 0 | 0 | ||
Long-term Debt | 4,665.6 | 4,776.8 | ||
Total Long-term Debt Outstanding | 5,451.9 | 5,601.5 | ||
AEP Transmission Holdco [Member] | ||||
Reportable Segment Information | ||||
Sales Revenue, Net | 29.3 | 21.7 | ||
Revenues | 88.6 | 57.9 | ||
Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest | 44.7 | 36.3 | ||
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | 0 | 0 | ||
NET INCOME (LOSS) | 44.7 | 36.3 | ||
Balance Sheet Information | ||||
Total Property, Plant and Equipment | 4,230.5 | 3,977.6 | ||
Accumulated Depreciation and Amortization | 63.9 | 52.3 | ||
TOTAL PROPERTY, PLANT AND EQUIPMENT - NET | 4,166.6 | 3,925.3 | ||
Total Assets | 5,152.7 | 5,012.1 | ||
Long-term Debt Due Within One Year - Affiliated | 0 | 0 | ||
Long-term Debt Due Within One Year | 0 | 0 | ||
Long-term Debt - Affiliated | 0 | 0 | ||
Long-term Debt | 1,654.1 | 1,648.4 | ||
Total Long-term Debt Outstanding | 1,654.1 | 1,648.4 | ||
Generation And Marketing [Member] | ||||
Reportable Segment Information | ||||
Sales Revenue, Net | 713.9 | 859.2 | ||
Revenues | 748 | 1,170.5 | ||
Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest | 70.7 | 187.4 | ||
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | 0 | 0 | ||
NET INCOME (LOSS) | 70.7 | 187.4 | ||
Balance Sheet Information | ||||
Total Property, Plant and Equipment | 7,510.9 | 7,461.3 | ||
Accumulated Depreciation and Amortization | 3,409.8 | 3,367 | ||
TOTAL PROPERTY, PLANT AND EQUIPMENT - NET | 4,101.1 | 4,094.3 | ||
Total Assets | 5,400.2 | 5,414.5 | ||
Long-term Debt Due Within One Year - Affiliated | 0 | 0 | ||
Long-term Debt Due Within One Year | 71.7 | 71.6 | ||
Long-term Debt - Affiliated | 32.2 | 32.2 | ||
Long-term Debt | 635.3 | 639.5 | ||
Total Long-term Debt Outstanding | 739.2 | 743.3 | ||
All Other [Member] | ||||
Reportable Segment Information | ||||
Sales Revenue, Net | [1] | 6.3 | 5.8 | |
Revenues | [1] | 24.4 | 26.2 | |
Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest | [1] | 1 | (1) | |
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | [1] | 0 | 10.5 | |
NET INCOME (LOSS) | [1] | 1 | 9.5 | |
Balance Sheet Information | ||||
Total Property, Plant and Equipment | [1] | 357.3 | 350.9 | |
Accumulated Depreciation and Amortization | [1] | 180.8 | 176.9 | |
TOTAL PROPERTY, PLANT AND EQUIPMENT - NET | [1] | 176.5 | 174 | |
Total Assets | [1] | 21,962.1 | 21,907.4 | |
Long-term Debt Due Within One Year - Affiliated | [1] | 0 | 0 | |
Long-term Debt Due Within One Year | [1] | 1 | 0.1 | |
Long-term Debt - Affiliated | [1] | 0 | 0 | |
Long-term Debt | [1] | 846.2 | 843.2 | |
Total Long-term Debt Outstanding | [1] | 847.2 | 843.3 | |
Consolidation, Eliminations [Member] | ||||
Reportable Segment Information | ||||
Sales Revenue, Net | 0 | 0 | ||
Revenues | (158.5) | (449.4) | ||
Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest | 0 | 0 | ||
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | 0 | 0 | ||
NET INCOME (LOSS) | 0 | 0 | ||
Balance Sheet Information | ||||
Total Property, Plant and Equipment | [2] | (297.6) | (279.2) | |
Accumulated Depreciation and Amortization | [2] | (116) | (112.2) | |
TOTAL PROPERTY, PLANT AND EQUIPMENT - NET | [2] | (181.6) | (167) | |
Total Assets | [2],[3] | (20,566.8) | (21,083.4) | |
Long-term Debt Due Within One Year - Affiliated | 0 | 0 | ||
Long-term Debt Due Within One Year | 0 | 0 | ||
Long-term Debt - Affiliated | (52.2) | (52.2) | ||
Long-term Debt | 0 | 0 | ||
Total Long-term Debt Outstanding | (52.2) | $ (52.2) | ||
Segment Reconciling Items [Member] | Vertically Integrated Utilities [Member] | ||||
Reportable Segment Information | ||||
Sales Revenue, Net | 27.5 | 17.7 | ||
Segment Reconciling Items [Member] | Transmission And Distribution Companies [Member] | ||||
Reportable Segment Information | ||||
Sales Revenue, Net | 19.5 | 63.8 | ||
Segment Reconciling Items [Member] | AEP Transmission Holdco [Member] | ||||
Reportable Segment Information | ||||
Sales Revenue, Net | 59.3 | 36.2 | ||
Segment Reconciling Items [Member] | Generation And Marketing [Member] | ||||
Reportable Segment Information | ||||
Sales Revenue, Net | 34.1 | 311.3 | ||
Segment Reconciling Items [Member] | All Other [Member] | ||||
Reportable Segment Information | ||||
Sales Revenue, Net | [1] | 18.1 | 20.4 | |
Segment Reconciling Items [Member] | Consolidation, Eliminations [Member] | ||||
Reportable Segment Information | ||||
Sales Revenue, Net | $ (158.5) | $ (449.4) | ||
[1] | Corporate and Other primarily includes the purchasing of receivables from certain AEP utility subsidiaries. This segment also includes Parent’s guarantee revenue received from affiliates, investment income, interest income, interest expense and discontinued operations of AEPRO and other nonallocated costs. | |||
[2] | Includes eliminations due to an intercompany capital lease. | |||
[3] | Reconciling Adjustments for Total Assets primarily include the elimination of intercompany advances to affiliates and intercompany accounts receivable along with the elimination of AEP’s investments in subsidiary companies. |
Derivatives and Hedging (Detail
Derivatives and Hedging (Details) gal in Millions, T in Millions, MWh in Millions, MMBTU in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2016USD ($)MWhMMBTUTgal | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($)MWhMMBTUTgal | ||||
Cash Collateral Netting | ||||||
Cash Collateral Received Netted Against Risk Management Assets | $ 11.8 | $ 5.8 | ||||
Cash Collateral Paid Netted Against Risk Management Liabilities | 43 | 44.4 | ||||
Fair Value of Derivative Instruments | ||||||
Current Risk Management Assets | 143.8 | 134.4 | ||||
Long-term Risk Management Assets | 328.9 | 321.8 | ||||
Total Assets | 472.7 | 456.2 | ||||
Current Risk Management Liabilities | 104.3 | 87.1 | ||||
Long-term Risk Management Liabilities | 207.6 | 179.1 | ||||
Derivative Liability | 311.9 | 266.2 | ||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 19.1 | $ 54.6 | ||||
Gain (Loss) on Hedging Instruments | ||||||
Gain (Loss) on Fair Value Hedging Instruments | 3.5 | 4.5 | ||||
Gain (Loss) on Fair Value Portion of Long-term Debt | (3.5) | (4.5) | ||||
Collateral Triggering Events [Abstract] | ||||||
Amount of Collateral AEP Subsidiaries Would Have Been Required to Post Attributable to RTOs and ISOs | 23.6 | 17.5 | ||||
Amount Attributable to Other Contracts | [1] | 298.3 | 297.8 | |||
Liabilities for Contracts with Cross Default Provisions Prior to Contractual Netting Arrangements | 328.8 | 300.1 | ||||
Amount of Cash Collateral Posted | 0 | 0.8 | ||||
Additional Settlement Liability if Cross Default Provision is Triggered | $ 276.2 | 240.6 | ||||
Derivatives and Hedging (Textuals) [Abstract] | ||||||
Maximum Term for Exposure to Variability of Future Cash Flows | 141 months | |||||
Appalachian Power Co [Member] | ||||||
Cash Collateral Netting | ||||||
Cash Collateral Received Netted Against Risk Management Assets | $ 0 | 0 | ||||
Cash Collateral Paid Netted Against Risk Management Liabilities | 0.6 | 3.1 | ||||
Fair Value of Derivative Instruments | ||||||
Current Risk Management Assets | 11.2 | 14.7 | ||||
Long-term Risk Management Assets | 0.3 | 0.1 | ||||
Current Risk Management Liabilities | 10.4 | 4.8 | ||||
Long-term Risk Management Liabilities | 0.1 | 0.1 | ||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 17.5 | 3.4 | ||||
Collateral Triggering Events [Abstract] | ||||||
Amount of Collateral AEP Subsidiaries Would Have Been Required to Post Attributable to RTOs and ISOs | 2.2 | 4.9 | ||||
Amount Attributable to Other Contracts | 0.1 | 0.1 | ||||
Liabilities for Contracts with Cross Default Provisions Prior to Contractual Netting Arrangements | 3.8 | 3.7 | ||||
Amount of Cash Collateral Posted | 0 | 0 | ||||
Additional Settlement Liability if Cross Default Provision is Triggered | 3.8 | 3.7 | ||||
Indiana Michigan Power Co [Member] | ||||||
Cash Collateral Netting | ||||||
Cash Collateral Received Netted Against Risk Management Assets | 0 | 0 | ||||
Cash Collateral Paid Netted Against Risk Management Liabilities | 0.1 | 0.6 | ||||
Fair Value of Derivative Instruments | ||||||
Current Risk Management Assets | 8.4 | 10.6 | ||||
Long-term Risk Management Assets | 0.4 | 0 | ||||
Current Risk Management Liabilities | 6.4 | 6.3 | ||||
Long-term Risk Management Liabilities | 1 | 1.6 | ||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 9.7 | (1.2) | ||||
Collateral Triggering Events [Abstract] | ||||||
Amount of Collateral AEP Subsidiaries Would Have Been Required to Post Attributable to RTOs and ISOs | 1.4 | 3.3 | ||||
Amount Attributable to Other Contracts | 0 | 0.1 | ||||
Liabilities for Contracts with Cross Default Provisions Prior to Contractual Netting Arrangements | 2.6 | 2.5 | ||||
Amount of Cash Collateral Posted | 0 | 0 | ||||
Additional Settlement Liability if Cross Default Provision is Triggered | 2.6 | 2.5 | ||||
Ohio Power Co [Member] | ||||||
Cash Collateral Netting | ||||||
Cash Collateral Received Netted Against Risk Management Assets | 0 | 0 | ||||
Cash Collateral Paid Netted Against Risk Management Liabilities | 0.2 | 0.5 | ||||
Fair Value of Derivative Instruments | ||||||
Long-term Risk Management Assets | 0 | 19.2 | ||||
Current Risk Management Liabilities | 5.5 | 3.6 | ||||
Long-term Risk Management Liabilities | 5.8 | 0 | ||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | (30.3) | 4.4 | ||||
Public Service Co Of Oklahoma [Member] | ||||||
Cash Collateral Netting | ||||||
Cash Collateral Received Netted Against Risk Management Assets | 0 | 0 | ||||
Cash Collateral Paid Netted Against Risk Management Liabilities | 0.1 | 0.3 | ||||
Fair Value of Derivative Instruments | ||||||
Current Risk Management Assets | 0.7 | 0.6 | ||||
Current Risk Management Liabilities | 0.2 | 0.2 | ||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | (0.7) | (1) | ||||
Collateral Triggering Events [Abstract] | ||||||
Amount of Collateral AEP Subsidiaries Would Have Been Required to Post Attributable to RTOs and ISOs | 2.1 | 0 | ||||
Amount Attributable to Other Contracts | 3.2 | 3.2 | ||||
Southwestern Electric Power Co [Member] | ||||||
Cash Collateral Netting | ||||||
Cash Collateral Received Netted Against Risk Management Assets | 0 | 0 | ||||
Cash Collateral Paid Netted Against Risk Management Liabilities | 0.2 | 0.3 | ||||
Fair Value of Derivative Instruments | ||||||
Current Risk Management Assets | 0.8 | 0.8 | ||||
Current Risk Management Liabilities | 3.5 | 3.1 | ||||
Long-term Risk Management Liabilities | 1.8 | 2.1 | ||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 4.4 | 0.2 | ||||
Collateral Triggering Events [Abstract] | ||||||
Amount of Collateral AEP Subsidiaries Would Have Been Required to Post Attributable to RTOs and ISOs | 2.7 | 0 | ||||
Amount Attributable to Other Contracts | 0.1 | 0.1 | ||||
Risk Management Contracts [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Total Assets | [2] | 452 | [3] | 438.5 | [4] | |
Derivative Liability | [2] | 271 | [3] | 236.6 | [4] | |
Risk Management Contracts [Member] | Appalachian Power Co [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Total Assets | [2],[5] | 12.2 | 15.7 | |||
Derivative Liability | [2],[5] | 10.5 | 4.9 | |||
Risk Management Contracts [Member] | Indiana Michigan Power Co [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Total Assets | [2],[5] | 9.5 | 12.3 | |||
Derivative Liability | [2],[5] | 7.4 | 7.9 | |||
Risk Management Contracts [Member] | Ohio Power Co [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Total Assets | [2],[5] | 19.2 | ||||
Derivative Liability | [2],[5] | 11.3 | 3.6 | |||
Risk Management Contracts [Member] | Public Service Co Of Oklahoma [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Total Assets | [2],[5] | 0.7 | 0.6 | |||
Derivative Liability | [2],[5] | 0.2 | 0.2 | |||
Risk Management Contracts [Member] | Southwestern Electric Power Co [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Total Assets | [2],[5] | 0.8 | 0.8 | |||
Derivative Liability | [2],[5] | 5.3 | 5.2 | |||
Commodity [Member] | ||||||
Impact of Cash Flow Hedges on the Condensed Balance Sheet | ||||||
Hedging Assets | [6] | 19.8 | 17.6 | |||
Hedging Liabilities | [6] | 40.1 | 26.1 | |||
AOCI Gain (Loss) Net of Tax | (12.9) | (5.2) | ||||
Portion Expected to be Reclassified to Net Income During the Next Twelve Months | (1.7) | (0.4) | ||||
Derivatives and Hedging (Textuals) [Abstract] | ||||||
Cross Default Provisions Maximum Third Party Obligation Amount | 50 | 50 | ||||
Commodity [Member] | Risk Management Contracts [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Current Risk Management Assets | [7] | 425.9 | 368.8 | |||
Long-term Risk Management Assets | [7] | 390.1 | 364.8 | |||
Total Assets | [7] | 816 | 733.6 | |||
Current Risk Management Liabilities | [7] | 401.6 | 347 | |||
Long-term Risk Management Liabilities | [7] | 264.6 | 223.3 | |||
Derivative Liability | [7] | 666.2 | 570.3 | |||
Total MTM Derivative Contract Net Assets (Liabilities) | [7] | 149.8 | 163.3 | |||
Commodity [Member] | Risk Management Contracts [Member] | Appalachian Power Co [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Current Risk Management Assets | [8] | 24.1 | 25.9 | |||
Long-term Risk Management Assets | [8] | 1 | 0.3 | |||
Total Assets | [8] | 25.1 | 26.2 | |||
Current Risk Management Liabilities | [8] | 23.2 | 18.1 | |||
Long-term Risk Management Liabilities | [8] | 0.8 | 0.3 | |||
Derivative Liability | [8] | 24 | 18.4 | |||
Total MTM Derivative Contract Net Assets (Liabilities) | [8] | 1.1 | 7.8 | |||
Commodity [Member] | Risk Management Contracts [Member] | Indiana Michigan Power Co [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Current Risk Management Assets | [8] | 17.6 | 22.8 | |||
Long-term Risk Management Assets | [8] | 0.9 | 0.6 | |||
Total Assets | [8] | 18.5 | 23.4 | |||
Current Risk Management Liabilities | [8] | 15 | 17 | |||
Long-term Risk Management Liabilities | [8] | 1.5 | 2.6 | |||
Derivative Liability | [8] | 16.5 | 19.6 | |||
Total MTM Derivative Contract Net Assets (Liabilities) | [8] | 2 | 3.8 | |||
Commodity [Member] | Risk Management Contracts [Member] | Ohio Power Co [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Current Risk Management Assets | [8] | 0 | 0 | |||
Long-term Risk Management Assets | [8] | 0 | 19.2 | |||
Total Assets | [8] | 0 | 19.2 | |||
Current Risk Management Liabilities | [8] | 5.7 | 4.1 | |||
Long-term Risk Management Liabilities | [8] | 5.8 | 0 | |||
Derivative Liability | [8] | 11.5 | 4.1 | |||
Total MTM Derivative Contract Net Assets (Liabilities) | [8] | (11.5) | 15.1 | |||
Commodity [Member] | Risk Management Contracts [Member] | Public Service Co Of Oklahoma [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Current Risk Management Assets | [8] | 0.7 | 0.6 | |||
Long-term Risk Management Assets | [8] | 0 | 0 | |||
Total Assets | [8] | 0.7 | 0.6 | |||
Current Risk Management Liabilities | [8] | 0.3 | 0.5 | |||
Long-term Risk Management Liabilities | [8] | 0 | 0 | |||
Derivative Liability | [8] | 0.3 | 0.5 | |||
Total MTM Derivative Contract Net Assets (Liabilities) | [8] | 0.4 | 0.1 | |||
Commodity [Member] | Risk Management Contracts [Member] | Southwestern Electric Power Co [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Current Risk Management Assets | [8] | 0.9 | 0.8 | |||
Long-term Risk Management Assets | [8] | 0 | 0 | |||
Total Assets | [8] | 0.9 | 0.8 | |||
Current Risk Management Liabilities | [8] | 3.8 | 3.4 | |||
Long-term Risk Management Liabilities | [8] | 1.8 | 2.1 | |||
Derivative Liability | [8] | 5.6 | 5.5 | |||
Total MTM Derivative Contract Net Assets (Liabilities) | [8] | (4.7) | (4.7) | |||
Commodity [Member] | Hedging Contracts [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Current Risk Management Assets | [7] | 9.8 | 8.2 | |||
Long-term Risk Management Assets | [7] | 13.5 | 11.7 | |||
Total Assets | [7] | 23.3 | 19.9 | |||
Current Risk Management Liabilities | [7] | 12.6 | 9.1 | |||
Long-term Risk Management Liabilities | [7] | 31 | 19.3 | |||
Derivative Liability | [7] | 43.6 | 28.4 | |||
Total MTM Derivative Contract Net Assets (Liabilities) | [7] | (20.3) | (8.5) | |||
Interest Rate and Foreign Currency [Member] | ||||||
Commodity: | ||||||
Derivative, Notional Amount | 559.3 | 560.3 | ||||
Impact of Cash Flow Hedges on the Condensed Balance Sheet | ||||||
Hedging Assets | [6] | 0 | 0 | |||
Hedging Liabilities | [6] | 0.4 | 0.4 | |||
AOCI Gain (Loss) Net of Tax | (16.9) | (17.2) | ||||
Portion Expected to be Reclassified to Net Income During the Next Twelve Months | (1.4) | (1.5) | ||||
Interest Rate and Foreign Currency [Member] | Appalachian Power Co [Member] | ||||||
Commodity: | ||||||
Derivative, Notional Amount | 0 | 0 | ||||
Impact of Cash Flow Hedges on the Condensed Balance Sheet | ||||||
AOCI Gain (Loss) Net of Tax | 3.4 | 3.6 | ||||
Portion Expected to be Reclassified to Net Income During the Next Twelve Months | 0.7 | 0.7 | ||||
Interest Rate and Foreign Currency [Member] | Indiana Michigan Power Co [Member] | ||||||
Commodity: | ||||||
Derivative, Notional Amount | 0 | 0 | ||||
Impact of Cash Flow Hedges on the Condensed Balance Sheet | ||||||
AOCI Gain (Loss) Net of Tax | (12.9) | (13.3) | ||||
Portion Expected to be Reclassified to Net Income During the Next Twelve Months | (1.3) | (1.3) | ||||
Interest Rate and Foreign Currency [Member] | Ohio Power Co [Member] | ||||||
Commodity: | ||||||
Derivative, Notional Amount | 0 | 0 | ||||
Impact of Cash Flow Hedges on the Condensed Balance Sheet | ||||||
AOCI Gain (Loss) Net of Tax | 3.9 | 4.3 | ||||
Portion Expected to be Reclassified to Net Income During the Next Twelve Months | 1.1 | 1.2 | ||||
Interest Rate and Foreign Currency [Member] | Public Service Co Of Oklahoma [Member] | ||||||
Commodity: | ||||||
Derivative, Notional Amount | 0 | 0 | ||||
Impact of Cash Flow Hedges on the Condensed Balance Sheet | ||||||
AOCI Gain (Loss) Net of Tax | 4 | 4.2 | ||||
Portion Expected to be Reclassified to Net Income During the Next Twelve Months | 0.8 | 0.8 | ||||
Interest Rate and Foreign Currency [Member] | Southwestern Electric Power Co [Member] | ||||||
Commodity: | ||||||
Derivative, Notional Amount | 0 | 0 | ||||
Impact of Cash Flow Hedges on the Condensed Balance Sheet | ||||||
AOCI Gain (Loss) Net of Tax | (8.6) | (9.1) | ||||
Portion Expected to be Reclassified to Net Income During the Next Twelve Months | (1.7) | (1.7) | ||||
Interest Rate and Foreign Currency [Member] | Hedging Contracts [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Current Risk Management Assets | [7] | 0.9 | 0.1 | |||
Long-term Risk Management Assets | [7] | 0 | 0 | |||
Total Assets | [7] | 0.9 | 0.1 | |||
Current Risk Management Liabilities | [7] | 0.3 | 0.3 | |||
Long-term Risk Management Liabilities | [7] | 0.5 | 3.2 | |||
Derivative Liability | [7] | 0.8 | 3.5 | |||
Total MTM Derivative Contract Net Assets (Liabilities) | [7] | 0.1 | (3.4) | |||
Gross Amounts of Risk Management Assets/Liabilities Recognized [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Current Risk Management Assets | 436.6 | 377.1 | ||||
Long-term Risk Management Assets | 403.6 | 376.5 | ||||
Total Assets | 840.2 | 753.6 | ||||
Current Risk Management Liabilities | 414.5 | 356.4 | ||||
Long-term Risk Management Liabilities | 296.1 | 245.8 | ||||
Derivative Liability | 710.6 | 602.2 | ||||
Total MTM Derivative Contract Net Assets (Liabilities) | 129.6 | 151.4 | ||||
Gross Amounts Offset in the Statement of Financial Position [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Current Risk Management Assets | [9] | (292.8) | (242.7) | |||
Long-term Risk Management Assets | [9] | (74.7) | (54.7) | |||
Total Assets | [9] | (367.5) | (297.4) | |||
Current Risk Management Liabilities | [9] | (310.2) | (269.3) | |||
Long-term Risk Management Liabilities | [9] | (88.5) | (66.7) | |||
Derivative Liability | [9] | (398.7) | (336) | |||
Total MTM Derivative Contract Net Assets (Liabilities) | [9] | 31.2 | 38.6 | |||
Gross Amounts Offset in the Statement of Financial Position [Member] | Appalachian Power Co [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Current Risk Management Assets | [10] | (12.2) | (10.3) | |||
Long-term Risk Management Assets | [10] | (0.7) | (0.2) | |||
Total Assets | [10] | (12.9) | (10.5) | |||
Current Risk Management Liabilities | [10] | (12.8) | (13.3) | |||
Long-term Risk Management Liabilities | [10] | (0.7) | (0.2) | |||
Derivative Liability | [10] | (13.5) | (13.5) | |||
Total MTM Derivative Contract Net Assets (Liabilities) | [10] | 0.6 | 3 | |||
Gross Amounts Offset in the Statement of Financial Position [Member] | Indiana Michigan Power Co [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Current Risk Management Assets | [10] | (8.5) | (10.5) | |||
Long-term Risk Management Assets | [10] | (0.5) | (0.6) | |||
Total Assets | [10] | (9) | (11.1) | |||
Current Risk Management Liabilities | [10] | (8.6) | (10.7) | |||
Long-term Risk Management Liabilities | [10] | (0.5) | (1) | |||
Derivative Liability | [10] | (9.1) | (11.7) | |||
Total MTM Derivative Contract Net Assets (Liabilities) | [10] | 0.1 | 0.6 | |||
Gross Amounts Offset in the Statement of Financial Position [Member] | Ohio Power Co [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Current Risk Management Assets | [10] | 0 | 0 | |||
Long-term Risk Management Assets | [10] | 0 | 0 | |||
Total Assets | [10] | 0 | 0 | |||
Current Risk Management Liabilities | [10] | (0.2) | (0.5) | |||
Long-term Risk Management Liabilities | [10] | 0 | 0 | |||
Derivative Liability | [10] | (0.2) | (0.5) | |||
Total MTM Derivative Contract Net Assets (Liabilities) | [10] | 0.2 | 0.5 | |||
Gross Amounts Offset in the Statement of Financial Position [Member] | Public Service Co Of Oklahoma [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Current Risk Management Assets | [10] | 0 | 0 | |||
Long-term Risk Management Assets | [10] | 0 | 0 | |||
Total Assets | [10] | 0 | 0 | |||
Current Risk Management Liabilities | [10] | (0.1) | (0.3) | |||
Long-term Risk Management Liabilities | [10] | 0 | 0 | |||
Derivative Liability | [10] | (0.1) | (0.3) | |||
Total MTM Derivative Contract Net Assets (Liabilities) | [10] | 0.1 | 0.3 | |||
Gross Amounts Offset in the Statement of Financial Position [Member] | Southwestern Electric Power Co [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Current Risk Management Assets | [10] | (0.1) | 0 | |||
Long-term Risk Management Assets | [10] | 0 | 0 | |||
Total Assets | [10] | (0.1) | 0 | |||
Current Risk Management Liabilities | [10] | (0.3) | (0.3) | |||
Long-term Risk Management Liabilities | [10] | 0 | 0 | |||
Derivative Liability | [10] | (0.3) | (0.3) | |||
Total MTM Derivative Contract Net Assets (Liabilities) | [10] | 0.2 | 0.3 | |||
Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Current Risk Management Assets | [11] | 143.8 | 134.4 | |||
Long-term Risk Management Assets | [11] | 328.9 | 321.8 | |||
Total Assets | [11] | 472.7 | 456.2 | |||
Current Risk Management Liabilities | [11] | 104.3 | 87.1 | |||
Long-term Risk Management Liabilities | [11] | 207.6 | 179.1 | |||
Derivative Liability | [11] | 311.9 | 266.2 | |||
Total MTM Derivative Contract Net Assets (Liabilities) | [11] | 160.8 | 190 | |||
Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position [Member] | Appalachian Power Co [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Current Risk Management Assets | [12] | 11.9 | 15.6 | |||
Long-term Risk Management Assets | [12] | 0.3 | 0.1 | |||
Total Assets | [12] | 12.2 | 15.7 | |||
Current Risk Management Liabilities | [12] | 10.4 | 4.8 | |||
Long-term Risk Management Liabilities | [12] | 0.1 | 0.1 | |||
Derivative Liability | [12] | 10.5 | 4.9 | |||
Total MTM Derivative Contract Net Assets (Liabilities) | [12] | 1.7 | 10.8 | |||
Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position [Member] | Indiana Michigan Power Co [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Current Risk Management Assets | [12] | 9.1 | 12.3 | |||
Long-term Risk Management Assets | [12] | 0.4 | 0 | |||
Total Assets | [12] | 9.5 | 12.3 | |||
Current Risk Management Liabilities | [12] | 6.4 | 6.3 | |||
Long-term Risk Management Liabilities | [12] | 1 | 1.6 | |||
Derivative Liability | [12] | 7.4 | 7.9 | |||
Total MTM Derivative Contract Net Assets (Liabilities) | [12] | 2.1 | 4.4 | |||
Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position [Member] | Ohio Power Co [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Current Risk Management Assets | [12] | 0 | 0 | |||
Long-term Risk Management Assets | [12] | 0 | 19.2 | |||
Total Assets | [12] | 0 | 19.2 | |||
Current Risk Management Liabilities | [12] | 5.5 | 3.6 | |||
Long-term Risk Management Liabilities | [12] | 5.8 | 0 | |||
Derivative Liability | [12] | 11.3 | 3.6 | |||
Total MTM Derivative Contract Net Assets (Liabilities) | [12] | (11.3) | 15.6 | |||
Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position [Member] | Public Service Co Of Oklahoma [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Current Risk Management Assets | [12] | 0.7 | 0.6 | |||
Long-term Risk Management Assets | [12] | 0 | 0 | |||
Total Assets | [12] | 0.7 | 0.6 | |||
Current Risk Management Liabilities | [12] | 0.2 | 0.2 | |||
Long-term Risk Management Liabilities | [12] | 0 | 0 | |||
Derivative Liability | [12] | 0.2 | 0.2 | |||
Total MTM Derivative Contract Net Assets (Liabilities) | [12] | 0.5 | 0.4 | |||
Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position [Member] | Southwestern Electric Power Co [Member] | ||||||
Fair Value of Derivative Instruments | ||||||
Current Risk Management Assets | [12] | 0.8 | 0.8 | |||
Long-term Risk Management Assets | [12] | 0 | 0 | |||
Total Assets | [12] | 0.8 | 0.8 | |||
Current Risk Management Liabilities | [12] | 3.5 | 3.1 | |||
Long-term Risk Management Liabilities | [12] | 1.8 | 2.1 | |||
Derivative Liability | [12] | 5.3 | 5.2 | |||
Total MTM Derivative Contract Net Assets (Liabilities) | [12] | $ (4.5) | $ (4.4) | |||
Power [Member] | ||||||
Commodity: | ||||||
Derivative, Energy Notional Amount | MWh | 272.7 | 317.8 | ||||
Power [Member] | Appalachian Power Co [Member] | ||||||
Commodity: | ||||||
Derivative, Energy Notional Amount | MWh | 25 | 40.9 | ||||
Power [Member] | Indiana Michigan Power Co [Member] | ||||||
Commodity: | ||||||
Derivative, Energy Notional Amount | MWh | 13.9 | 22.8 | ||||
Power [Member] | Ohio Power Co [Member] | ||||||
Commodity: | ||||||
Derivative, Energy Notional Amount | MWh | 11.6 | 13.3 | ||||
Power [Member] | Public Service Co Of Oklahoma [Member] | ||||||
Commodity: | ||||||
Derivative, Energy Notional Amount | MWh | 4.8 | 11.3 | ||||
Power [Member] | Southwestern Electric Power Co [Member] | ||||||
Commodity: | ||||||
Derivative, Energy Notional Amount | MWh | 5.9 | 14 | ||||
Coal [Member] | ||||||
Commodity: | ||||||
Derivative, Mass Notional Amount | T | 3.4 | 4.4 | ||||
Coal [Member] | Appalachian Power Co [Member] | ||||||
Commodity: | ||||||
Derivative, Mass Notional Amount | T | 0 | 0 | ||||
Coal [Member] | Indiana Michigan Power Co [Member] | ||||||
Commodity: | ||||||
Derivative, Mass Notional Amount | T | 1.1 | 1.6 | ||||
Coal [Member] | Ohio Power Co [Member] | ||||||
Commodity: | ||||||
Derivative, Mass Notional Amount | T | 0 | 0 | ||||
Coal [Member] | Public Service Co Of Oklahoma [Member] | ||||||
Commodity: | ||||||
Derivative, Mass Notional Amount | T | 0 | 0 | ||||
Coal [Member] | Southwestern Electric Power Co [Member] | ||||||
Commodity: | ||||||
Derivative, Mass Notional Amount | T | 2.3 | 2.8 | ||||
Natural Gas [Member] | ||||||
Commodity: | ||||||
Derivative, Energy Notional Amount | MMBTU | 42.7 | 38.2 | ||||
Natural Gas [Member] | Appalachian Power Co [Member] | ||||||
Commodity: | ||||||
Derivative, Energy Notional Amount | MMBTU | 0.3 | 0.3 | ||||
Natural Gas [Member] | Indiana Michigan Power Co [Member] | ||||||
Commodity: | ||||||
Derivative, Energy Notional Amount | MMBTU | 0.2 | 0.2 | ||||
Natural Gas [Member] | Ohio Power Co [Member] | ||||||
Commodity: | ||||||
Derivative, Energy Notional Amount | MMBTU | 0 | 0 | ||||
Natural Gas [Member] | Public Service Co Of Oklahoma [Member] | ||||||
Commodity: | ||||||
Derivative, Energy Notional Amount | MMBTU | 0.2 | 0.2 | ||||
Natural Gas [Member] | Southwestern Electric Power Co [Member] | ||||||
Commodity: | ||||||
Derivative, Energy Notional Amount | MMBTU | 0.2 | 0.2 | ||||
Heating Oil and Gasoline [Member] | ||||||
Commodity: | ||||||
Derivative, Volume Notional Amount | gal | 6.9 | 7.4 | ||||
Heating Oil and Gasoline [Member] | Appalachian Power Co [Member] | ||||||
Commodity: | ||||||
Derivative, Volume Notional Amount | gal | 1.3 | 1.4 | ||||
Heating Oil and Gasoline [Member] | Indiana Michigan Power Co [Member] | ||||||
Commodity: | ||||||
Derivative, Volume Notional Amount | gal | 0.6 | 0.7 | ||||
Heating Oil and Gasoline [Member] | Ohio Power Co [Member] | ||||||
Commodity: | ||||||
Derivative, Volume Notional Amount | gal | 1.5 | 1.6 | ||||
Heating Oil and Gasoline [Member] | Public Service Co Of Oklahoma [Member] | ||||||
Commodity: | ||||||
Derivative, Volume Notional Amount | gal | 0.8 | 0.8 | ||||
Heating Oil and Gasoline [Member] | Southwestern Electric Power Co [Member] | ||||||
Commodity: | ||||||
Derivative, Volume Notional Amount | gal | 0.9 | 0.9 | ||||
Interest Rate Contract [Member] | ||||||
Commodity: | ||||||
Derivative, Notional Amount | $ 101.9 | $ 113.5 | ||||
Interest Rate Contract [Member] | Appalachian Power Co [Member] | ||||||
Commodity: | ||||||
Derivative, Notional Amount | 1.2 | 2.4 | ||||
Interest Rate Contract [Member] | Indiana Michigan Power Co [Member] | ||||||
Commodity: | ||||||
Derivative, Notional Amount | 0.8 | 1.6 | ||||
Interest Rate Contract [Member] | Ohio Power Co [Member] | ||||||
Commodity: | ||||||
Derivative, Notional Amount | 0 | 0 | ||||
Interest Rate Contract [Member] | Public Service Co Of Oklahoma [Member] | ||||||
Commodity: | ||||||
Derivative, Notional Amount | 0 | 0 | ||||
Interest Rate Contract [Member] | Southwestern Electric Power Co [Member] | ||||||
Commodity: | ||||||
Derivative, Notional Amount | 0 | $ 0 | ||||
Vertically Integrated Utilities Revenues [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0.6 | 4.4 | ||||
Vertically Integrated Utilities Revenues [Member] | Appalachian Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0 | 0 | ||||
Vertically Integrated Utilities Revenues [Member] | Indiana Michigan Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0 | 0 | ||||
Vertically Integrated Utilities Revenues [Member] | Ohio Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0 | 0 | ||||
Vertically Integrated Utilities Revenues [Member] | Public Service Co Of Oklahoma [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0 | 0 | ||||
Vertically Integrated Utilities Revenues [Member] | Southwestern Electric Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0 | 0 | ||||
Transmission and Distribution Utilities Revenues [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | (3.5) | |||||
Transmission and Distribution Utilities Revenues [Member] | Appalachian Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0 | |||||
Transmission and Distribution Utilities Revenues [Member] | Indiana Michigan Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0 | |||||
Transmission and Distribution Utilities Revenues [Member] | Ohio Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0 | |||||
Transmission and Distribution Utilities Revenues [Member] | Public Service Co Of Oklahoma [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0 | |||||
Transmission and Distribution Utilities Revenues [Member] | Southwestern Electric Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0 | |||||
Generation & Marketing Revenues [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 19.8 | 48.8 | ||||
Generation & Marketing Revenues [Member] | Appalachian Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0 | 0 | ||||
Generation & Marketing Revenues [Member] | Indiana Michigan Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0 | 0 | ||||
Generation & Marketing Revenues [Member] | Ohio Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0 | 0 | ||||
Generation & Marketing Revenues [Member] | Public Service Co Of Oklahoma [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0 | 0 | ||||
Generation & Marketing Revenues [Member] | Southwestern Electric Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0 | 0 | ||||
Electric Generation, Transmission and Distribution Revenues [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0 | 0 | ||||
Electric Generation, Transmission and Distribution Revenues [Member] | Appalachian Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | (0.8) | 0.6 | ||||
Electric Generation, Transmission and Distribution Revenues [Member] | Indiana Michigan Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 1.6 | 2.2 | ||||
Electric Generation, Transmission and Distribution Revenues [Member] | Ohio Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | (3.5) | 0 | ||||
Electric Generation, Transmission and Distribution Revenues [Member] | Public Service Co Of Oklahoma [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0 | 0 | ||||
Electric Generation, Transmission and Distribution Revenues [Member] | Southwestern Electric Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0 | 0 | ||||
Sales to AEP Affiliates [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0 | |||||
Sales to AEP Affiliates [Member] | Appalachian Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 1.1 | |||||
Sales to AEP Affiliates [Member] | Indiana Michigan Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 4 | |||||
Sales to AEP Affiliates [Member] | Ohio Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0 | |||||
Sales to AEP Affiliates [Member] | Public Service Co Of Oklahoma [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0 | |||||
Sales to AEP Affiliates [Member] | Southwestern Electric Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0 | |||||
Purchased Electricity for Resale [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 2.1 | 3.3 | ||||
Purchased Electricity for Resale [Member] | Appalachian Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 1.4 | 0.7 | ||||
Purchased Electricity for Resale [Member] | Indiana Michigan Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0.1 | 0.3 | ||||
Purchased Electricity for Resale [Member] | Ohio Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0 | 0 | ||||
Purchased Electricity for Resale [Member] | Public Service Co Of Oklahoma [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0 | 0 | ||||
Purchased Electricity for Resale [Member] | Southwestern Electric Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | 0 | 0 | ||||
Other Operation Expense [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | (0.7) | (0.9) | ||||
Other Operation Expense [Member] | Appalachian Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | (0.1) | (0.1) | ||||
Other Operation Expense [Member] | Indiana Michigan Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | (0.1) | (0.1) | ||||
Other Operation Expense [Member] | Ohio Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | (0.1) | (0.2) | ||||
Other Operation Expense [Member] | Public Service Co Of Oklahoma [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | (0.1) | (0.1) | ||||
Other Operation Expense [Member] | Southwestern Electric Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | (0.1) | (0.1) | ||||
Maintenance Expense [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | (0.8) | (0.8) | ||||
Maintenance Expense [Member] | Appalachian Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | (0.2) | (0.2) | ||||
Maintenance Expense [Member] | Indiana Michigan Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | (0.1) | (0.1) | ||||
Maintenance Expense [Member] | Ohio Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | (0.1) | (0.1) | ||||
Maintenance Expense [Member] | Public Service Co Of Oklahoma [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | (0.1) | (0.1) | ||||
Maintenance Expense [Member] | Southwestern Electric Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | (0.1) | (0.1) | ||||
Regulatory Assets [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | [13] | (11.1) | (4.1) | |||
Regulatory Assets [Member] | Appalachian Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | [13] | 0.2 | 0.7 | |||
Regulatory Assets [Member] | Indiana Michigan Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | [13] | 0.3 | (0.5) | |||
Regulatory Assets [Member] | Ohio Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | [13] | (11.4) | 0 | |||
Regulatory Assets [Member] | Public Service Co Of Oklahoma [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | [13] | (0.5) | (0.8) | |||
Regulatory Assets [Member] | Southwestern Electric Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | [13] | 0.1 | (3.5) | |||
Regulatory Liabilities [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | [13] | 12.7 | 3.9 | |||
Regulatory Liabilities [Member] | Appalachian Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | [13] | 15.9 | 1.7 | |||
Regulatory Liabilities [Member] | Indiana Michigan Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | [13] | 3.9 | (3) | |||
Regulatory Liabilities [Member] | Ohio Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | [13] | (15.2) | 4.7 | |||
Regulatory Liabilities [Member] | Public Service Co Of Oklahoma [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | [13] | 0 | 0 | |||
Regulatory Liabilities [Member] | Southwestern Electric Power Co [Member] | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | ||||||
Amount of Gain (Loss) Recognized on Risk Management Contracts | [13] | $ 4.5 | $ 3.9 | |||
[1] | Represents the amount of collateral AEP subsidiaries would have been required to post for other significant non-derivative contracts including AGR jointly owned plant contracts and various other commodity related contacts. | |||||
[2] | Amounts in “Other’’ column primarily represent counterparty netting of risk management and hedging contracts and associated cash collateral under the accounting guidance for “Derivatives and Hedging.’’ | |||||
[3] | The March 31, 2016 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(5) million in 2016 and $(5) million in periods 2017-2019; Level 2 matures $3 million in 2016, $9 million in periods 2017-2019, $3 million in periods 2020-2021 and $1 million in periods 2022-2032; Level 3 matures $17 million in 2016, $37 million in periods 2017-2019, $21 million in periods 2020-2021 and $69 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. | |||||
[4] | The December 31, 2015 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(9) million in 2016 and $(4) million in periods 2017-2019; Level 2 matures $2 million in 2016, $18 million in periods 2017-2019 and $4 million in periods 2020-2021; Level 3 matures $28 million in 2016, $29 million in periods 2017-2019, $19 million in periods 2020-2021 and $76 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. | |||||
[5] | Substantially comprised of power contracts for APCo, I&M and OPCo and coal contracts for PSO and SWEPCo. | |||||
[6] | Hedging Assets and Hedging Liabilities are included in Risk Management Assets and Liabilities on the condensed balance sheets. | |||||
[7] | Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” | |||||
[8] | Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for “Derivatives and Hedging.” | |||||
[9] | Amounts primarily include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” | |||||
[10] | Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for “Derivatives and Hedging.” | |||||
[11] | There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. | |||||
[12] | There are no derivative contracts subject to a master netting arrangement or similar agreement which are not offset in the statement of financial position. | |||||
[13] | Represents realized and unrealized gains and losses subject to regulatory accounting treatment recorded as either current or noncurrent on the condensed balance sheets. |
Fair Value Long-term Debt, Othe
Fair Value Long-term Debt, Other Temporary Investments, Nuclear Trusts (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | ||
Book Values and Fair Values of Long - term Debt | ||||
Total Long-term Debt Outstanding | $ 19,782.6 | $ 19,572.7 | ||
Long Term Debt, Fair Value | 22,052.8 | 21,201.3 | ||
Other Temporary Investments | ||||
Cost | 252.7 | 375.8 | ||
Gross Unrealized Gains | 11.8 | 11.7 | ||
Gross Unrealized Losses | 0 | (0.7) | ||
Estimated Fair Value | 264.5 | 386.8 | ||
Debt and Equity Securities Within Other Temporary Investments | ||||
Proceeds from Investment Sales | 0 | $ 0 | ||
Purchases of Investments | 0.4 | 0.4 | ||
Gross Realized Gains on Investment Sales | 0 | 0 | ||
Gross Realized Losses on Investment Sales | 0 | 0 | ||
Nuclear Trust Fund Investments | ||||
Fair Value | 2,152.4 | 2,106.4 | ||
Gross Unrealized Gains | 641.9 | 611.8 | ||
Other-Than-Temporary Impairments | (82.3) | (83.3) | ||
Securities Activity Within Decommissioning and SNF Trusts | ||||
Proceeds from Investment Sales | 1,137.7 | 228.2 | ||
Purchases of Investments | 1,151.6 | 245.8 | ||
Gross Realized Gains on Investment Sales | 15.8 | 11.2 | ||
Gross Realized Losses on Investment Sales | 7.8 | 3.8 | ||
Contractual Maturities, Fair Value of Debt Securities | ||||
Contractual Maturities, Fair Value of Debt Securities | 2,152.4 | 2,106.4 | ||
Fair Value Measurements (Textuals) | ||||
Adjusted Cost of Debt Securities | 801 | 771 | ||
Adjusted Cost of Domestic Equity Securities | 568 | 555 | ||
Appalachian Power Co [Member] | ||||
Book Values and Fair Values of Long - term Debt | ||||
Total Long-term Debt Outstanding | 3,919.3 | 3,930.7 | ||
Long Term Debt, Fair Value | 4,597.8 | 4,416.7 | ||
Indiana Michigan Power Co [Member] | ||||
Book Values and Fair Values of Long - term Debt | ||||
Total Long-term Debt Outstanding | 2,366.6 | 2,000 | ||
Long Term Debt, Fair Value | 2,595.4 | 2,193.6 | ||
Nuclear Trust Fund Investments | ||||
Fair Value | 2,152.4 | 2,106.4 | ||
Gross Unrealized Gains | 641.9 | 611.8 | ||
Other-Than-Temporary Impairments | (82.3) | (83.3) | ||
Securities Activity Within Decommissioning and SNF Trusts | ||||
Proceeds from Investment Sales | 1,137.7 | 228.2 | ||
Purchases of Investments | 1,151.6 | 245.8 | ||
Gross Realized Gains on Investment Sales | 15.8 | 11.2 | ||
Gross Realized Losses on Investment Sales | 7.8 | $ 3.8 | ||
Contractual Maturities, Fair Value of Debt Securities | ||||
Contractual Maturities, Fair Value of Debt Securities | 2,152.4 | 2,106.4 | ||
Fair Value Measurements (Textuals) | ||||
Adjusted Cost of Debt Securities | 801 | 771 | ||
Adjusted Cost of Domestic Equity Securities | 568 | 555 | ||
Ohio Power Co [Member] | ||||
Book Values and Fair Values of Long - term Debt | ||||
Total Long-term Debt Outstanding | 2,135.5 | 2,157.7 | ||
Long Term Debt, Fair Value | 2,515.4 | 2,472.7 | ||
Public Service Co Of Oklahoma [Member] | ||||
Book Values and Fair Values of Long - term Debt | ||||
Total Long-term Debt Outstanding | 1,286.3 | 1,286.1 | ||
Long Term Debt, Fair Value | 1,463.6 | 1,402.9 | ||
Southwestern Electric Power Co [Member] | ||||
Book Values and Fair Values of Long - term Debt | ||||
Total Long-term Debt Outstanding | 2,272.4 | 2,273.5 | ||
Long Term Debt, Fair Value | 2,483.4 | 2,417.2 | ||
Cash [Member] | ||||
Other Temporary Investments | ||||
Cost | [1] | 147.4 | 271 | |
Gross Unrealized Gains | [1] | 0 | 0 | |
Gross Unrealized Losses | [1] | 0 | 0 | |
Estimated Fair Value | [1],[2] | 147.4 | 271 | |
Fixed Income Funds [Member] | ||||
Nuclear Trust Fund Investments | ||||
Fair Value | 859 | 811.2 | ||
Gross Unrealized Gains | 58.4 | 40.2 | ||
Other-Than-Temporary Impairments | (3.4) | (4) | ||
Contractual Maturities, Fair Value of Debt Securities | ||||
Contractual Maturities, Fair Value of Debt Securities | 859 | 811.2 | ||
Fixed Income Funds [Member] | Indiana Michigan Power Co [Member] | ||||
Nuclear Trust Fund Investments | ||||
Fair Value | 859 | 811.2 | ||
Gross Unrealized Gains | 58.4 | 40.2 | ||
Other-Than-Temporary Impairments | (3.4) | (4) | ||
Contractual Maturities, Fair Value of Debt Securities | ||||
Contractual Maturities, Fair Value of Debt Securities | 859 | 811.2 | ||
Mutual Funds Fixed Income [Member] | ||||
Other Temporary Investments | ||||
Cost | 91.4 | 91.1 | ||
Gross Unrealized Gains | 0.1 | 0 | ||
Gross Unrealized Losses | 0 | (0.7) | ||
Estimated Fair Value | 91.5 | 90.4 | ||
Domestic [Member] | ||||
Nuclear Trust Fund Investments | ||||
Fair Value | [3] | 1,151.4 | 1,126.9 | |
Gross Unrealized Gains | 583.5 | 571.6 | ||
Other-Than-Temporary Impairments | (78.9) | (79.3) | ||
Contractual Maturities, Fair Value of Debt Securities | ||||
Contractual Maturities, Fair Value of Debt Securities | [3] | 1,151.4 | 1,126.9 | |
Domestic [Member] | Indiana Michigan Power Co [Member] | ||||
Nuclear Trust Fund Investments | ||||
Fair Value | [3] | 1,151.4 | 1,126.9 | |
Gross Unrealized Gains | 583.5 | 571.6 | ||
Other-Than-Temporary Impairments | (78.9) | (79.3) | ||
Contractual Maturities, Fair Value of Debt Securities | ||||
Contractual Maturities, Fair Value of Debt Securities | [3] | 1,151.4 | 1,126.9 | |
Mutual Funds Equity [Member] | ||||
Other Temporary Investments | ||||
Cost | 13.9 | 13.7 | ||
Gross Unrealized Gains | 11.7 | 11.7 | ||
Gross Unrealized Losses | 0 | 0 | ||
Estimated Fair Value | [3] | 25.6 | 25.4 | |
Cash and Cash Equivalents [Member] | ||||
Nuclear Trust Fund Investments | ||||
Fair Value | [4] | 142 | 168.3 | |
Gross Unrealized Gains | 0 | 0 | ||
Other-Than-Temporary Impairments | 0 | 0 | ||
Contractual Maturities, Fair Value of Debt Securities | ||||
Contractual Maturities, Fair Value of Debt Securities | [4] | 142 | 168.3 | |
Cash and Cash Equivalents [Member] | Indiana Michigan Power Co [Member] | ||||
Nuclear Trust Fund Investments | ||||
Fair Value | [4] | 142 | 168.3 | |
Gross Unrealized Gains | 0 | 0 | ||
Other-Than-Temporary Impairments | 0 | 0 | ||
Contractual Maturities, Fair Value of Debt Securities | ||||
Contractual Maturities, Fair Value of Debt Securities | [4] | 142 | 168.3 | |
US Government Agencies Debt Securities [Member] | ||||
Nuclear Trust Fund Investments | ||||
Fair Value | 761.1 | 731.1 | ||
Gross Unrealized Gains | 52.3 | 35.9 | ||
Other-Than-Temporary Impairments | (2.1) | (2.6) | ||
Contractual Maturities, Fair Value of Debt Securities | ||||
Contractual Maturities, Fair Value of Debt Securities | 761.1 | 731.1 | ||
US Government Agencies Debt Securities [Member] | Indiana Michigan Power Co [Member] | ||||
Nuclear Trust Fund Investments | ||||
Fair Value | 761.1 | 731.1 | ||
Gross Unrealized Gains | 52.3 | 35.9 | ||
Other-Than-Temporary Impairments | (2.1) | (2.6) | ||
Contractual Maturities, Fair Value of Debt Securities | ||||
Contractual Maturities, Fair Value of Debt Securities | 761.1 | 731.1 | ||
Corporate Debt [Member] | ||||
Nuclear Trust Fund Investments | ||||
Fair Value | 68.9 | 57.9 | ||
Gross Unrealized Gains | 4.9 | 3.2 | ||
Other-Than-Temporary Impairments | (1) | (1.1) | ||
Contractual Maturities, Fair Value of Debt Securities | ||||
Contractual Maturities, Fair Value of Debt Securities | 68.9 | 57.9 | ||
Corporate Debt [Member] | Indiana Michigan Power Co [Member] | ||||
Nuclear Trust Fund Investments | ||||
Fair Value | 68.9 | 57.9 | ||
Gross Unrealized Gains | 4.9 | 3.2 | ||
Other-Than-Temporary Impairments | (1) | (1.1) | ||
Contractual Maturities, Fair Value of Debt Securities | ||||
Contractual Maturities, Fair Value of Debt Securities | 68.9 | 57.9 | ||
State and Local Jurisdiction [Member] | ||||
Nuclear Trust Fund Investments | ||||
Fair Value | 29 | 22.2 | ||
Gross Unrealized Gains | 1.2 | 1.1 | ||
Other-Than-Temporary Impairments | (0.3) | (0.3) | ||
Contractual Maturities, Fair Value of Debt Securities | ||||
Contractual Maturities, Fair Value of Debt Securities | 29 | 22.2 | ||
State and Local Jurisdiction [Member] | Indiana Michigan Power Co [Member] | ||||
Nuclear Trust Fund Investments | ||||
Fair Value | 29 | 22.2 | ||
Gross Unrealized Gains | 1.2 | 1.1 | ||
Other-Than-Temporary Impairments | (0.3) | (0.3) | ||
Contractual Maturities, Fair Value of Debt Securities | ||||
Contractual Maturities, Fair Value of Debt Securities | 29 | $ 22.2 | ||
Within One Year [Member] | ||||
Nuclear Trust Fund Investments | ||||
Fair Value | 175.4 | |||
Contractual Maturities, Fair Value of Debt Securities | ||||
Contractual Maturities, Fair Value of Debt Securities | 175.4 | |||
Within One Year [Member] | Indiana Michigan Power Co [Member] | ||||
Nuclear Trust Fund Investments | ||||
Fair Value | 175.4 | |||
Contractual Maturities, Fair Value of Debt Securities | ||||
Contractual Maturities, Fair Value of Debt Securities | 175.4 | |||
One Year To Five Year [Member] | ||||
Nuclear Trust Fund Investments | ||||
Fair Value | 369.6 | |||
Contractual Maturities, Fair Value of Debt Securities | ||||
Contractual Maturities, Fair Value of Debt Securities | 369.6 | |||
One Year To Five Year [Member] | Indiana Michigan Power Co [Member] | ||||
Nuclear Trust Fund Investments | ||||
Fair Value | 369.6 | |||
Contractual Maturities, Fair Value of Debt Securities | ||||
Contractual Maturities, Fair Value of Debt Securities | 369.6 | |||
Five Year To Ten Year [Member] | ||||
Nuclear Trust Fund Investments | ||||
Fair Value | 133 | |||
Contractual Maturities, Fair Value of Debt Securities | ||||
Contractual Maturities, Fair Value of Debt Securities | 133 | |||
Five Year To Ten Year [Member] | Indiana Michigan Power Co [Member] | ||||
Nuclear Trust Fund Investments | ||||
Fair Value | 133 | |||
Contractual Maturities, Fair Value of Debt Securities | ||||
Contractual Maturities, Fair Value of Debt Securities | 133 | |||
After Ten Year [Member] | ||||
Nuclear Trust Fund Investments | ||||
Fair Value | 181 | |||
Contractual Maturities, Fair Value of Debt Securities | ||||
Contractual Maturities, Fair Value of Debt Securities | 181 | |||
After Ten Year [Member] | Indiana Michigan Power Co [Member] | ||||
Nuclear Trust Fund Investments | ||||
Fair Value | 181 | |||
Contractual Maturities, Fair Value of Debt Securities | ||||
Contractual Maturities, Fair Value of Debt Securities | $ 181 | |||
[1] | Primarily represents amounts held for the repayment of debt. | |||
[2] | Amounts in “Other’’ column primarily represent cash deposits in bank accounts with financial institutions or with third parties. Level 1 and Level 2 amounts primarily represent investments in money market funds. | |||
[3] | Amounts represent publicly traded equity securities and equity-based mutual funds. | |||
[4] | Amounts in “Other’’ column primarily represent accrued interest receivables from financial institutions. Level 1 amounts primarily represent investments in money market funds. |
Fair Value Assets and Liabiliti
Fair Value Assets and Liabilities (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2016USD ($)$ / MWh | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($)$ / MWh | ||||
Assets, Fair Value Disclosure | ||||||
Cash and Cash Equivalents | [1] | $ 190.4 | $ 176.4 | |||
Other Temporary Investments | 264.5 | 386.8 | ||||
Risk Management Assets | ||||||
Risk Management Assets | 472.7 | 456.2 | ||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 2,152.4 | 2,106.4 | ||||
Total Assets | 3,080 | 3,125.8 | ||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | 311.9 | 266.2 | ||||
Changes in the Fair Value of Net Trading Derivatives and other investments | ||||||
Beginning Balance | 146.9 | $ 150.8 | 150.8 | |||
Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) | [2],[3] | 23.5 | 8.6 | |||
Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date | [2] | 21.9 | 5.2 | |||
Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income | 1.3 | (1.9) | ||||
Purchases, Issuances and Settlements | [4] | (42.7) | (38.5) | |||
Transfers into Level 3 | [5],[6] | 15.3 | ||||
Transfers out of Level 3 | [6],[7] | 10.9 | (12.4) | |||
Changes in Fair Value Allocated to Regulated Jurisdictions | [8] | (20.5) | 3.5 | |||
Ending Balance | $ 141.3 | 130.6 | $ 146.9 | |||
Level 3 Quantitative Information | ||||||
Counterparty Credit Risk | [9] | 6.70% | ||||
Low [Member] | ||||||
Level 3 Quantitative Information | ||||||
Counterparty Credit Risk | [9] | 2.51% | ||||
High [Member] | ||||||
Level 3 Quantitative Information | ||||||
Counterparty Credit Risk | [9] | 6.69% | ||||
Level 1 [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Cash and Cash Equivalents | [1] | $ 9.6 | $ 3.9 | |||
Other Temporary Investments | 246.3 | 345.8 | ||||
Risk Management Assets | ||||||
Risk Management Assets | 10.7 | 11.5 | ||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 1,286.7 | 1,287.4 | ||||
Total Assets | 1,553.3 | 1,648.6 | ||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | 20.5 | 24.1 | ||||
Level 2 [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Cash and Cash Equivalents | [1] | 4.4 | 4.3 | |||
Other Temporary Investments | 7.6 | 7.7 | ||||
Risk Management Assets | ||||||
Risk Management Assets | 597.4 | 510.9 | ||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 859 | 811.2 | ||||
Total Assets | 1,468.4 | 1,334.1 | ||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | 599.3 | 493.8 | ||||
Level 3 [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Cash and Cash Equivalents | [1] | 0 | 0 | |||
Other Temporary Investments | 0 | 0 | ||||
Risk Management Assets | ||||||
Risk Management Assets | 209.9 | 220.7 | ||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 0 | 0 | ||||
Total Assets | 209.9 | 220.7 | ||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | 68.6 | 73.8 | ||||
Fair Value Inputs Other [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Cash and Cash Equivalents | [1] | 176.4 | 168.2 | |||
Other Temporary Investments | 10.6 | 33.3 | ||||
Risk Management Assets | ||||||
Risk Management Assets | (345.3) | (286.9) | ||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 6.7 | 7.8 | ||||
Total Assets | (151.6) | (77.6) | ||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | (376.5) | (325.5) | ||||
2016 [Member] | Level 1 [Member] | ||||||
Fair Value Measurements 1 (Textuals) | ||||||
Maturity of Net Fair Value of Risk Management Contracts Prior to Cash Collateral, Assets/Liabilities | (5) | (9) | ||||
2016 [Member] | Level 2 [Member] | ||||||
Fair Value Measurements 1 (Textuals) | ||||||
Maturity of Net Fair Value of Risk Management Contracts Prior to Cash Collateral, Assets/Liabilities | 3 | 2 | ||||
2016 [Member] | Level 3 [Member] | ||||||
Fair Value Measurements 1 (Textuals) | ||||||
Maturity of Net Fair Value of Risk Management Contracts Prior to Cash Collateral, Assets/Liabilities | 17 | 28 | ||||
2017 - 2019 [Member] | Level 1 [Member] | ||||||
Fair Value Measurements 1 (Textuals) | ||||||
Maturity of Net Fair Value of Risk Management Contracts Prior to Cash Collateral, Assets/Liabilities | (5) | (4) | ||||
2017 - 2019 [Member] | Level 2 [Member] | ||||||
Fair Value Measurements 1 (Textuals) | ||||||
Maturity of Net Fair Value of Risk Management Contracts Prior to Cash Collateral, Assets/Liabilities | 9 | 18 | ||||
2017 - 2019 [Member] | Level 3 [Member] | ||||||
Fair Value Measurements 1 (Textuals) | ||||||
Maturity of Net Fair Value of Risk Management Contracts Prior to Cash Collateral, Assets/Liabilities | 37 | 29 | ||||
2020 - 2021 [Member] | Level 2 [Member] | ||||||
Fair Value Measurements 1 (Textuals) | ||||||
Maturity of Net Fair Value of Risk Management Contracts Prior to Cash Collateral, Assets/Liabilities | 3 | 4 | ||||
2020 - 2021 [Member] | Level 3 [Member] | ||||||
Fair Value Measurements 1 (Textuals) | ||||||
Maturity of Net Fair Value of Risk Management Contracts Prior to Cash Collateral, Assets/Liabilities | 21 | 19 | ||||
2022 - 2032 [Member] | Level 2 [Member] | ||||||
Fair Value Measurements 1 (Textuals) | ||||||
Maturity of Net Fair Value of Risk Management Contracts Prior to Cash Collateral, Assets/Liabilities | 1 | |||||
2022 - 2032 [Member] | Level 3 [Member] | ||||||
Fair Value Measurements 1 (Textuals) | ||||||
Maturity of Net Fair Value of Risk Management Contracts Prior to Cash Collateral, Assets/Liabilities | 69 | 76 | ||||
Risk Management Commodity Contracts [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10] | 452 | [11] | 438.5 | [12] | |
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10] | 271 | [11] | 236.6 | [12] | |
Risk Management Commodity Contracts [Member] | Level 1 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10] | 10.7 | [11] | 11.5 | [12] | |
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10] | 20.5 | [11] | 24.1 | [12] | |
Risk Management Commodity Contracts [Member] | Level 2 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10] | 585.5 | [11] | 495 | [12] | |
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10] | 569.2 | [11] | 471.5 | [12] | |
Risk Management Commodity Contracts [Member] | Level 3 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10] | 201.8 | [11] | 219.7 | [12] | |
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10] | 58.5 | [11] | 67.3 | [12] | |
Risk Management Commodity Contracts [Member] | Fair Value Inputs Other [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10] | (346) | [11] | (287.7) | [12] | |
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10] | (377.2) | [11] | (326.3) | [12] | |
Energy Contracts [Member] | Level 3 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | 207.6 | 212.3 | ||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | $ 59.5 | $ 70.3 | ||||
Level 3 Quantitative Information | ||||||
Forward Price Range Low | $ / MWh | [13] | 8.77 | 9.69 | |||
Forward Price Range High | $ / MWh | [13] | 162.36 | 165.36 | |||
Weighted Average Market Price | $ / MWh | [13] | 45.45 | 36.35 | |||
FTRs [Member] | Level 3 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | $ 2.3 | $ 8.4 | ||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | $ 9.1 | $ 3.5 | ||||
Level 3 Quantitative Information | ||||||
Forward Price Range Low | $ / MWh | [13] | (17.72) | (6.99) | |||
Forward Price Range High | $ / MWh | [13] | 10.50 | 10.34 | |||
Weighted Average Market Price | $ / MWh | [13] | 0.60 | 1.10 | |||
Commodity Hedges [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10] | $ 19.8 | $ 17.6 | |||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10] | 40.1 | 26.1 | |||
Commodity Hedges [Member] | Level 1 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10] | 0 | 0 | |||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10] | 0 | 0 | |||
Commodity Hedges [Member] | Level 2 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10] | 11.4 | 15.9 | |||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10] | 29.7 | 18.9 | |||
Commodity Hedges [Member] | Level 3 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10] | 8.1 | 1 | |||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10] | 10.1 | 6.5 | |||
Commodity Hedges [Member] | Fair Value Inputs Other [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10] | 0.3 | 0.7 | |||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10] | 0.3 | 0.7 | |||
Interest Rate Foreign Currency Hedges [Member] | ||||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | 0.4 | 0.4 | ||||
Interest Rate Foreign Currency Hedges [Member] | Level 1 [Member] | ||||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | 0 | 0 | ||||
Interest Rate Foreign Currency Hedges [Member] | Level 2 [Member] | ||||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | 0.4 | 0.4 | ||||
Interest Rate Foreign Currency Hedges [Member] | Level 3 [Member] | ||||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | 0 | 0 | ||||
Interest Rate Foreign Currency Hedges [Member] | Fair Value Inputs Other [Member] | ||||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | 0 | 0 | ||||
Fair Value Hedges [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | 0.9 | 0.1 | ||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | 0.4 | 3.1 | ||||
Fair Value Hedges [Member] | Level 1 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | 0 | 0 | ||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | 0 | 0 | ||||
Fair Value Hedges [Member] | Level 2 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | 0.5 | 0 | ||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | 0 | 3 | ||||
Fair Value Hedges [Member] | Level 3 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | 0 | 0 | ||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | 0 | 0 | ||||
Fair Value Hedges [Member] | Fair Value Inputs Other [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | 0.4 | 0.1 | ||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | 0.4 | 0.1 | ||||
Appalachian Power Co [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Cash and Cash Equivalents | [1] | 7.6 | 14.9 | |||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Total Assets | 19.8 | 30.6 | ||||
Changes in the Fair Value of Net Trading Derivatives and other investments | ||||||
Beginning Balance | 11.7 | [14] | 15.8 | 15.8 | ||
Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) | [2],[3] | 15.3 | [14] | 2.2 | ||
Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date | [2] | 0 | [14] | 0 | ||
Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income | 0 | [14] | 0 | |||
Purchases, Issuances and Settlements | [4] | (27.7) | [14] | (13.4) | ||
Transfers into Level 3 | [5],[6] | 0 | ||||
Transfers out of Level 3 | [6],[7] | 0.1 | [14] | 0 | ||
Changes in Fair Value Allocated to Regulated Jurisdictions | [8] | 3.2 | [14] | 1.4 | ||
Ending Balance | 2.6 | [14] | 6 | 11.7 | [14] | |
Appalachian Power Co [Member] | Level 1 [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Cash and Cash Equivalents | [1] | 7.5 | 14.8 | |||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Total Assets | 7.7 | 15 | ||||
Appalachian Power Co [Member] | Level 2 [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Cash and Cash Equivalents | [1] | 0 | 0 | |||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Total Assets | 16.2 | 13.9 | ||||
Appalachian Power Co [Member] | Level 3 [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Cash and Cash Equivalents | [1] | 0 | 0 | |||
Risk Management Assets | ||||||
Risk Management Assets | 8.2 | 12.2 | ||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Total Assets | 8.2 | 12.2 | ||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | 5.6 | 0.5 | ||||
Appalachian Power Co [Member] | Fair Value Inputs Other [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Cash and Cash Equivalents | [1] | 0.1 | 0.1 | |||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Total Assets | (12.3) | (10.5) | ||||
Appalachian Power Co [Member] | Risk Management Commodity Contracts [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10],[15] | 12.2 | 15.7 | |||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10],[15] | 10.5 | 4.9 | |||
Appalachian Power Co [Member] | Risk Management Commodity Contracts [Member] | Level 1 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10],[15] | 0.2 | 0.2 | |||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10],[15] | 0.2 | 0.2 | |||
Appalachian Power Co [Member] | Risk Management Commodity Contracts [Member] | Level 2 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10],[15] | 16.2 | 13.9 | |||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10],[15] | 17.7 | 17.8 | |||
Appalachian Power Co [Member] | Risk Management Commodity Contracts [Member] | Level 3 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10],[15] | 8.2 | 12.2 | |||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10],[15] | 5.6 | 0.5 | |||
Appalachian Power Co [Member] | Risk Management Commodity Contracts [Member] | Fair Value Inputs Other [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10],[15] | (12.4) | (10.6) | |||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10],[15] | (13) | (13.6) | |||
Appalachian Power Co [Member] | Energy Contracts [Member] | Level 3 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | 8.2 | 7.9 | ||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | $ 0.1 | $ 0.2 | ||||
Level 3 Quantitative Information | ||||||
Forward Price Range Low | $ / MWh | [13] | 8.77 | 12.61 | |||
Forward Price Range High | $ / MWh | [13] | 47.05 | 47.24 | |||
Weighted Average Market Price | $ / MWh | [13] | 29.14 | 32.38 | |||
Appalachian Power Co [Member] | FTRs [Member] | Level 3 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | $ 0 | $ 4.3 | ||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | $ 5.5 | $ 0.3 | ||||
Level 3 Quantitative Information | ||||||
Forward Price Range Low | $ / MWh | [13] | 0.42 | (6.96) | |||
Forward Price Range High | $ / MWh | [13] | 5.58 | 8.43 | |||
Weighted Average Market Price | $ / MWh | [13] | 1.90 | 1.34 | |||
Indiana Michigan Power Co [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | $ 2,152.4 | $ 2,106.4 | ||||
Total Assets | 2,161.9 | 2,118.7 | ||||
Changes in the Fair Value of Net Trading Derivatives and other investments | ||||||
Beginning Balance | 4.3 | [14] | 14.7 | 14.7 | ||
Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) | [2],[3] | 2.5 | [14] | 0.1 | ||
Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date | [2] | 0 | [14] | 0 | ||
Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income | 0 | [14] | 0 | |||
Purchases, Issuances and Settlements | [4] | (4.6) | [14] | (9) | ||
Transfers into Level 3 | [5],[6] | 0 | ||||
Transfers out of Level 3 | [6],[7] | 0.1 | [14] | 0 | ||
Changes in Fair Value Allocated to Regulated Jurisdictions | [8] | 1.4 | [14] | (0.2) | ||
Ending Balance | 3.7 | [14] | 5.6 | 4.3 | [14] | |
Indiana Michigan Power Co [Member] | Level 1 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 1,286.7 | 1,287.4 | ||||
Total Assets | 1,286.8 | 1,287.5 | ||||
Indiana Michigan Power Co [Member] | Level 2 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 859 | 811.2 | ||||
Total Assets | 871.5 | 828.2 | ||||
Indiana Michigan Power Co [Member] | Level 3 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | 5.5 | 6.3 | ||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 0 | 0 | ||||
Total Assets | 5.5 | 6.3 | ||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | 1.8 | 2 | ||||
Indiana Michigan Power Co [Member] | Fair Value Inputs Other [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 6.7 | 7.8 | ||||
Total Assets | (1.9) | (3.3) | ||||
Indiana Michigan Power Co [Member] | Risk Management Commodity Contracts [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10],[15] | 9.5 | 12.3 | |||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10],[15] | 7.4 | 7.9 | |||
Indiana Michigan Power Co [Member] | Risk Management Commodity Contracts [Member] | Level 1 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10],[15] | 0.1 | 0.1 | |||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10],[15] | 0.1 | 0.1 | |||
Indiana Michigan Power Co [Member] | Risk Management Commodity Contracts [Member] | Level 2 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10],[15] | 12.5 | 17 | |||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10],[15] | 14.2 | 17.5 | |||
Indiana Michigan Power Co [Member] | Risk Management Commodity Contracts [Member] | Level 3 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10],[15] | 5.5 | 6.3 | |||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10],[15] | 1.8 | 2 | |||
Indiana Michigan Power Co [Member] | Risk Management Commodity Contracts [Member] | Fair Value Inputs Other [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10],[15] | (8.6) | (11.1) | |||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10],[15] | (8.7) | (11.7) | |||
Indiana Michigan Power Co [Member] | Energy Contracts [Member] | Level 3 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | 5.5 | 6 | ||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | $ 0.1 | $ 0.2 | ||||
Level 3 Quantitative Information | ||||||
Forward Price Range Low | $ / MWh | [13] | 8.77 | 12.61 | |||
Forward Price Range High | $ / MWh | [13] | 47.05 | 47.24 | |||
Weighted Average Market Price | $ / MWh | [13] | 29.14 | 32.38 | |||
Indiana Michigan Power Co [Member] | FTRs [Member] | Level 3 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | $ 0 | $ 0.3 | ||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | $ 1.7 | $ 1.8 | ||||
Level 3 Quantitative Information | ||||||
Forward Price Range Low | $ / MWh | [13] | (0.07) | (6.96) | |||
Forward Price Range High | $ / MWh | [13] | 5.58 | 8.43 | |||
Weighted Average Market Price | $ / MWh | [13] | 0.42 | 1.34 | |||
Ohio Power Co [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Cash and Cash Equivalents | [1] | $ 16.2 | $ 27.7 | |||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Total Assets | 46.9 | |||||
Changes in the Fair Value of Net Trading Derivatives and other investments | ||||||
Beginning Balance | 15.9 | 48.4 | 48.4 | |||
Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) | [2],[3] | (0.6) | 0.2 | |||
Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date | [2] | 0 | 0 | |||
Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income | 0 | 0 | ||||
Purchases, Issuances and Settlements | [4] | 1.4 | (6.8) | |||
Transfers into Level 3 | [5],[6] | 0 | ||||
Transfers out of Level 3 | [6],[7] | 0 | 0 | |||
Changes in Fair Value Allocated to Regulated Jurisdictions | [8] | (27.6) | 4.1 | |||
Ending Balance | $ (10.9) | 45.9 | 15.9 | |||
Level 3 Quantitative Information | ||||||
Counterparty Credit Risk | [9] | 2.51% | ||||
Ohio Power Co [Member] | Level 1 [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Cash and Cash Equivalents | [1] | $ 16.2 | 0 | |||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Total Assets | 0 | |||||
Ohio Power Co [Member] | Level 2 [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Cash and Cash Equivalents | [1] | 0 | 0 | |||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Total Assets | 0 | |||||
Ohio Power Co [Member] | Level 3 [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Cash and Cash Equivalents | [1] | 0 | 0 | |||
Risk Management Assets | ||||||
Risk Management Assets | 0 | |||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Total Assets | 16 | |||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | 10.9 | |||||
Ohio Power Co [Member] | Fair Value Inputs Other [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Cash and Cash Equivalents | [1] | 0 | 27.7 | |||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Total Assets | 30.9 | |||||
Ohio Power Co [Member] | Risk Management Commodity Contracts [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10],[15] | 19.2 | ||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10],[15] | 11.3 | 3.6 | |||
Ohio Power Co [Member] | Risk Management Commodity Contracts [Member] | Level 1 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10],[15] | 0 | ||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10],[15] | 0 | 0 | |||
Ohio Power Co [Member] | Risk Management Commodity Contracts [Member] | Level 2 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10],[15] | 0 | ||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10],[15] | 0.6 | 0.8 | |||
Ohio Power Co [Member] | Risk Management Commodity Contracts [Member] | Level 3 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10],[15] | 16 | ||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10],[15] | 10.9 | 0.1 | |||
Ohio Power Co [Member] | Risk Management Commodity Contracts [Member] | Fair Value Inputs Other [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10],[15] | 3.2 | ||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10],[15] | (0.2) | 2.7 | |||
Ohio Power Co [Member] | Energy Contracts [Member] | Level 3 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | 0 | 16 | ||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | $ 10.9 | $ 0.1 | ||||
Level 3 Quantitative Information | ||||||
Forward Price Range Low | $ / MWh | [13] | 36.41 | 41.61 | |||
Forward Price Range High | $ / MWh | [13] | 162.36 | 165.36 | |||
Weighted Average Market Price | $ / MWh | [13] | 84.24 | 86.84 | |||
Public Service Co Of Oklahoma [Member] | ||||||
Changes in the Fair Value of Net Trading Derivatives and other investments | ||||||
Beginning Balance | $ 0.6 | (0.3) | $ (0.3) | |||
Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) | [2],[3] | (0.8) | (0.3) | |||
Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date | [2] | 0 | 0 | |||
Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income | 0 | 0 | ||||
Purchases, Issuances and Settlements | [4] | 0.5 | 0.6 | |||
Transfers into Level 3 | [5],[6] | 0 | ||||
Transfers out of Level 3 | [6],[7] | 0 | 0 | |||
Changes in Fair Value Allocated to Regulated Jurisdictions | [8] | 0.3 | (0.7) | |||
Ending Balance | 0.6 | (0.7) | 0.6 | |||
Public Service Co Of Oklahoma [Member] | Risk Management Commodity Contracts [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10],[15] | 0.7 | 0.6 | |||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10],[15] | 0.2 | 0.2 | |||
Public Service Co Of Oklahoma [Member] | Risk Management Commodity Contracts [Member] | Level 1 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10],[15] | 0 | 0 | |||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10],[15] | 0 | 0 | |||
Public Service Co Of Oklahoma [Member] | Risk Management Commodity Contracts [Member] | Level 2 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10],[15] | 0.1 | 0 | |||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10],[15] | 0.3 | 0.5 | |||
Public Service Co Of Oklahoma [Member] | Risk Management Commodity Contracts [Member] | Level 3 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10],[15] | 0.7 | 0.7 | |||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10],[15] | 0.1 | 0.1 | |||
Public Service Co Of Oklahoma [Member] | Risk Management Commodity Contracts [Member] | Fair Value Inputs Other [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10],[15] | (0.1) | (0.1) | |||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10],[15] | (0.2) | (0.4) | |||
Public Service Co Of Oklahoma [Member] | FTRs [Member] | Level 3 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | 0.7 | 0.7 | ||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | $ 0.1 | $ 0.1 | ||||
Level 3 Quantitative Information | ||||||
Forward Price Range Low | $ / MWh | [13] | (17.72) | (6.96) | |||
Forward Price Range High | $ / MWh | [13] | 1.80 | 8.43 | |||
Weighted Average Market Price | $ / MWh | [13] | (0.59) | 1.34 | |||
Southwestern Electric Power Co [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Cash and Cash Equivalents | [1] | $ 12.3 | $ 5.2 | |||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Total Assets | 13.1 | 6 | ||||
Changes in the Fair Value of Net Trading Derivatives and other investments | ||||||
Beginning Balance | 0.8 | (0.5) | (0.5) | |||
Realized Gain (Loss) Included in Net Income (or Changes in Net Assets) | [2],[3] | 4.6 | 5.8 | |||
Unrealized Gain (Loss) Included in Net Income (or Changes in Net Assets) Relating to Assets Still Held at the Reporting Date | [2] | 0 | 0 | |||
Realized and Unrealized Gains (Losses) Included in Other Comprehensive Income | 0 | 0 | ||||
Purchases, Issuances and Settlements | [4] | (4.9) | (5.3) | |||
Transfers into Level 3 | [5],[6] | 0 | ||||
Transfers out of Level 3 | [6],[7] | 0 | 0 | |||
Changes in Fair Value Allocated to Regulated Jurisdictions | [8] | 0.2 | (1.2) | |||
Ending Balance | 0.7 | $ (1.2) | 0.8 | |||
Southwestern Electric Power Co [Member] | Level 1 [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Cash and Cash Equivalents | [1] | 9.4 | 3.6 | |||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Total Assets | 9.4 | 3.6 | ||||
Southwestern Electric Power Co [Member] | Level 2 [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Cash and Cash Equivalents | [1] | 0 | 0 | |||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Total Assets | 0.1 | 0 | ||||
Southwestern Electric Power Co [Member] | Level 3 [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Cash and Cash Equivalents | [1] | 0 | 0 | |||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Total Assets | 0.8 | 0.9 | ||||
Southwestern Electric Power Co [Member] | Fair Value Inputs Other [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Cash and Cash Equivalents | [1] | 2.9 | 1.6 | |||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Total Assets | 2.8 | 1.5 | ||||
Southwestern Electric Power Co [Member] | Risk Management Commodity Contracts [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10],[15] | 0.8 | 0.8 | |||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10],[15] | 5.3 | 5.2 | |||
Southwestern Electric Power Co [Member] | Risk Management Commodity Contracts [Member] | Level 1 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10],[15] | 0 | 0 | |||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10],[15] | 0 | 0 | |||
Southwestern Electric Power Co [Member] | Risk Management Commodity Contracts [Member] | Level 2 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10],[15] | 0.1 | 0 | |||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10],[15] | 5.5 | 5.5 | |||
Southwestern Electric Power Co [Member] | Risk Management Commodity Contracts [Member] | Level 3 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10],[15] | 0.8 | 0.9 | |||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10],[15] | 0.1 | 0.1 | |||
Southwestern Electric Power Co [Member] | Risk Management Commodity Contracts [Member] | Fair Value Inputs Other [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | [10],[15] | (0.1) | (0.1) | |||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | [10],[15] | (0.3) | (0.4) | |||
Southwestern Electric Power Co [Member] | FTRs [Member] | Level 3 [Member] | ||||||
Risk Management Assets | ||||||
Risk Management Assets | 0.8 | 0.9 | ||||
Liabilities, Fair Value Disclosure | ||||||
Risk Management Liabilities | $ 0.1 | $ 0.1 | ||||
Level 3 Quantitative Information | ||||||
Forward Price Range Low | $ / MWh | [13] | (17.72) | (6.96) | |||
Forward Price Range High | $ / MWh | [13] | 1.80 | 8.43 | |||
Weighted Average Market Price | $ / MWh | [13] | (0.59) | 1.34 | |||
Cash [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Other Temporary Investments | [1],[16] | $ 147.4 | $ 271 | |||
Cash [Member] | Level 1 [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Other Temporary Investments | [1] | 129.2 | 230 | |||
Cash [Member] | Level 2 [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Other Temporary Investments | [1] | 7.6 | 7.7 | |||
Cash [Member] | Level 3 [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Other Temporary Investments | [1] | 0 | 0 | |||
Cash [Member] | Fair Value Inputs Other [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Other Temporary Investments | [1] | 10.6 | 33.3 | |||
Fixed Income Funds [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 859 | 811.2 | ||||
Fixed Income Funds [Member] | Level 1 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 0 | 0 | ||||
Fixed Income Funds [Member] | Level 2 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 859 | 811.2 | ||||
Fixed Income Funds [Member] | Level 3 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 0 | 0 | ||||
Fixed Income Funds [Member] | Fair Value Inputs Other [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 0 | 0 | ||||
Fixed Income Funds [Member] | Indiana Michigan Power Co [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 859 | 811.2 | ||||
Fixed Income Funds [Member] | Indiana Michigan Power Co [Member] | Level 1 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 0 | 0 | ||||
Fixed Income Funds [Member] | Indiana Michigan Power Co [Member] | Level 2 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 859 | 811.2 | ||||
Fixed Income Funds [Member] | Indiana Michigan Power Co [Member] | Level 3 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 0 | 0 | ||||
Fixed Income Funds [Member] | Indiana Michigan Power Co [Member] | Fair Value Inputs Other [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 0 | 0 | ||||
Mutual Funds Fixed Income [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Other Temporary Investments | 91.5 | 90.4 | ||||
Mutual Funds Fixed Income [Member] | Level 1 [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Other Temporary Investments | 91.5 | 90.4 | ||||
Mutual Funds Fixed Income [Member] | Level 2 [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Other Temporary Investments | 0 | 0 | ||||
Mutual Funds Fixed Income [Member] | Level 3 [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Other Temporary Investments | 0 | 0 | ||||
Mutual Funds Fixed Income [Member] | Fair Value Inputs Other [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Other Temporary Investments | 0 | 0 | ||||
Domestic [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | [17] | 1,151.4 | 1,126.9 | |||
Domestic [Member] | Level 1 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | [17] | 1,151.4 | 1,126.9 | |||
Domestic [Member] | Level 2 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | [17] | 0 | 0 | |||
Domestic [Member] | Level 3 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | [17] | 0 | 0 | |||
Domestic [Member] | Fair Value Inputs Other [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | [17] | 0 | 0 | |||
Domestic [Member] | Indiana Michigan Power Co [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | [17] | 1,151.4 | 1,126.9 | |||
Domestic [Member] | Indiana Michigan Power Co [Member] | Level 1 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | [17] | 1,151.4 | 1,126.9 | |||
Domestic [Member] | Indiana Michigan Power Co [Member] | Level 2 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | [17] | 0 | 0 | |||
Domestic [Member] | Indiana Michigan Power Co [Member] | Level 3 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | [17] | 0 | 0 | |||
Domestic [Member] | Indiana Michigan Power Co [Member] | Fair Value Inputs Other [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | [17] | 0 | 0 | |||
Mutual Funds Equity [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Other Temporary Investments | [17] | 25.6 | 25.4 | |||
Mutual Funds Equity [Member] | Level 1 [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Other Temporary Investments | [17] | 25.6 | 25.4 | |||
Mutual Funds Equity [Member] | Level 2 [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Other Temporary Investments | [17] | 0 | 0 | |||
Mutual Funds Equity [Member] | Level 3 [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Other Temporary Investments | [17] | 0 | 0 | |||
Mutual Funds Equity [Member] | Fair Value Inputs Other [Member] | ||||||
Assets, Fair Value Disclosure | ||||||
Other Temporary Investments | [17] | 0 | 0 | |||
Cash and Cash Equivalents [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | [18] | 142 | 168.3 | |||
Cash and Cash Equivalents [Member] | Level 1 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | [18] | 135.3 | 160.5 | |||
Cash and Cash Equivalents [Member] | Level 2 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | [18] | 0 | 0 | |||
Cash and Cash Equivalents [Member] | Level 3 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | [18] | 0 | 0 | |||
Cash and Cash Equivalents [Member] | Fair Value Inputs Other [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | [18] | 6.7 | 7.8 | |||
Cash and Cash Equivalents [Member] | Indiana Michigan Power Co [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | [18] | 142 | 168.3 | |||
Cash and Cash Equivalents [Member] | Indiana Michigan Power Co [Member] | Level 1 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | [18] | 135.3 | 160.5 | |||
Cash and Cash Equivalents [Member] | Indiana Michigan Power Co [Member] | Level 2 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | [18] | 0 | 0 | |||
Cash and Cash Equivalents [Member] | Indiana Michigan Power Co [Member] | Level 3 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | [18] | 0 | 0 | |||
Cash and Cash Equivalents [Member] | Indiana Michigan Power Co [Member] | Fair Value Inputs Other [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | [18] | 6.7 | 7.8 | |||
US Government Agencies Debt Securities [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 761.1 | 731.1 | ||||
US Government Agencies Debt Securities [Member] | Level 1 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 0 | 0 | ||||
US Government Agencies Debt Securities [Member] | Level 2 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 761.1 | 731.1 | ||||
US Government Agencies Debt Securities [Member] | Level 3 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 0 | 0 | ||||
US Government Agencies Debt Securities [Member] | Fair Value Inputs Other [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 0 | 0 | ||||
US Government Agencies Debt Securities [Member] | Indiana Michigan Power Co [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 761.1 | 731.1 | ||||
US Government Agencies Debt Securities [Member] | Indiana Michigan Power Co [Member] | Level 1 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 0 | 0 | ||||
US Government Agencies Debt Securities [Member] | Indiana Michigan Power Co [Member] | Level 2 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 761.1 | 731.1 | ||||
US Government Agencies Debt Securities [Member] | Indiana Michigan Power Co [Member] | Level 3 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 0 | 0 | ||||
US Government Agencies Debt Securities [Member] | Indiana Michigan Power Co [Member] | Fair Value Inputs Other [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 0 | 0 | ||||
Corporate Debt [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 68.9 | 57.9 | ||||
Corporate Debt [Member] | Level 1 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 0 | 0 | ||||
Corporate Debt [Member] | Level 2 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 68.9 | 57.9 | ||||
Corporate Debt [Member] | Level 3 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 0 | 0 | ||||
Corporate Debt [Member] | Fair Value Inputs Other [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 0 | 0 | ||||
Corporate Debt [Member] | Indiana Michigan Power Co [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 68.9 | 57.9 | ||||
Corporate Debt [Member] | Indiana Michigan Power Co [Member] | Level 1 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 0 | 0 | ||||
Corporate Debt [Member] | Indiana Michigan Power Co [Member] | Level 2 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 68.9 | 57.9 | ||||
Corporate Debt [Member] | Indiana Michigan Power Co [Member] | Level 3 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 0 | 0 | ||||
Corporate Debt [Member] | Indiana Michigan Power Co [Member] | Fair Value Inputs Other [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 0 | 0 | ||||
State and Local Jurisdiction [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 29 | 22.2 | ||||
State and Local Jurisdiction [Member] | Level 1 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 0 | 0 | ||||
State and Local Jurisdiction [Member] | Level 2 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 29 | 22.2 | ||||
State and Local Jurisdiction [Member] | Level 3 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 0 | 0 | ||||
State and Local Jurisdiction [Member] | Fair Value Inputs Other [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 0 | 0 | ||||
State and Local Jurisdiction [Member] | Indiana Michigan Power Co [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 29 | 22.2 | ||||
State and Local Jurisdiction [Member] | Indiana Michigan Power Co [Member] | Level 1 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 0 | 0 | ||||
State and Local Jurisdiction [Member] | Indiana Michigan Power Co [Member] | Level 2 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 29 | 22.2 | ||||
State and Local Jurisdiction [Member] | Indiana Michigan Power Co [Member] | Level 3 [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 0 | 0 | ||||
State and Local Jurisdiction [Member] | Indiana Michigan Power Co [Member] | Fair Value Inputs Other [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 0 | $ 0 | ||||
Within One Year [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 175.4 | |||||
Within One Year [Member] | Indiana Michigan Power Co [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 175.4 | |||||
One Year To Five Year [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 369.6 | |||||
One Year To Five Year [Member] | Indiana Michigan Power Co [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 369.6 | |||||
Five Year To Ten Year [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 133 | |||||
Five Year To Ten Year [Member] | Indiana Michigan Power Co [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 133 | |||||
After Ten Year [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | 181 | |||||
After Ten Year [Member] | Indiana Michigan Power Co [Member] | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | ||||||
Spent Nuclear Fuel and Decommissioning Trusts | $ 181 | |||||
[1] | Amounts in “Other’’ column primarily represent cash deposits in bank accounts with financial institutions or with third parties. Level 1 and Level 2 amounts primarily represent investments in money market funds. | |||||
[2] | Included in revenues on the condensed statements of income. | |||||
[3] | Represents the change in fair value between the beginning of the reporting period and the settlement of the risk management commodity contract. | |||||
[4] | Represents the settlement of risk management commodity contracts for the reporting period. | |||||
[5] | Represents existing assets or liabilities that were previously categorized as Level 2. | |||||
[6] | Transfers are recognized based on their value at the beginning of the reporting period that the transfer occurred. | |||||
[7] | Represents existing assets or liabilities that were previously categorized as Level 3. | |||||
[8] | Relates to the net gains (losses) of those contracts that are not reflected on the condensed statements of income. These net gains (losses) are recorded as regulatory liabilities/assets. | |||||
[9] | Represents average price of credit default swaps used to calculate counterparty credit risk, reported in basis points. | |||||
[10] | Amounts in “Other’’ column primarily represent counterparty netting of risk management and hedging contracts and associated cash collateral under the accounting guidance for “Derivatives and Hedging.’’ | |||||
[11] | The March 31, 2016 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(5) million in 2016 and $(5) million in periods 2017-2019; Level 2 matures $3 million in 2016, $9 million in periods 2017-2019, $3 million in periods 2020-2021 and $1 million in periods 2022-2032; Level 3 matures $17 million in 2016, $37 million in periods 2017-2019, $21 million in periods 2020-2021 and $69 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. | |||||
[12] | The December 31, 2015 maturity of the net fair value of risk management contracts prior to cash collateral, assets/(liabilities), is as follows: Level 1 matures $(9) million in 2016 and $(4) million in periods 2017-2019; Level 2 matures $2 million in 2016, $18 million in periods 2017-2019 and $4 million in periods 2020-2021; Level 3 matures $28 million in 2016, $29 million in periods 2017-2019, $19 million in periods 2020-2021 and $76 million in periods 2022-2032. Risk management commodity contracts are substantially comprised of power contracts. | |||||
[13] | Represents market prices in dollars per MWh. | |||||
[14] | Includes both affiliated and nonaffiliated transactions. | |||||
[15] | Substantially comprised of power contracts for APCo, I&M and OPCo and coal contracts for PSO and SWEPCo. | |||||
[16] | Primarily represents amounts held for the repayment of debt. | |||||
[17] | Amounts represent publicly traded equity securities and equity-based mutual funds. | |||||
[18] | Amounts in “Other’’ column primarily represent accrued interest receivables from financial institutions. Level 1 amounts primarily represent investments in money market funds. |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Valuation Allowance | $ 130 |
Income Taxes (Textuals) [Abstract] | |
Transmission and Distribution Expenses Net Income Adjustment | 10 |
Public Service Co Of Oklahoma [Member] | |
Income Taxes (Textuals) [Abstract] | |
Transmission and Distribution Expenses Net Income Adjustment | 1 |
Southwestern Electric Power Co [Member] | |
Income Taxes (Textuals) [Abstract] | |
Transmission and Distribution Expenses Net Income Adjustment | $ 5 |
Financing Activities (Details)
Financing Activities (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |||
Apr. 28, 2016 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | ||
Long-term Debt | |||||
Senior Unsecured Notes | $ 14,026.2 | $ 13,629.1 | |||
Pollution Control Bonds | 1,784.1 | 1,784.8 | |||
Notes Payable | 233.6 | 264.7 | |||
Securitization Bonds | 1,863.1 | 2,024 | |||
Spent Nuclear Fuel Obligation | [1] | 265.7 | 265.6 | ||
Other Long-term Debt | 1,609.9 | 1,604.5 | |||
Total Long-term Debt Outstanding | 19,782.6 | 19,572.7 | |||
Long-term Debt Due Within One Year | 2,033.3 | 1,831.8 | |||
Long-term Debt | 17,749.3 | 17,740.9 | |||
Long-term Debt and Other Securities Issued, Retired and Principal Payments Made | |||||
Issuances | [2] | 530.8 | |||
Retirements and Principal Payments | 322.4 | $ 238.8 | |||
Short-term Debt: | |||||
Securitized Debt for Receivables | [3] | 719 | 675 | ||
Commercial Paper | 502 | 125 | |||
Total Short-term Debt | $ 1,221 | $ 800 | |||
Securitized Debt for Receivables | [3],[4] | 0.58% | 0.30% | ||
Comparative Accounts Receivable Information | |||||
Effective Interest Rates on Securitization of Accounts Receivable | 0.58% | 0.26% | |||
Net Uncollectible Accounts Receivable Written Off | $ 5.7 | $ 6.6 | |||
Customer Accounts Receivable Managed Portfolio | |||||
Accounts Receivable Retained Interest and Pledged as Collateral Less Uncollectible Accounts | 849.8 | $ 924.8 | |||
Total Principal Outstanding | 719 | 675 | |||
Delinquent Securitized Accounts Receivable | 52.1 | 48.3 | |||
Bad Debt Reserves Related to Securitization of Accounts Receivable | 20.9 | 17.5 | |||
Unbilled Receivables Related to Securitization of Accounts Receivable | 264 | 357.8 | |||
Financing Activities (Textuals) [Abstract] | |||||
Trust Fund Assets One Time Fee Obligation for Nuclear Fuel Disposition | 309 | $ 309 | |||
Repayments of Long-term Debt | 322.4 | 238.8 | |||
Issuance of Long-term Debt | [2] | 530.8 | |||
Reacquired Pollution Controls Bonds Held by Trustees | $ 554 | ||||
Maximum Percentage Debt to Capitalization | 67.50% | ||||
Total Commitment from Bank Conduits to Finance Receivables | $ 750 | ||||
Commercial Paper [Member] | |||||
Short-term Debt: | |||||
Weighted Average Interest Rate | [4] | 0.77% | 0.81% | ||
AEP Subsidiaries [Member] | |||||
Long-term Debt | |||||
Long-term Debt Due Within One Year | $ 361 | $ 410.4 | |||
Long-term Debt | 1,835.3 | 1,971.4 | |||
AEP Subsidiaries [Member] | Notes Payable [Member] | |||||
Long-term Debt and Other Securities Issued, Retired and Principal Payments Made | |||||
Retirements and Principal Payments | $ 1 | ||||
Interest Rate (Variable) | Variable | ||||
Due Date | 2,017 | ||||
Financing Activities (Textuals) [Abstract] | |||||
Repayments of Long-term Debt | $ 1 | ||||
Due Date | 2,017 | ||||
AEP Generating Co [Member] | Senior Unsecured Notes [Member] | |||||
Long-term Debt and Other Securities Issued, Retired and Principal Payments Made | |||||
Retirements and Principal Payments | $ 3.7 | ||||
Interest Rate (Percentage) | 6.33% | ||||
Due Date | 2,037 | ||||
Financing Activities (Textuals) [Abstract] | |||||
Repayments of Long-term Debt | $ 3.7 | ||||
Due Date | 2,037 | ||||
Appalachian Power Co [Member] | |||||
Long-term Debt | |||||
Total Long-term Debt Outstanding | $ 3,919.3 | 3,930.7 | |||
Long-term Debt Due Within One Year | 318.3 | 318 | |||
Long-term Debt | 3,601 | 3,612.7 | |||
Long-term Debt and Other Securities Issued, Retired and Principal Payments Made | |||||
Retirements and Principal Payments | 136.5 | 11 | |||
Accounts Receivable and Accrued Unbilled Revenues | |||||
Accounts Receivable and Accrued Unbilled Revenues | 136.6 | 135.4 | |||
Fees Paid to AEP Credit for Customer Accounts Receivable Sold | |||||
Fees Paid to AEP Credit for Customer Accounts Receivable Sold | 1.8 | 2.5 | |||
Proceeds from Sale of Receivables | |||||
Proceeds from Sale of Receivables to AEP Credit | 384.4 | 429.6 | |||
Financing Activities (Textuals) [Abstract] | |||||
Repayments of Long-term Debt | $ 136.5 | $ 11 | |||
Maximum Percentage Debt to Capitalization | 67.50% | ||||
Appalachian Power Co [Member] | Utility [Member] | |||||
Money Pool Participants Money Pool Activity And Authorized Borrowing Limits [Abstract] | |||||
Maximum Borrowings from Money Pool | $ 286.9 | ||||
Maximum Loans to Money Pool | 25.7 | ||||
Average Borrowings from Money Pool | 183.2 | ||||
Average Loans to Money Pool | 25.5 | ||||
Net Loans (Borrowings) to/from Utility Money Pool | (146.4) | ||||
Authorized Short Term Borrowing Limit | $ 600 | ||||
Maximum and Minimum Interest Rates [Abstract] | |||||
Maximum Interest Rate | 0.83% | 0.59% | |||
Minimum Interest Rate | 0.69% | 0.39% | |||
Average Interest Rates for Funds Borrowed From and Loaned to Money Pool [Abstract] | |||||
Average Interest Rate For Funds Borrowed | 0.73% | 0.00% | |||
Average Interest Rate For Funds Loaned | 0.73% | 0.45% | |||
Appalachian Power Co [Member] | Pollution Control Bonds [Member] | |||||
Long-term Debt and Other Securities Issued, Retired and Principal Payments Made | |||||
Issuances | [2] | $ 125.3 | |||
Retirements and Principal Payments | $ 125.3 | ||||
Interest Rate (Variable) | Variable | ||||
Due Date | 2,016 | ||||
Financing Activities (Textuals) [Abstract] | |||||
Repayments of Long-term Debt | $ 125.3 | ||||
Issuance of Long-term Debt | [2] | $ 125.3 | |||
Due Date | 2,016 | ||||
Appalachian Power Co [Member] | Securitization Bonds [Member] | |||||
Long-term Debt and Other Securities Issued, Retired and Principal Payments Made | |||||
Retirements and Principal Payments | $ 11.2 | ||||
Interest Rate (Percentage) | 2.008% | ||||
Due Date | 2,024 | ||||
Financing Activities (Textuals) [Abstract] | |||||
Repayments of Long-term Debt | $ 11.2 | ||||
Due Date | 2,024 | ||||
Indiana Michigan Power Co [Member] | |||||
Long-term Debt | |||||
Total Long-term Debt Outstanding | $ 2,366.6 | 2,000 | |||
Long-term Debt Due Within One Year | 151.5 | 162.9 | |||
Long-term Debt | 2,215.1 | 1,837.1 | |||
Long-term Debt and Other Securities Issued, Retired and Principal Payments Made | |||||
Retirements and Principal Payments | 28.8 | $ 25.9 | |||
Accounts Receivable and Accrued Unbilled Revenues | |||||
Accounts Receivable and Accrued Unbilled Revenues | 125.3 | 134.8 | |||
Fees Paid to AEP Credit for Customer Accounts Receivable Sold | |||||
Fees Paid to AEP Credit for Customer Accounts Receivable Sold | 1.9 | 2.4 | |||
Proceeds from Sale of Receivables | |||||
Proceeds from Sale of Receivables to AEP Credit | 388.1 | 419.6 | |||
Financing Activities (Textuals) [Abstract] | |||||
Repayments of Long-term Debt | 28.8 | $ 25.9 | |||
Reacquired Pollution Controls Bonds Held by Trustees | $ 40 | ||||
Maximum Percentage Debt to Capitalization | 67.50% | ||||
Indiana Michigan Power Co [Member] | Utility [Member] | |||||
Money Pool Participants Money Pool Activity And Authorized Borrowing Limits [Abstract] | |||||
Maximum Borrowings from Money Pool | $ 369.1 | ||||
Maximum Loans to Money Pool | 62.5 | ||||
Average Borrowings from Money Pool | 267.3 | ||||
Average Loans to Money Pool | 17 | ||||
Net Loans (Borrowings) to/from Utility Money Pool | 2.8 | ||||
Authorized Short Term Borrowing Limit | $ 500 | ||||
Maximum and Minimum Interest Rates [Abstract] | |||||
Maximum Interest Rate | 0.83% | 0.59% | |||
Minimum Interest Rate | 0.69% | 0.39% | |||
Average Interest Rates for Funds Borrowed From and Loaned to Money Pool [Abstract] | |||||
Average Interest Rate For Funds Borrowed | 0.72% | 0.46% | |||
Average Interest Rate For Funds Loaned | 0.74% | 0.46% | |||
Indiana Michigan Power Co [Member] | Notes Payable Two [Member] | |||||
Long-term Debt and Other Securities Issued, Retired and Principal Payments Made | |||||
Retirements and Principal Payments | $ 0.3 | ||||
Interest Rate (Variable) | 0.0212 | ||||
Due Date | 2,016 | ||||
Financing Activities (Textuals) [Abstract] | |||||
Repayments of Long-term Debt | $ 0.3 | ||||
Due Date | 2,016 | ||||
Indiana Michigan Power Co [Member] | Notes Payable Three [Member] | |||||
Long-term Debt and Other Securities Issued, Retired and Principal Payments Made | |||||
Retirements and Principal Payments | $ 6.9 | ||||
Interest Rate (Variable) | Variable | ||||
Due Date | 2,017 | ||||
Financing Activities (Textuals) [Abstract] | |||||
Repayments of Long-term Debt | $ 6.9 | ||||
Due Date | 2,017 | ||||
Indiana Michigan Power Co [Member] | Notes Payable Four [Member] | |||||
Long-term Debt and Other Securities Issued, Retired and Principal Payments Made | |||||
Retirements and Principal Payments | $ 10.2 | ||||
Interest Rate (Variable) | Variable | ||||
Due Date | 2,019 | ||||
Financing Activities (Textuals) [Abstract] | |||||
Repayments of Long-term Debt | $ 10.2 | ||||
Due Date | 2,019 | ||||
Indiana Michigan Power Co [Member] | Notes Payable Five [Member] | |||||
Long-term Debt and Other Securities Issued, Retired and Principal Payments Made | |||||
Retirements and Principal Payments | $ 10.7 | ||||
Interest Rate (Variable) | Variable | ||||
Due Date | 2,019 | ||||
Financing Activities (Textuals) [Abstract] | |||||
Repayments of Long-term Debt | $ 10.7 | ||||
Due Date | 2,019 | ||||
Indiana Michigan Power Co [Member] | Other Long Term Debt [Member] | |||||
Long-term Debt and Other Securities Issued, Retired and Principal Payments Made | |||||
Retirements and Principal Payments | $ 0.3 | ||||
Interest Rate (Percentage) | 6.00% | ||||
Due Date | 2,025 | ||||
Financing Activities (Textuals) [Abstract] | |||||
Repayments of Long-term Debt | $ 0.3 | ||||
Due Date | 2,025 | ||||
Indiana Michigan Power Co [Member] | Senior Unsecured Notes [Member] | |||||
Long-term Debt and Other Securities Issued, Retired and Principal Payments Made | |||||
Issuances | [2] | $ 400 | |||
Interest Rate (Percentage) | 4.55% | ||||
Due Date | 2,046 | ||||
Financing Activities (Textuals) [Abstract] | |||||
Issuance of Long-term Debt | [2] | $ 400 | |||
Due Date | 2,046 | ||||
Indiana Michigan Power Co [Member] | Notes Payable [Member] | |||||
Long-term Debt and Other Securities Issued, Retired and Principal Payments Made | |||||
Retirements and Principal Payments | $ 0.4 | ||||
Interest Rate (Variable) | Variable | ||||
Due Date | 2,016 | ||||
Financing Activities (Textuals) [Abstract] | |||||
Repayments of Long-term Debt | $ 0.4 | ||||
Due Date | 2,016 | ||||
Indiana Michigan Power Co [Member] | Notes Payable [Member] | Subsequent Event [Member] | |||||
Long-term Debt and Other Securities Issued, Retired and Principal Payments Made | |||||
Retirements and Principal Payments | $ 13 | ||||
Financing Activities (Textuals) [Abstract] | |||||
Repayments of Long-term Debt | 13 | ||||
Ohio Power Co [Member] | |||||
Long-term Debt | |||||
Total Long-term Debt Outstanding | $ 2,135.5 | 2,157.7 | |||
Long-term Debt Due Within One Year | 395.6 | 395.9 | |||
Long-term Debt | 1,739.9 | 1,761.8 | |||
Long-term Debt and Other Securities Issued, Retired and Principal Payments Made | |||||
Retirements and Principal Payments | 22.8 | $ 22.2 | |||
Accounts Receivable and Accrued Unbilled Revenues | |||||
Accounts Receivable and Accrued Unbilled Revenues | 339 | 351.4 | |||
Fees Paid to AEP Credit for Customer Accounts Receivable Sold | |||||
Fees Paid to AEP Credit for Customer Accounts Receivable Sold | 7.9 | 8 | |||
Proceeds from Sale of Receivables | |||||
Proceeds from Sale of Receivables to AEP Credit | 646.6 | 715 | |||
Financing Activities (Textuals) [Abstract] | |||||
Repayments of Long-term Debt | 22.8 | $ 22.2 | |||
Reacquired Pollution Controls Bonds Held by Trustees | 345 | ||||
Ohio Power Co [Member] | Utility [Member] | |||||
Money Pool Participants Money Pool Activity And Authorized Borrowing Limits [Abstract] | |||||
Maximum Borrowings from Money Pool | 0 | ||||
Maximum Loans to Money Pool | 379.2 | ||||
Average Borrowings from Money Pool | 0 | ||||
Average Loans to Money Pool | 304.7 | ||||
Net Loans (Borrowings) to/from Utility Money Pool | 221.9 | ||||
Authorized Short Term Borrowing Limit | $ 400 | ||||
Maximum and Minimum Interest Rates [Abstract] | |||||
Maximum Interest Rate | 0.83% | 0.59% | |||
Minimum Interest Rate | 0.69% | 0.39% | |||
Average Interest Rates for Funds Borrowed From and Loaned to Money Pool [Abstract] | |||||
Average Interest Rate For Funds Borrowed | 0.00% | 0.00% | |||
Average Interest Rate For Funds Loaned | 0.73% | 0.46% | |||
Ohio Power Co [Member] | Securitization Bonds [Member] | |||||
Long-term Debt and Other Securities Issued, Retired and Principal Payments Made | |||||
Retirements and Principal Payments | $ 22.8 | ||||
Interest Rate (Percentage) | 0.958% | ||||
Due Date | 2,018 | ||||
Financing Activities (Textuals) [Abstract] | |||||
Repayments of Long-term Debt | $ 22.8 | ||||
Due Date | 2,018 | ||||
Public Service Co Of Oklahoma [Member] | |||||
Long-term Debt | |||||
Total Long-term Debt Outstanding | $ 1,286.3 | 1,286.1 | |||
Long-term Debt Due Within One Year | 275.4 | 275.4 | |||
Long-term Debt | 1,010.9 | 1,010.7 | |||
Long-term Debt and Other Securities Issued, Retired and Principal Payments Made | |||||
Retirements and Principal Payments | 0.1 | $ 0.1 | |||
Accounts Receivable and Accrued Unbilled Revenues | |||||
Accounts Receivable and Accrued Unbilled Revenues | 94.5 | 116.1 | |||
Fees Paid to AEP Credit for Customer Accounts Receivable Sold | |||||
Fees Paid to AEP Credit for Customer Accounts Receivable Sold | 1.4 | 1.4 | |||
Proceeds from Sale of Receivables | |||||
Proceeds from Sale of Receivables to AEP Credit | 272.1 | 302.5 | |||
Financing Activities (Textuals) [Abstract] | |||||
Repayments of Long-term Debt | $ 0.1 | $ 0.1 | |||
Maximum Percentage Debt to Capitalization | 67.50% | ||||
Public Service Co Of Oklahoma [Member] | Utility [Member] | |||||
Money Pool Participants Money Pool Activity And Authorized Borrowing Limits [Abstract] | |||||
Maximum Borrowings from Money Pool | $ 0 | ||||
Maximum Loans to Money Pool | 91 | ||||
Average Borrowings from Money Pool | 0 | ||||
Average Loans to Money Pool | 48.7 | ||||
Net Loans (Borrowings) to/from Utility Money Pool | 8.4 | ||||
Authorized Short Term Borrowing Limit | $ 300 | ||||
Maximum and Minimum Interest Rates [Abstract] | |||||
Maximum Interest Rate | 0.83% | 0.59% | |||
Minimum Interest Rate | 0.69% | 0.39% | |||
Average Interest Rates for Funds Borrowed From and Loaned to Money Pool [Abstract] | |||||
Average Interest Rate For Funds Borrowed | 0.00% | 0.49% | |||
Average Interest Rate For Funds Loaned | 0.72% | 0.44% | |||
Public Service Co Of Oklahoma [Member] | Other Long Term Debt [Member] | |||||
Long-term Debt and Other Securities Issued, Retired and Principal Payments Made | |||||
Retirements and Principal Payments | $ 0.1 | ||||
Interest Rate (Percentage) | 3.00% | ||||
Due Date | 2,027 | ||||
Financing Activities (Textuals) [Abstract] | |||||
Repayments of Long-term Debt | $ 0.1 | ||||
Due Date | 2,027 | ||||
Southwestern Electric Power Co [Member] | |||||
Long-term Debt | |||||
Total Long-term Debt Outstanding | $ 2,272.4 | 2,273.5 | |||
Long-term Debt Due Within One Year | 253.3 | 3.3 | |||
Long-term Debt | 2,019.1 | 2,270.2 | |||
Long-term Debt and Other Securities Issued, Retired and Principal Payments Made | |||||
Retirements and Principal Payments | 1.6 | $ 55.1 | |||
Accounts Receivable and Accrued Unbilled Revenues | |||||
Accounts Receivable and Accrued Unbilled Revenues | 121.2 | $ 151.8 | |||
Fees Paid to AEP Credit for Customer Accounts Receivable Sold | |||||
Fees Paid to AEP Credit for Customer Accounts Receivable Sold | 1.5 | 1.7 | |||
Proceeds from Sale of Receivables | |||||
Proceeds from Sale of Receivables to AEP Credit | 336.1 | 373.2 | |||
Financing Activities (Textuals) [Abstract] | |||||
Repayments of Long-term Debt | $ 1.6 | $ 55.1 | |||
Maximum Percentage Debt to Capitalization | 67.50% | ||||
Southwestern Electric Power Co [Member] | Utility [Member] | |||||
Money Pool Participants Money Pool Activity And Authorized Borrowing Limits [Abstract] | |||||
Maximum Borrowings from Money Pool | $ 221.8 | ||||
Maximum Loans to Money Pool | 0 | ||||
Average Borrowings from Money Pool | 148 | ||||
Average Loans to Money Pool | 0 | ||||
Net Loans (Borrowings) to/from Utility Money Pool | (217.8) | ||||
Authorized Short Term Borrowing Limit | $ 350 | ||||
Maximum and Minimum Interest Rates [Abstract] | |||||
Maximum Interest Rate | 0.83% | 0.59% | |||
Minimum Interest Rate | 0.69% | 0.39% | |||
Average Interest Rates for Funds Borrowed From and Loaned to Money Pool [Abstract] | |||||
Average Interest Rate For Funds Borrowed | 0.73% | 0.46% | |||
Average Interest Rate For Funds Loaned | 0.00% | 0.52% | |||
Southwestern Electric Power Co [Member] | Nonutility [Member] | |||||
Money Pool Participants Money Pool Activity And Authorized Borrowing Limits [Abstract] | |||||
Maximum Loans to Money Pool | $ 2 | ||||
Average Loans to Money Pool | 2 | ||||
Net Loans (Borrowings) to/from Utility Money Pool | $ 2 | ||||
Maximum and Minimum Interest Rates [Abstract] | |||||
Maximum Interest Rate | 0.83% | ||||
Minimum Interest Rate | 0.69% | ||||
Average Interest Rates for Funds Borrowed From and Loaned to Money Pool [Abstract] | |||||
Average Interest Rate For Funds Loaned | 0.73% | ||||
Southwestern Electric Power Co [Member] | Notes Payable [Member] | |||||
Long-term Debt and Other Securities Issued, Retired and Principal Payments Made | |||||
Retirements and Principal Payments | $ 1.6 | ||||
Interest Rate (Percentage) | 4.58% | ||||
Due Date | 2,032 | ||||
Financing Activities (Textuals) [Abstract] | |||||
Repayments of Long-term Debt | $ 1.6 | ||||
Due Date | 2,032 | ||||
AEP Texas Central Co [Member] | Securitization Bonds [Member] | |||||
Long-term Debt and Other Securities Issued, Retired and Principal Payments Made | |||||
Retirements and Principal Payments | $ 44.2 | ||||
Interest Rate (Percentage) | 6.25% | ||||
Due Date | 2,016 | ||||
Financing Activities (Textuals) [Abstract] | |||||
Repayments of Long-term Debt | $ 44.2 | ||||
Due Date | 2,016 | ||||
AEP Texas Central Co [Member] | Securitization Bonds Two [Member] | |||||
Long-term Debt and Other Securities Issued, Retired and Principal Payments Made | |||||
Retirements and Principal Payments | $ 83.7 | ||||
Interest Rate (Percentage) | 5.17% | ||||
Due Date | 2,018 | ||||
Financing Activities (Textuals) [Abstract] | |||||
Repayments of Long-term Debt | $ 83.7 | ||||
Due Date | 2,018 | ||||
Transource Missouri [Member] | Other Long Term Debt [Member] | |||||
Long-term Debt and Other Securities Issued, Retired and Principal Payments Made | |||||
Issuances | [2] | $ 5.5 | |||
Interest Rate (Variable) | Variable | ||||
Due Date | 2,018 | ||||
Financing Activities (Textuals) [Abstract] | |||||
Issuance of Long-term Debt | [2] | $ 5.5 | |||
Due Date | 2,018 | ||||
Transource Missouri [Member] | Other Long Term Debt [Member] | Subsequent Event [Member] | |||||
Long-term Debt and Other Securities Issued, Retired and Principal Payments Made | |||||
Issuances | $ 6 | ||||
Due Date | 2,018 | ||||
Financing Activities (Textuals) [Abstract] | |||||
Issuance of Long-term Debt | $ 6 | ||||
Due Date | 2,018 | ||||
[1] | Pursuant to the Nuclear Waste Policy Act of 1982, I&M, a nuclear licensee, has an obligation to the United States Department of Energy for spent nuclear fuel disposal. The obligation includes a one-time fee for nuclear fuel consumed prior to April 7, 1983. Trust fund assets related to this obligation were $309 million and $309 million as of March 31, 2016 and December 31, 2015, respectively, and are included in Spent Nuclear Fuel and Decommissioning Trusts on the condensed balance sheets. | ||||
[2] | Amounts indicated on the statements of cash flows are net of issuance costs and premium or discount and will not tie to the issuance amounts. | ||||
[3] | Amount of securitized debt for receivables as accounted for under the “Transfers and Servicing” accounting guidance. | ||||
[4] | Weighted average rate. |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |||
Variable Interest Entities (Textuals) [Abstract] | |||||
Securitization Bonds | $ 1,863.1 | $ 2,024 | |||
Securitized Transition Assets | $ 1,689.2 | 1,749.9 | |||
Percentage Ownership of "Allegheny Series" by a Nonaffiliated Company | 100.00% | ||||
Protected Cell Of Energy Insurance Services, Inc. [Member] | |||||
Variable Interest Entities (Textuals) [Abstract] | |||||
Insurance Premium Expense to Protected Cell | $ 13 | $ 14 | |||
Protected Cell Of Energy Insurance Services, Inc. [Member] | Current Assets [Member] | |||||
ASSETS | |||||
Assets | 172.5 | 165.3 | |||
Protected Cell Of Energy Insurance Services, Inc. [Member] | Net Property Plant And Equipment [Member] | |||||
ASSETS | |||||
Assets | 0 | 0 | |||
Protected Cell Of Energy Insurance Services, Inc. [Member] | Other Non Current Assets [Member] | |||||
ASSETS | |||||
Assets | 2 | 1.9 | |||
Protected Cell Of Energy Insurance Services, Inc. [Member] | Total Assets [Member] | |||||
ASSETS | |||||
Assets | 174.5 | 167.2 | |||
Protected Cell Of Energy Insurance Services, Inc. [Member] | Current Liabilities [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 48.8 | 41.8 | |||
Protected Cell Of Energy Insurance Services, Inc. [Member] | Noncurrent Liabilities [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 81.8 | 83.9 | |||
Protected Cell Of Energy Insurance Services, Inc. [Member] | Equity [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 43.9 | 41.5 | |||
Protected Cell Of Energy Insurance Services, Inc. [Member] | Total Liabilities And Equity [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 174.5 | 167.2 | |||
Transource Energy [Member] | |||||
Variable Interest Entities (Textuals) [Abstract] | |||||
Proceeds from Partnership Contribution | 8 | 47 | |||
Transource Energy [Member] | Current Assets [Member] | |||||
ASSETS | |||||
Assets | 13.6 | 10.8 | |||
Transource Energy [Member] | Net Property Plant And Equipment [Member] | |||||
ASSETS | |||||
Assets | 253.1 | 227.2 | |||
Transource Energy [Member] | Other Non Current Assets [Member] | |||||
ASSETS | |||||
Assets | 6.3 | 5.5 | |||
Transource Energy [Member] | Total Assets [Member] | |||||
ASSETS | |||||
Assets | 273 | 243.5 | |||
Transource Energy [Member] | Current Liabilities [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 44.5 | 36.6 | |||
Transource Energy [Member] | Noncurrent Liabilities [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 118.7 | 113 | |||
Transource Energy [Member] | Equity [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 109.8 | 93.9 | |||
Transource Energy [Member] | Total Liabilities And Equity [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | $ 273 | 243.5 | |||
AEP Credit, Inc. [Member] | |||||
Variable Interest Entities (Textuals) [Abstract] | |||||
Minimum Percentage of Equity AEP Provides | 5.00% | ||||
Percentage of Short Term Borrowing Needs in Excess of Third Party Financings | 20.00% | ||||
AEP Credit, Inc. [Member] | Current Assets [Member] | |||||
ASSETS | |||||
Assets | $ 850.4 | 925.7 | |||
AEP Credit, Inc. [Member] | Net Property Plant And Equipment [Member] | |||||
ASSETS | |||||
Assets | 0 | 0 | |||
AEP Credit, Inc. [Member] | Other Non Current Assets [Member] | |||||
ASSETS | |||||
Assets | 7.6 | 6.4 | |||
AEP Credit, Inc. [Member] | Total Assets [Member] | |||||
ASSETS | |||||
Assets | 858 | 932.1 | |||
AEP Credit, Inc. [Member] | Current Liabilities [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 781.9 | 855.1 | |||
AEP Credit, Inc. [Member] | Noncurrent Liabilities [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 0.4 | 0.3 | |||
AEP Credit, Inc. [Member] | Equity [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 75.7 | 76.7 | |||
AEP Credit, Inc. [Member] | Total Liabilities And Equity [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | $ 858 | 932.1 | |||
PATH West Virginia Transmission Co, LLC [Member] | |||||
Variable Interest Entities (Textuals) [Abstract] | |||||
Percentage of Debt Capital Structure in PATH's Stipulation Agreement | 50.00% | ||||
Percentage of Equity Capital Structure in PATH's Stipulation Agreement | 50.00% | ||||
Percentage of Cost of Long Term Debt for PATH's Stipulation Agreement | 4.70% | ||||
PATH West Virginia Transmission Co, LLC [Member] | Capital Contribution From Parent [Member] | |||||
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract] | |||||
As Reported on the Consolidated Balance Sheet | $ 18.8 | 18.8 | |||
Maximum Exposure | 18.8 | 18.8 | |||
PATH West Virginia Transmission Co, LLC [Member] | Retained Earnings [Member] | |||||
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract] | |||||
As Reported on the Consolidated Balance Sheet | 2.2 | 2.2 | |||
Maximum Exposure | 2.2 | 2.2 | |||
PATH West Virginia Transmission Co, LLC [Member] | Total Investment [Member] | |||||
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract] | |||||
As Reported on the Consolidated Balance Sheet | 21 | 21 | |||
Maximum Exposure | 21 | 21 | |||
AEP Texas Central Transition Funding Co [Member] | |||||
Variable Interest Entities (Textuals) [Abstract] | |||||
Securitization Bonds | 1,400 | 1,500 | |||
Securitized Transition Assets | 1,300 | 1,300 | |||
AEP Texas Central Transition Funding Co [Member] | Current Assets [Member] | |||||
ASSETS | |||||
Assets | 139.4 | 234.1 | |||
AEP Texas Central Transition Funding Co [Member] | Net Property Plant And Equipment [Member] | |||||
ASSETS | |||||
Assets | 0 | 0 | |||
AEP Texas Central Transition Funding Co [Member] | Other Non Current Assets [Member] | |||||
ASSETS | |||||
Assets | 1,316.8 | [1] | 1,365.7 | [2] | |
Variable Interest Entities (Textuals) [Abstract] | |||||
Intercompany Item Eliminated in Consolidation | 66.6 | 68.2 | |||
AEP Texas Central Transition Funding Co [Member] | Total Assets [Member] | |||||
ASSETS | |||||
Assets | 1,456.2 | 1,599.8 | |||
AEP Texas Central Transition Funding Co [Member] | Current Liabilities [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 238 | 291.7 | |||
AEP Texas Central Transition Funding Co [Member] | Noncurrent Liabilities [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 1,200.1 | 1,290 | |||
AEP Texas Central Transition Funding Co [Member] | Equity [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 18.1 | 18.1 | |||
AEP Texas Central Transition Funding Co [Member] | Total Liabilities And Equity [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | $ 1,456.2 | 1,599.8 | |||
Great Plains Energy Inc. [Member] | Transource Energy [Member] | |||||
Variable Interest Entities (Textuals) [Abstract] | |||||
Equity and Voting Ownership Percentage | 13.50% | ||||
Cleco Power, LLC [Member] | |||||
Variable Interest Entities (Textuals) [Abstract] | |||||
Percentage of VIE Sales of Lignite Produced | 50.00% | ||||
Appalachian Power Co [Member] | |||||
Variable Interest Entities (Textuals) [Abstract] | |||||
Securitized Transition Assets | $ 322.4 | 328 | |||
Appalachian Power Co [Member] | Billings from AEP Service Corporation [Member] | |||||
Variable Interest Entities (Textuals) [Abstract] | |||||
Billings from VIE | 56.6 | 48.2 | |||
Appalachian Power Co [Member] | Carrying Amount in AEP Service Corporation's Accounts Payable [Member] | |||||
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract] | |||||
As Reported on the Consolidated Balance Sheet | 21.1 | 25.8 | |||
Maximum Exposure | 21.1 | 25.8 | |||
Appalachian Power Co [Member] | Appalachian Consumer Rate Relief Funding [Member] | |||||
Variable Interest Entities (Textuals) [Abstract] | |||||
Securitization Bonds | 330 | 342 | |||
Securitized Transition Assets | 322 | 328 | |||
Appalachian Power Co [Member] | Appalachian Consumer Rate Relief Funding [Member] | Current Assets [Member] | |||||
ASSETS | |||||
Assets | 10.8 | 18.5 | |||
Appalachian Power Co [Member] | Appalachian Consumer Rate Relief Funding [Member] | Net Property Plant And Equipment [Member] | |||||
ASSETS | |||||
Assets | 0 | 0 | |||
Appalachian Power Co [Member] | Appalachian Consumer Rate Relief Funding [Member] | Other Non Current Assets [Member] | |||||
ASSETS | |||||
Assets | 326.2 | [3] | 332 | [4] | |
Variable Interest Entities (Textuals) [Abstract] | |||||
Intercompany Item Eliminated in Consolidation | 3.9 | 4 | |||
Appalachian Power Co [Member] | Appalachian Consumer Rate Relief Funding [Member] | Total Assets [Member] | |||||
ASSETS | |||||
Assets | 337 | 350.5 | |||
Appalachian Power Co [Member] | Appalachian Consumer Rate Relief Funding [Member] | Current Liabilities [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 24.8 | 27.1 | |||
Appalachian Power Co [Member] | Appalachian Consumer Rate Relief Funding [Member] | Noncurrent Liabilities [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 310.9 | 321.5 | |||
Appalachian Power Co [Member] | Appalachian Consumer Rate Relief Funding [Member] | Equity [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 1.3 | 1.9 | |||
Appalachian Power Co [Member] | Appalachian Consumer Rate Relief Funding [Member] | Total Liabilities And Equity [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 337 | 350.5 | |||
Indiana Michigan Power Co [Member] | DCC Fuel [Member] | |||||
Variable Interest Entities (Textuals) [Abstract] | |||||
Payments Made by I&M to DCC Fuel | 29 | 23 | |||
Indiana Michigan Power Co [Member] | DCC Fuel [Member] | Current Assets [Member] | |||||
ASSETS | |||||
Assets | 79.6 | 91.1 | |||
Indiana Michigan Power Co [Member] | DCC Fuel [Member] | Net Property Plant And Equipment [Member] | |||||
ASSETS | |||||
Assets | 129 | 159.9 | |||
Indiana Michigan Power Co [Member] | DCC Fuel [Member] | Other Non Current Assets [Member] | |||||
ASSETS | |||||
Assets | 67.7 | 84.6 | |||
Indiana Michigan Power Co [Member] | DCC Fuel [Member] | Total Assets [Member] | |||||
ASSETS | |||||
Assets | 276.3 | 335.6 | |||
Indiana Michigan Power Co [Member] | DCC Fuel [Member] | Current Liabilities [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 73.4 | 84.8 | |||
Indiana Michigan Power Co [Member] | DCC Fuel [Member] | Noncurrent Liabilities [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 202.9 | 250.8 | |||
Indiana Michigan Power Co [Member] | DCC Fuel [Member] | Equity [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 0 | 0 | |||
Indiana Michigan Power Co [Member] | DCC Fuel [Member] | Total Liabilities And Equity [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 276.3 | 335.6 | |||
Indiana Michigan Power Co [Member] | Billings from AEP Service Corporation [Member] | |||||
Variable Interest Entities (Textuals) [Abstract] | |||||
Billings from VIE | 35 | 33.5 | |||
Indiana Michigan Power Co [Member] | Billings from AEP Generating Company [Member] | |||||
Variable Interest Entities (Textuals) [Abstract] | |||||
Billings from VIE | 45 | 55 | |||
Indiana Michigan Power Co [Member] | Carrying Amount in AEP Service Corporation's Accounts Payable [Member] | |||||
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract] | |||||
As Reported on the Consolidated Balance Sheet | 11.6 | 16.6 | |||
Maximum Exposure | 11.6 | 16.6 | |||
Indiana Michigan Power Co [Member] | Carrying Amount in AEP Generating Company's Accounts Payable [Member] | |||||
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract] | |||||
As Reported on the Consolidated Balance Sheet | 13 | 17 | |||
Ohio Power Co [Member] | |||||
Variable Interest Entities (Textuals) [Abstract] | |||||
Securitized Transition Assets | 79.9 | 85.9 | |||
Ohio Power Co [Member] | Billings from AEP Service Corporation [Member] | |||||
Variable Interest Entities (Textuals) [Abstract] | |||||
Billings from VIE | 44.5 | 39.2 | |||
Ohio Power Co [Member] | Carrying Amount in AEP Service Corporation's Accounts Payable [Member] | |||||
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract] | |||||
As Reported on the Consolidated Balance Sheet | 14.9 | 23.3 | |||
Maximum Exposure | 14.9 | 23.3 | |||
Ohio Power Co [Member] | Ohio Phase-In-Recovery Funding [Member] | |||||
Variable Interest Entities (Textuals) [Abstract] | |||||
Securitization Bonds | 163 | 185 | |||
Securitized Transition Assets | 80 | 86 | |||
Ohio Power Co [Member] | Ohio Phase-In-Recovery Funding [Member] | Current Assets [Member] | |||||
ASSETS | |||||
Assets | 18.8 | 31.2 | |||
Ohio Power Co [Member] | Ohio Phase-In-Recovery Funding [Member] | Net Property Plant And Equipment [Member] | |||||
ASSETS | |||||
Assets | 0 | 0 | |||
Ohio Power Co [Member] | Ohio Phase-In-Recovery Funding [Member] | Other Non Current Assets [Member] | |||||
ASSETS | |||||
Assets | 150.6 | [5] | 162 | [6] | |
Variable Interest Entities (Textuals) [Abstract] | |||||
Intercompany Item Eliminated in Consolidation | 70.7 | 76.1 | |||
Ohio Power Co [Member] | Ohio Phase-In-Recovery Funding [Member] | Total Assets [Member] | |||||
ASSETS | |||||
Assets | 169.4 | 193.2 | |||
Ohio Power Co [Member] | Ohio Phase-In-Recovery Funding [Member] | Current Liabilities [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 46.2 | 47.3 | |||
Ohio Power Co [Member] | Ohio Phase-In-Recovery Funding [Member] | Noncurrent Liabilities [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 121.9 | 144.6 | |||
Ohio Power Co [Member] | Ohio Phase-In-Recovery Funding [Member] | Equity [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 1.3 | 1.3 | |||
Ohio Power Co [Member] | Ohio Phase-In-Recovery Funding [Member] | Total Liabilities And Equity [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 169.4 | 193.2 | |||
Public Service Co Of Oklahoma [Member] | Billings from AEP Service Corporation [Member] | |||||
Variable Interest Entities (Textuals) [Abstract] | |||||
Billings from VIE | 28.5 | 23.5 | |||
Public Service Co Of Oklahoma [Member] | Carrying Amount in AEP Service Corporation's Accounts Payable [Member] | |||||
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract] | |||||
As Reported on the Consolidated Balance Sheet | 9.1 | 12.6 | |||
Maximum Exposure | 9.1 | 12.6 | |||
Southwestern Electric Power Co [Member] | Sabine Mining Co [Member] | |||||
Variable Interest Entities (Textuals) [Abstract] | |||||
Billings from VIE | 41 | 42 | |||
Southwestern Electric Power Co [Member] | Sabine Mining Co [Member] | Current Assets [Member] | |||||
ASSETS | |||||
Assets | 59.6 | 61.7 | |||
Southwestern Electric Power Co [Member] | Sabine Mining Co [Member] | Net Property Plant And Equipment [Member] | |||||
ASSETS | |||||
Assets | 140.4 | 147 | |||
Southwestern Electric Power Co [Member] | Sabine Mining Co [Member] | Other Non Current Assets [Member] | |||||
ASSETS | |||||
Assets | 62.8 | 61.8 | |||
Southwestern Electric Power Co [Member] | Sabine Mining Co [Member] | Total Assets [Member] | |||||
ASSETS | |||||
Assets | 262.8 | 270.5 | |||
Southwestern Electric Power Co [Member] | Sabine Mining Co [Member] | Current Liabilities [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 37.3 | 47.7 | |||
Southwestern Electric Power Co [Member] | Sabine Mining Co [Member] | Noncurrent Liabilities [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 225.1 | 222.3 | |||
Southwestern Electric Power Co [Member] | Sabine Mining Co [Member] | Equity [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 0.4 | 0.5 | |||
Southwestern Electric Power Co [Member] | Sabine Mining Co [Member] | Total Liabilities And Equity [Member] | |||||
LIABILITIES AND EQUITY | |||||
Liabilities and Equity | 262.8 | $ 270.5 | |||
Southwestern Electric Power Co [Member] | Dolet Hills Lignite Co, LLC [Member] | |||||
Variable Interest Entities (Textuals) [Abstract] | |||||
Billings from VIE | $ 15 | 15 | |||
Percentage of VIE Sales of Lignite Produced | 50.00% | ||||
Percentage of DHLCs Debt Guaranteed by Each SWEPCo and CLECO | 50.00% | ||||
Percentage of Management Fee Received by SWEPCo from DHLC | 100.00% | ||||
Southwestern Electric Power Co [Member] | Dolet Hills Lignite Co, LLC [Member] | Capital Contribution From Parent [Member] | |||||
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract] | |||||
As Reported on the Consolidated Balance Sheet | $ 7.6 | $ 7.6 | |||
Maximum Exposure | 7.6 | 7.6 | |||
Southwestern Electric Power Co [Member] | Dolet Hills Lignite Co, LLC [Member] | Retained Earnings [Member] | |||||
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract] | |||||
As Reported on the Consolidated Balance Sheet | 8.7 | 7.7 | |||
Maximum Exposure | 8.7 | 7.7 | |||
Southwestern Electric Power Co [Member] | Dolet Hills Lignite Co, LLC [Member] | SWEPCo's Guarantee Of Debt [Member] | |||||
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract] | |||||
As Reported on the Consolidated Balance Sheet | 0 | 0 | |||
Maximum Exposure | 87.4 | 82.9 | |||
Southwestern Electric Power Co [Member] | Dolet Hills Lignite Co, LLC [Member] | Total Investment [Member] | |||||
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract] | |||||
As Reported on the Consolidated Balance Sheet | 16.3 | 15.3 | |||
Maximum Exposure | 103.7 | 98.2 | |||
Southwestern Electric Power Co [Member] | Billings from AEP Service Corporation [Member] | |||||
Variable Interest Entities (Textuals) [Abstract] | |||||
Billings from VIE | 36.7 | $ 31.5 | |||
Southwestern Electric Power Co [Member] | Carrying Amount in AEP Service Corporation's Accounts Payable [Member] | |||||
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract] | |||||
As Reported on the Consolidated Balance Sheet | 12.6 | 16.4 | |||
Maximum Exposure | $ 12.6 | $ 16.4 | |||
AEP Generating Co [Member] | Rockport Generating Plant (Unit No. 1) [Member] | |||||
Variable Interest Entities (Textuals) [Abstract] | |||||
Jointly Owned Utility Plant, Proportionate Ownership Share | 50.00% | ||||
AEP Generating Co [Member] | Rockport Generating Plant (Unit No. 2) [Member] | |||||
Variable Interest Entities (Textuals) [Abstract] | |||||
Percentage Interest in Rockport Plant Unit 2 Lease | 50.00% | ||||
AEP Generating Co [Member] | Lawrenceburg Generating Station [Member] | |||||
Variable Interest Entities (Textuals) [Abstract] | |||||
Jointly Owned Utility Plant, Proportionate Ownership Share | 100.00% | ||||
Transource Energy [Member] | |||||
Variable Interest Entities (Textuals) [Abstract] | |||||
Equity and Voting Ownership Percentage | 86.50% | ||||
[1] | Includes an intercompany item eliminated in consolidation of $66.6 million. | ||||
[2] | Includes an intercompany item eliminated in consolidation of $68.2 million. | ||||
[3] | Includes an intercompany item eliminated in consolidation of $3.9 million. | ||||
[4] | Includes an intercompany item eliminated in consolidation of $4.0 million. | ||||
[5] | Includes an intercompany item eliminated in consolidation of $70.7 million. | ||||
[6] | Includes an intercompany item eliminated in consolidation of $76.1 million. |