Document_and_Entity_Informatio
Document and Entity Information (USD $) | 6 Months Ended | |
In Millions, except Share data, unless otherwise specified | Jun. 30, 2014 | Jul. 31, 2014 |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'Nevada Power Company | ' |
Entity Central Index Key | '0000071180 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Entity Voluntary Filers | 'No | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 1,000 |
Entity Public Float | $0 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Jun-14 | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $168 | $126 |
Accounts receivable, net | 376 | 227 |
Inventories | 72 | 73 |
Regulatory assets | 62 | 81 |
Deferred income taxes | 128 | 152 |
Other current assets | 38 | 39 |
Total current assets | 844 | 698 |
Property, plant and equipment, net | 6,966 | 6,992 |
Regulatory assets | 1,008 | 1,057 |
Other assets | 87 | 88 |
Total assets | 8,905 | 8,835 |
Current liabilities: | ' | ' |
Accounts payable | 228 | 240 |
Accrued interest | 60 | 61 |
Accrued property, income and other taxes | 27 | 29 |
Accrued employee expenses | 15 | 6 |
Regulatory liabilities | 60 | 74 |
Current portion of long-term debt | 259 | 22 |
Customer deposits and other | 89 | 74 |
Total current liabilities | 738 | 506 |
Long-term debt | 3,316 | 3,555 |
Regulatory liabilities | 322 | 312 |
Deferred income taxes | 1,312 | 1,298 |
Other long-term liabilities | 258 | 274 |
Total liabilities | 5,946 | 5,945 |
Commitments and contingencies (Note 9) | ' | ' |
Shareholder's equity: | ' | ' |
Common stock - $1.00 stated value, 1,000 shares authorized, issued and outstanding | 0 | 0 |
Other paid-in capital | 2,308 | 2,308 |
Retained earnings | 654 | 586 |
Accumulated other comprehensive loss, net | -3 | -4 |
Total shareholder's equity | 2,959 | 2,890 |
Total liabilities and shareholder's equity | $8,905 | $8,835 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Common stock, stated value | $1 | $1 |
Common stock, shares authorized | 1,000 | 1,000 |
Common stock, shares issued | 1,000 | 1,000 |
Common stock, shares outstanding | 1,000 | 1,000 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Income Statement [Abstract] | ' | ' | ' | ' |
Operating revenue | $595 | $536 | $1,012 | $906 |
Operating costs and expenses: | ' | ' | ' | ' |
Cost of fuel, energy and capacity | 284 | 209 | 487 | 351 |
Operating and maintenance expense | 87 | 104 | 169 | 203 |
Depreciation and amortization | 69 | 65 | 135 | 130 |
Property and other taxes | 10 | 10 | 21 | 20 |
Merger related expenses | 0 | 9 | 0 | 9 |
Total operating costs and expenses | 450 | 397 | 812 | 713 |
Operating income | 145 | 139 | 200 | 193 |
Other income (expense): | ' | ' | ' | ' |
Interest expense, net of allowance for debt funds | -52 | -53 | -103 | -106 |
Allowance for equity funds | 0 | 2 | 0 | 4 |
Other, net | 4 | 3 | 10 | 8 |
Total other income (expense) | -48 | -48 | -93 | -94 |
Income before income tax expense | 97 | 91 | 107 | 99 |
Income tax expense | 35 | 32 | 39 | 35 |
Net income | $62 | $59 | $68 | $64 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Shareholder's Equity (USD $) | Total | Common Stock | Other Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss, Net |
In Millions, except Share data, unless otherwise specified | |||||
Balance at Dec. 31, 2012 | $2,923 | $0 | $2,308 | $619 | ($4) |
Balance (shares) at Dec. 31, 2012 | ' | 1,000 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' |
Net income | 64 | ' | ' | 64 | ' |
Dividends declared | -80 | ' | ' | -80 | ' |
Balance at Jun. 30, 2013 | 2,907 | 0 | 2,308 | 603 | -4 |
Balance (shares) at Jun. 30, 2013 | ' | 1,000 | ' | ' | ' |
Balance at Dec. 31, 2013 | 2,890 | 0 | 2,308 | 586 | -4 |
Balance (shares) at Dec. 31, 2013 | 1,000 | 1,000 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' |
Net income | 68 | ' | ' | 68 | ' |
Other | 1 | ' | ' | ' | 1 |
Balance at Jun. 30, 2014 | $2,959 | $0 | $2,308 | $654 | ($3) |
Balance (shares) at Jun. 30, 2014 | 1,000 | 1,000 | ' | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 6 Months Ended | |
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Cash flows from operating activities: | ' | ' |
Net income | $68 | $64 |
Adjustments to reconcile net income to net cash flows from operating activities: | ' | ' |
Depreciation and amortization | 135 | 130 |
Allowance for equity funds | 0 | -4 |
Deferred income taxes and amortization of investment tax credits | 39 | 35 |
Amortization of other regulatory assets | 66 | -3 |
Other, net | 21 | 14 |
Changes in other operating assets and liabilities: | ' | ' |
Accounts receivable and other assets | -201 | -138 |
Inventories | 1 | 0 |
Accounts payable and other liabilities | 19 | 32 |
Net cash flows from operating activities | 148 | 130 |
Cash flows from investing activities: | ' | ' |
Capital expenditures | -97 | -107 |
Net cash flows from investing activities | -97 | -107 |
Cash flows from financing activities: | ' | ' |
Repayment of long-term debt | -9 | -2 |
Dividends paid | 0 | -80 |
Net cash flows from financing activities | -9 | -82 |
Net change in cash and cash equivalents | 42 | -59 |
Cash and cash equivalents at beginning of period | 126 | 201 |
Cash and cash equivalents at end of period | $168 | $142 |
New_Accounting_Pronouncements_
New Accounting Pronouncements (Notes) | 6 Months Ended |
Jun. 30, 2014 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ' |
Accounting Changes [Text Block] | ' |
New Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, which creates FASB Accounting Standards Codification ("ASC") Topic 606, "Revenue from Contracts with Customers" and supersedes ASC Topic 605, "Revenue Recognition." The guidance replaces industry-specific guidance and establishes a single five-step model to identify and recognize revenue. The core principle of the guidance is that an entity should recognize revenue upon transfer of control of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. Additionally, the guidance requires the entity to disclose further quantitative and qualitative information regarding the nature and amount of revenues arising from contracts with customers, as well as other information about the significant judgments and estimates used in recognizing revenues from contracts with customers. This guidance is effective for interim and annual reporting periods beginning after December 15, 2016. Early application is not permitted. This guidance may be adopted retrospectively or under a modified retrospective method where the cumulative effect is recognized at the date of initial application. The Company is currently evaluating the impact of adopting this guidance on its Consolidated Financial Statements and disclosures included within Notes to Consolidated Financial Statements. | |
In February 2013, the FASB issued ASU No. 2013-04, which amends FASB ASC Topic 405, "Liabilities." The amendments in this guidance require an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date as the amount the reporting entity agreed to pay plus any additional amounts the reporting entity expects to pay on behalf of its co-obligor. Additionally, the guidance requires the entity to disclose the nature and amount of the obligation, as well as other information about those obligations. This guidance is effective for interim and annual reporting periods beginning after December 15, 2013. The Company adopted this guidance on January 1, 2014. The adoption of this guidance did not have a material impact on the Company's disclosures included within Notes to Consolidated Financial Statements. |
Organization_and_Operations_No
Organization and Operations (Notes) | 6 Months Ended |
Jun. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Organization and Operations | ' |
Organization and Operations | |
Nevada Power Company, together with its subsidiaries (collectively, the "Company"), is a wholly owned subsidiary of NV Energy, Inc. ("NV Energy"), a holding company that also owns Sierra Pacific Power Company ("Sierra Pacific") and certain other subsidiaries. The Company is a United States utility company serving electric retail customers, including residential, commercial and industrial customers, primarily in the Las Vegas, North Las Vegas, Henderson and adjoining areas. NV Energy is an indirect wholly owned subsidiary of Berkshire Hathaway Energy Company ("BHE"). BHE is a holding company based in Des Moines, Iowa that owns subsidiaries principally engaged in energy businesses. BHE is a consolidated subsidiary of Berkshire Hathaway Inc. | |
The unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and the United States Securities and Exchange Commission's rules and regulations for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the disclosures required by GAAP for annual financial statements. Management believes the unaudited Consolidated Financial Statements contain all adjustments (consisting only of normal recurring adjustments) considered necessary for the fair presentation of the unaudited Consolidated Financial Statements as of June 30, 2014 and for the three- and six-month periods ended June 30, 2014 and 2013. Certain amounts in the prior periods Consolidated Statement of Operations have been reclassified to conform to the current period's presentation. Such reclassifications did not impact previously reported net income. The results of operations for the three- and six-month periods ended June 30, 2014 are not necessarily indicative of the results to be expected for the full year. | |
The preparation of the unaudited Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited Consolidated Financial Statements and the reported amounts of revenue and expenses during the period. Actual results may differ from the estimates used in preparing the unaudited Consolidated Financial Statements. Note 2 of Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013 describes the most significant accounting policies used in the preparation of the unaudited Consolidated Financial Statements. There have been no significant changes in the Company's assumptions regarding significant accounting estimates and policies during the six-month period ended June 30, 2014. |
Property_Plant_and_Equipment_N
Property, Plant and Equipment, Net (Notes) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Property, Plant and Equipment, Net [Abstract] | ' | |||||||
Property, Plant and Equipment, Net | ' | |||||||
Property, Plant and Equipment, Net | ||||||||
Property, plant and equipment, net consists of the following (in millions): | ||||||||
As of | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
Utility plant in-service: | ||||||||
Generation | $ | 3,823 | $ | 3,789 | ||||
Distribution | 2,982 | 2,936 | ||||||
Transmission | 1,769 | 1,743 | ||||||
General and intangible plant | 684 | 645 | ||||||
Utility plant in-service | 9,258 | 9,113 | ||||||
Accumulated depreciation and amortization | (2,329 | ) | (2,217 | ) | ||||
Utility plant in-service, net | 6,929 | 6,896 | ||||||
Other non-regulated, net of accumulated depreciation and amortization | 4 | 3 | ||||||
6,933 | 6,899 | |||||||
Construction work-in-progress | 33 | 93 | ||||||
Property, plant and equipment, net | $ | 6,966 | $ | 6,992 | ||||
Regulatory_Matters_Notes
Regulatory Matters (Notes) | 6 Months Ended |
Jun. 30, 2014 | |
Regulatory Assets and Liabilities Disclosure [Abstract] | ' |
Regulatory Matters | ' |
Regulatory Matters | |
Energy Efficiency Implementation Rates | |
The PUCN's final order approving the merger between BHE and NV Energy stipulated that the Company will not seek recovery of any lost revenue for calendar year 2014 in an amount that exceeds 50% of the lost revenue that the Company could otherwise request. In February 2014, the Company filed an application with the PUCN to reset the energy efficiency implementation rate. In June 2014, the PUCN accepted a stipulation to adjust the energy efficiency implementation rate, as of July 1, 2014, to collect 50% of the estimated lost revenue that the Company would otherwise be allowed to recover for the 2014 calendar year. The energy efficiency implementation rate will be effective from July through December 2014 and will reset on January 1, 2015 and remain in effect through September 2015. To the extent the Company's earned rate of return exceeds the rate of return used to set base general rates, the Company is required to refund to customers energy efficiency implementation rate revenue collected. As a result, the Company has deferred recognition of energy efficiency implementation rate revenue collected and has recorded a liability of $7 million on the Consolidated Balance Sheets as of June 30, 2014. | |
General Rate Case | |
In May 2014, the Company filed a general rate case with the PUCN. In July 2014, the Company made its certification filing, which requests incremental annual revenue relief in the amount of $38 million, or an average price increase of 2%. An order is expected by the end of 2014 and, if approved, the new rates would be effective January 1, 2015. | |
2013 FERC Transmission Rate Case | |
In May 2013, the Company, along with Sierra Pacific, filed an application with the FERC to establish single system transmission and ancillary service rates. The combined filing requested incremental rate relief of $17 million annually to be effective January 1, 2014. On August 5, 2013, the FERC granted the companies' request for a rate effective date of January 1, 2014 subject to refund, and set the case for hearing or settlement discussions. On January 1, 2014, the Company implemented the filed rates in this case subject to refund as set forth in FERC's order. As of June 30, 2014, the Company accrued $7 million for amounts subject to rate refund, which is included in customer deposits and other on the Consolidated Balance Sheets. At this time management is unable to determine the final revenue impact of the case. |
Recent_Financing_Transactions_
Recent Financing Transactions (Notes) | 6 Months Ended |
Jun. 30, 2014 | |
Recent Financing Transactions [Abstract] | ' |
Short-term Debt [Text Block] | ' |
Recent Financing Transactions | |
Credit Facility | |
In June 2014, the Company amended its $500 million secured credit facility expiring in March 2017, reducing the amount available to $400 million and extending the maturity date to March 2018. The amended facility has a variable interest rate based on the London Interbank Offered Rate or a base rate, at the Company's option, plus a spread that varies based upon the Company's secured debt credit rating. The amended facility requires that the Company's ratio of consolidated debt, including current maturities, to total capitalization not exceed 0.68 to 1.0 as of the last day of each quarter. |
Employee_Benefit_Plans_Notes
Employee Benefit Plans (Notes) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Compensation and Retirement Disclosure [Abstract] | ' | |||||||
Retirement Plan and Postretirement Benefits | ' | |||||||
Employee Benefit Plans | ||||||||
The Company is a participant in benefit plans sponsored by NV Energy. The NV Energy Retirement Plan includes a qualified pension plan ("Qualified Pension Plan") and a supplemental executive retirement plan and a restoration plan (collectively, "Non-Qualified Pension Plans") that provide pension benefits for eligible employees. The NV Energy Comprehensive Welfare Benefit and Cafeteria Plan provides certain postretirement health care and life insurance benefits for eligible retirees ("Other Postretirement Plans") on behalf of the Company. Amounts attributable to the Company were allocated from NV Energy based upon the current, or in the case of retirees, previous, employment location. Offsetting regulatory assets and liabilities have been recorded related to the amounts not yet recognized as a component of net periodic benefit costs that will be included in regulated rates. Net periodic benefit costs not included in regulated rates are included in accumulated other comprehensive income. | ||||||||
Amounts receivable from (payable to) NV Energy are included on the Consolidated Balance Sheets and consist of the following (in millions): | ||||||||
As of | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
Qualified Pension Plan: | ||||||||
Other assets | $ | 10 | $ | 13 | ||||
Non-Qualified Pension Plans: | ||||||||
Customer deposits and other | (4 | ) | (4 | ) | ||||
Other long-term liabilities | (5 | ) | (8 | ) | ||||
Other Postretirement Plans: | ||||||||
Other long-term liabilities | (8 | ) | (7 | ) |
Risk_Management_Notes
Risk Management (Notes) | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ||||||||||||
Risk Management | ' | ||||||||||||
Risk Management and Hedging Activities | |||||||||||||
The Company is exposed to the impact of market fluctuations in commodity prices and interest rates. The Company is principally exposed to electricity, natural gas, coal, and other commodity price risk as it has an obligation to serve retail customer load in its service territory. The Company's load and generating facilities represent substantial underlying commodity positions. Exposures to commodity prices consist mainly of variations in the price of fuel required to generate electricity and wholesale electricity that is purchased and sold. Commodity prices are subject to wide price swings as supply and demand are impacted by, among many other unpredictable items, weather, market liquidity, generating facility availability, customer usage, storage, and transmission and transportation constraints. The actual cost of fuel and purchased power are recoverable through the deferred energy mechanism. Interest rate risk exists on variable-rate debt and future debt issuances. The Company does not engage in proprietary trading activities. | |||||||||||||
The Company has established a risk management process that is designed to identify, assess, monitor, report, manage and mitigate each of the various types of risk involved in its business. To mitigate a portion of its commodity price risk, the Company uses commodity derivative contracts, which may include forwards, options, swaps and other agreements, to effectively secure future supply or sell future production, generally at fixed prices. The Company manages its interest rate risk by limiting its exposure to variable interest rates primarily through the issuance of fixed-rate long-term debt and by monitoring market changes in interest rates. Additionally, the Company may from time to time enter into interest rate derivative contracts, such as interest rate swaps or locks, to mitigate the Company's exposure to interest rate risk. The Company does not hedge all of its commodity price and interest rate risks, thereby exposing the unhedged portion to changes in market prices. | |||||||||||||
There have been no significant changes in the Company's accounting policies related to derivatives. Refer to Note 8 for additional information on derivative contracts. | |||||||||||||
The following table, which excludes contracts that have been designated as normal under the normal purchases or normal sales exception afforded by GAAP, summarizes the fair value of the Company's derivative contracts, on a gross basis, and reconciles those amounts to the amounts presented on a net basis on the Consolidated Balance Sheets (in millions): | |||||||||||||
Customer | Other | ||||||||||||
Deposits and | Long-term | ||||||||||||
Other | Liabilities | Total | |||||||||||
As of June 30, 2014 | |||||||||||||
Commodity liabilities(1) | $ | (9 | ) | $ | (24 | ) | $ | (33 | ) | ||||
As of December 31, 2013 | |||||||||||||
Commodity liabilities(1) | $ | (9 | ) | $ | (38 | ) | $ | (47 | ) | ||||
-1 | The Company's commodity derivatives not designated as hedging contracts are included in regulated rates and as of June 30, 2014 and December 31, 2013, a regulatory asset of $33 million and $47 million, respectively, was recorded related to the derivative liability of $33 million and $47 million, respectively. | ||||||||||||
Derivative Contract Volumes | |||||||||||||
The following table summarizes the net notional amounts of outstanding derivative contracts with indexed and fixed price terms that comprise the mark-to-market values as of (in millions): | |||||||||||||
Unit of | June 30, | December 31, | |||||||||||
Measure | 2014 | 2013 | |||||||||||
Electricity sales | Megawatt hours | (4 | ) | (4 | ) | ||||||||
Natural gas purchases | Decatherms | 108 | 118 | ||||||||||
Credit Risk | |||||||||||||
The Company extends unsecured credit to other utilities, energy marketing companies, financial institutions and other market participants in conjunction with its wholesale energy supply and marketing activities. Credit risk relates to the risk of loss that might occur as a result of nonperformance by counterparties on their contractual obligations to make or take delivery of electricity, natural gas or other commodities and to make financial settlements of these obligations. Credit risk may be concentrated to the extent that one or more groups of counterparties have similar economic, industry or other characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in market or other conditions. In addition, credit risk includes not only the risk that a counterparty may default due to circumstances relating directly to it, but also the risk that a counterparty may default due to circumstances involving other market participants that have a direct or indirect relationship with the counterparty. | |||||||||||||
The Company analyzes the financial condition of each significant wholesale counterparty before entering into any transactions, establishes limits on the amount of unsecured credit to be extended to each counterparty and evaluates the appropriateness of unsecured credit limits on an ongoing basis. To mitigate exposure to the financial risks of wholesale counterparties, the Company enters into netting and collateral arrangements that may include margining and cross-product netting agreements and obtains third-party guarantees, letters of credit and cash deposits. Counterparties may be assessed fees for delayed payments. If required, the Company exercises rights under these arrangements, including calling on the counterparty's credit support arrangement. | |||||||||||||
Collateral and Contingent Features | |||||||||||||
In accordance with industry practice, certain wholesale derivative contracts contain credit support provisions that in part base certain collateral requirements on credit ratings for unsecured debt as reported by one or more of the three recognized credit rating agencies. These derivative contracts may either specifically provide rights to demand cash or other security in the event of a credit rating downgrade ("credit-risk-related contingent features") or provide the right for counterparties to demand "adequate assurance," in the event of a material adverse change in creditworthiness. These rights can vary by contract and by counterparty. As of June 30, 2014, credit ratings from the three recognized credit rating agencies were investment grade. | |||||||||||||
The aggregate fair value of the Company's derivative contracts in liability positions with specific credit-risk-related contingent features was $4 million, which represents the amount of collateral to be posted if all credit risk related contingent features for derivative contracts in liability positions had been triggered. The Company's collateral requirements could fluctuate considerably due to market price volatility, changes in credit ratings, changes in legislation or regulation or other factors. |
Fair_Value_Measurements_Notes
Fair Value Measurements (Notes) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Fair Value of Financial Instruments | ' | |||||||||||||||
Fair Value Measurements | ||||||||||||||||
The carrying value of the Company's cash, certain cash equivalents, receivables, investments held in Rabbi trusts, payables, accrued liabilities and short-term borrowings approximates fair value because of the short-term maturity of these instruments. The Company has various financial assets and liabilities that are measured at fair value on the Consolidated Financial Statements using inputs from the three levels of the fair value hierarchy. A financial asset or liability classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The three levels are as follows: | ||||||||||||||||
• | Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. | |||||||||||||||
• | Level 2 - Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). | |||||||||||||||
• | Level 3 - Unobservable inputs reflect the Company's judgments about the assumptions market participants would use in pricing the asset or liability since limited market data exists. The Company develops these inputs based on the best information available, including its own data. | |||||||||||||||
The Company's commodity derivative contracts are valued using a market approach that uses quoted forward commodity prices for similar assets and liabilities, which incorporates a mid-market pricing convention (the mid-point price between bid and ask prices) as a practical expedient for valuing its assets and liabilities measured and reported at fair value. Interest rate swaps are valued using a financial model which utilizes observable inputs for similar instruments based primarily on market price curves. The determination of the fair value for derivative instruments not only includes counterparty risk, but also the impact of the Company's nonperformance risk on its liabilities, which as of June 30, 2014 and December 31, 2013, had an immaterial impact to the fair value of its derivative instruments. As such, the Company considers its commodity derivative contracts to be valued using Level 3 inputs. | ||||||||||||||||
The following table reconciles the beginning and ending balances of the Company's commodity liabilities measured at fair value on a recurring basis using significant Level 3 inputs (in millions): | ||||||||||||||||
Three-Month Period | Six-Month Period | |||||||||||||||
Ended June 30, 2014 | Ended June 30, 2014 | |||||||||||||||
Beginning balance | $ | (35 | ) | $ | (47 | ) | ||||||||||
Changes in fair value recognized in regulatory assets | — | 12 | ||||||||||||||
Purchases | — | (1 | ) | |||||||||||||
Settlements | 2 | 3 | ||||||||||||||
Ending balance | $ | (33 | ) | $ | (33 | ) | ||||||||||
The Company's long-term debt is carried at cost on the Consolidated Financial Statements. The fair value of the Company's long-term debt is a Level 2 fair value measurement and has been estimated based upon quoted market prices, where available, or at the present value of future cash flows discounted at rates consistent with comparable maturities with similar credit risks. The carrying value of the Company's variable-rate long-term debt approximates fair value because of the frequent repricing of these instruments at market rates. The following table presents the carrying value and estimated fair value of the Company's long-term debt (in millions): | ||||||||||||||||
As of June 30, 2014 | As of December 31, 2013 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
Value | Value | Value | Value | |||||||||||||
Long-term debt | $ | 3,066 | $ | 3,699 | $ | 3,071 | $ | 3,596 | ||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Notes) | 6 Months Ended | |
Jun. 30, 2014 | ||
Commitments and Contingencies Disclosure [Abstract] | ' | |
Commitments and Contingencies | ' | |
Commitments and Contingencies | ||
Environmental Laws and Regulations | ||
The Company is subject to federal, state and local laws and regulations regarding air and water quality, renewable portfolio standards, emissions performance standards, climate change, coal combustion byproduct disposal, hazardous and solid waste disposal, protected species and other environmental matters that have the potential to impact the Company's current and future operations. The Company believes it is in material compliance with all applicable laws and regulations. | ||
In June 2013, the Nevada State Legislature passed Senate Bill No. 123, which included, in significant part: | ||
• | Accelerating the plan to retire 800 MWs of coal plants, starting as soon as December 31, 2014; | |
• | Replacement of such coal plants by issuing requests for proposals for the procurement of 300 MWs from renewable facilities; | |
• | Construction or acquisition and ownership of 50 MWs of electric generating capacity from renewable facilities; | |
• | Construction or acquisition and ownership of 550 MWs of additional electric generating capacity; and | |
• | Assuring regulatory procedures that protect reliability and supply and address financial impacts on customer and utility. | |
In February 2014, the PUCN issued a final order approving draft regulations, subject to review by a Nevada Legislative commission and which must be filed with the Secretary of State, and the regulations became effective March 2014. In May 2014, the Company filed its Emission Reduction Capacity Replacement Plan proposing, among other items, the retirement of Reid Gardner Generating Station units 1, 2 and 3 in 2014 and unit 4 in 2017; the elimination of the Company's ownership interest in Navajo Generating Station in 2019; and a plan to replace the generation capacity being retired, as required by Senate Bill No. 123. The Emissions Reduction and Capacity Replacement Plan includes the issuance of requests for proposals for 300 MW of renewable energy to be issued between 2014 and 2016; the acquisition of a 274-MW natural gas co-generating facility in 2014; the acquisition of a 222-MW natural gas peaking facility in 2014; the construction of a 15-MW solar photovoltaic facility expected to be placed in-service in 2015; and the construction of a 200-MW solar photovoltaic facility expected to be placed in-service in 2016. In the second quarter of 2014, the Company executed various contractual agreements to fulfill the proposed Emissions Reduction and Capacity Replacement Plan, which are subject to PUCN approval. The PUCN has scheduled a hearing on the application beginning in September 2014 and an order is expected in the fourth quarter of 2014. | ||
Reid Gardner Generation Station | ||
In October 2011, the Company received a request for information from the Environmental Protection Agency Region 9 under Section 114 of the Clean Air Act requesting current and historical operations and capital project information for the Company's Reid Gardner Generating Station located near Moapa, Nevada. The Environmental Protection Agency's Section 114 information request does not allege any incidents of non-compliance at the plant, and there have been no other new enforcement-related proceedings that have been initiated by the Environmental Protection Agency relating to the plant. The Company completed its responses to the Environmental Protection Agency during the first quarter of 2012 and will continue to monitor developments relating to this Section 114 request. At this time, the Company cannot predict the impact, if any, associated with this information request. | ||
Legal Matters | ||
The Company is party to a variety of legal actions arising out of the normal course of business. Plaintiffs occasionally seek punitive or exemplary damages. The Company does not believe that such normal and routine litigation will have a material impact on its consolidated financial results. The Company is also involved in other kinds of legal actions, some of which assert or may assert claims or seek to impose fines, penalties and other costs in substantial amounts and are described below. | ||
November 2005 Land Investors | ||
In 2006, November 2005 Land Investors, LLC ("NLI") purchased from the United States through the Bureau of Land Management 2,675 acres of land located in North Las Vegas, Nevada. A small portion of the land is traversed by a 500 kilovolt transmission line owned by the Company and sited pursuant to a pre-existing right-of-way grant from the Bureau of Land Management. Subsequent to NLI's purchase, a dispute arose as to whether the Company owed rent and, if it did, the amount owed to NLI under the right-of-way grant. NLI eventually "terminated" the right-of-way grant and brought claims against the Company for breach of contract, inverse condemnation and trespass. The Company counterclaimed for express condemnation of a perpetual easement over the right-of-way corridor. The matter proceeded to trial in the Eighth Judicial District Court, Clark County, Nevada ("Eighth District Court"). In September 2013, the Eighth District Court awarded NLI $1 million for unpaid rent and $5 million for inverse condemnation, plus interest and attorneys' fees, bringing the total judgment to $12 million. The Eighth District Court also found the Company was entitled to judgment in its favor on its counterclaim for condemnation of the right-of-way corridor. The Company has posted the required bond of $6 million and has subsequently appealed to the Nevada Supreme Court. Management cannot assess or predict the outcome of the case at this time. | ||
Sierra Club and Moapa Band of Paiute Indians | ||
In August 2013, the Sierra Club and Moapa Band of Paiute Indians filed a complaint in federal district court in Nevada against the Company and California Department of Water Resources, alleging that activities at the Reid Gardner Generating Station are causing imminent and substantial harm to the environment and that placement of coal combustion residuals at the on-site landfill constitute "open dumping" in violation of the Resource Conservation and Recovery Act. The complaint also alleges that the Reid Gardner Generating Station is engaged in the unlawful discharge of pollutants in violation of the Clean Water Act. The notice was issued pursuant to the citizen suit provisions of the Resource Conservation and Recovery Act and the Clean Water Act. CDWR was named as a co-defendant in the litigation due to its prior co-ownership in Reid Gardner Generating Station unit 4. The complaint seeks various injunctive remedies, assessment of civil penalties, and reimbursement of plaintiffs' attorney and legal fees and costs. The Company answered the complaint and intends to vigorously defend the suit. Given the stage of the proceeding, management cannot predict the impact to the Company, or estimate the range of loss. |
Property_Plant_and_Equipment_N1
Property, Plant and Equipment, Net (Tables) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Property, Plant and Equipment, Net [Abstract] | ' | |||||||
Property, Plant, and Equipment, Net | ' | |||||||
Property, plant and equipment, net consists of the following (in millions): | ||||||||
As of | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
Utility plant in-service: | ||||||||
Generation | $ | 3,823 | $ | 3,789 | ||||
Distribution | 2,982 | 2,936 | ||||||
Transmission | 1,769 | 1,743 | ||||||
General and intangible plant | 684 | 645 | ||||||
Utility plant in-service | 9,258 | 9,113 | ||||||
Accumulated depreciation and amortization | (2,329 | ) | (2,217 | ) | ||||
Utility plant in-service, net | 6,929 | 6,896 | ||||||
Other non-regulated, net of accumulated depreciation and amortization | 4 | 3 | ||||||
6,933 | 6,899 | |||||||
Construction work-in-progress | 33 | 93 | ||||||
Property, plant and equipment, net | $ | 6,966 | $ | 6,992 | ||||
Employee_Benefit_Plans_Tables
Employee Benefit Plans (Tables) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Compensation and Retirement Disclosure [Abstract] | ' | |||||||
Schedule of Amounts Recognized in Balance Sheet | ' | |||||||
Amounts receivable from (payable to) NV Energy are included on the Consolidated Balance Sheets and consist of the following (in millions): | ||||||||
As of | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
Qualified Pension Plan: | ||||||||
Other assets | $ | 10 | $ | 13 | ||||
Non-Qualified Pension Plans: | ||||||||
Customer deposits and other | (4 | ) | (4 | ) | ||||
Other long-term liabilities | (5 | ) | (8 | ) | ||||
Other Postretirement Plans: | ||||||||
Other long-term liabilities | (8 | ) | (7 | ) |
Risk_Management_Risk_Managemen
Risk Management Risk Management and Hedging Activities (Tables) (Tables) | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | ' | ||||||||||||
The following table, which excludes contracts that have been designated as normal under the normal purchases or normal sales exception afforded by GAAP, summarizes the fair value of the Company's derivative contracts, on a gross basis, and reconciles those amounts to the amounts presented on a net basis on the Consolidated Balance Sheets (in millions): | |||||||||||||
Customer | Other | ||||||||||||
Deposits and | Long-term | ||||||||||||
Other | Liabilities | Total | |||||||||||
As of June 30, 2014 | |||||||||||||
Commodity liabilities(1) | $ | (9 | ) | $ | (24 | ) | $ | (33 | ) | ||||
As of December 31, 2013 | |||||||||||||
Commodity liabilities(1) | $ | (9 | ) | $ | (38 | ) | $ | (47 | ) | ||||
-1 | The Company's commodity derivatives not designated as hedging contracts are included in regulated rates and as of June 30, 2014 and December 31, 2013, a regulatory asset of $33 million and $47 million, respectively, was recorded related to the derivative liability of $33 million and $47 million, respectively. | ||||||||||||
Schedule of Notional Amounts of Outstanding Derivative Positions [Table Text Block] | ' | ||||||||||||
The following table summarizes the net notional amounts of outstanding derivative contracts with indexed and fixed price terms that comprise the mark-to-market values as of (in millions): | |||||||||||||
Unit of | June 30, | December 31, | |||||||||||
Measure | 2014 | 2013 | |||||||||||
Electricity sales | Megawatt hours | (4 | ) | (4 | ) | ||||||||
Natural gas purchases | Decatherms | 108 | 118 | ||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | ' | |||||||||||||||
The following table reconciles the beginning and ending balances of the Company's commodity liabilities measured at fair value on a recurring basis using significant Level 3 inputs (in millions): | ||||||||||||||||
Three-Month Period | Six-Month Period | |||||||||||||||
Ended June 30, 2014 | Ended June 30, 2014 | |||||||||||||||
Beginning balance | $ | (35 | ) | $ | (47 | ) | ||||||||||
Changes in fair value recognized in regulatory assets | — | 12 | ||||||||||||||
Purchases | — | (1 | ) | |||||||||||||
Settlements | 2 | 3 | ||||||||||||||
Ending balance | $ | (33 | ) | $ | (33 | ) | ||||||||||
Fair Value, by Balance Sheet Grouping | ' | |||||||||||||||
The following table presents the carrying value and estimated fair value of the Company's long-term debt (in millions): | ||||||||||||||||
As of June 30, 2014 | As of December 31, 2013 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
Value | Value | Value | Value | |||||||||||||
Long-term debt | $ | 3,066 | $ | 3,699 | $ | 3,071 | $ | 3,596 | ||||||||
Property_Plant_and_Equipment_N2
Property, Plant and Equipment, Net (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Utility plant in-service: | ' | ' |
Utility plant in-service, net | $6,933 | $6,899 |
Construction work-in-progress | 33 | 93 |
Property, plant and equipment, net | 6,966 | 6,992 |
Regulated Operation [Member] | ' | ' |
Utility plant in-service: | ' | ' |
Generation | 3,823 | 3,789 |
Distribution | 2,982 | 2,936 |
Transmission | 1,769 | 1,743 |
General and intangible plant | 684 | 645 |
Utility plant in-service | 9,258 | 9,113 |
Accumulated depreciation and amortization | -2,329 | -2,217 |
Utility plant in-service, net | 6,929 | 6,896 |
Unregulated Operation [Member] | ' | ' |
Utility plant in-service: | ' | ' |
Utility plant in-service, net | $4 | $3 |
Regulatory_Matters_General_Dis
Regulatory Matters - General Disclosures (Details) (USD $) | Jun. 30, 2014 | 31-May-14 | Jun. 30, 2014 | Jul. 31, 2014 | Jun. 30, 2014 |
In Millions, unless otherwise specified | PUCN [Member] | Federal Energy Regulatory Commission [Member] | Federal Energy Regulatory Commission [Member] | Subsequent Event [Member] | MEHC Merger [Member] |
PUCN [Member] | |||||
Public Utilities, General Disclosures [Line Items] | ' | ' | ' | ' | ' |
Recovery of loss on revenues | ' | ' | ' | ' | 50.00% |
Customer Refund Liability, Current | $7 | ' | $7 | ' | ' |
Public Utilities, Requested Rate Increase (Decrease), Amount | ' | $17 | ' | $38 | ' |
Public Utilities, Requested Rate Increase (Decrease), Percentage | ' | ' | ' | 2.00% | ' |
Recent_Financing_Transactions_1
Recent Financing Transactions (Details) (Line of Credit [Member], USD $) | Jun. 30, 2014 |
In Millions, unless otherwise specified | |
Secured credit facility, $500 million, expiring March 2017 [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Line of credit facility, borrowing capacity replaced | $500 |
Senior unsecured credit facility, $400 million, expiring March 2018 [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Line of credit facility, maximum borrowing capacity | $400 |
Debt to capitalization ratio | 0.68 |
Employee_Benefit_Plans_Details
Employee Benefit Plans (Details) (NV Energy, Inc. [Member], USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Qualified Pension Plan [Member] | Other assets [Member] | ' | ' |
Amounts Recognized in Balance Sheet [Abstract] | ' | ' |
Other assets | $10 | $13 |
Non-Qualified Pension Plans [Member] | Customer deposits and other [Member] | ' | ' |
Amounts Recognized in Balance Sheet [Abstract] | ' | ' |
Customer deposits and other | -4 | -4 |
Non-Qualified Pension Plans [Member] | Other long-term liabilities [Member] | ' | ' |
Amounts Recognized in Balance Sheet [Abstract] | ' | ' |
Other long-term liabilities | -5 | -8 |
Other Postretirement Plans [Member] | Other long-term liabilities [Member] | ' | ' |
Amounts Recognized in Balance Sheet [Abstract] | ' | ' |
Other long-term liabilities | ($8) | ($7) |
Risk_Management_and_Hedging_Ac
Risk Management and Hedging Activities - Balance Sheet Location (Details) (Commodity Contract [Member], USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative, Net Liability Position, Aggregate Fair Value | $4 | ' |
Not Designated as Hedging Instrument [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Net Regulatory Asset (Liability), Unrealized Loss (Gain) On Derivative Contracts | 33 | 47 |
Derivative Liability, Fair Value, Gross Liability | -33 | -47 |
Derivative, Fair Value, Net | -33 | -47 |
Not Designated as Hedging Instrument [Member] | Other Noncurrent Assets [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative Liability, Fair Value, Gross Liability | -9 | -9 |
Not Designated as Hedging Instrument [Member] | Other long-term liabilities [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative Liability, Fair Value, Gross Liability | ($24) | ($38) |
Natural gas purchases, in decatherms [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative, Nonmonetary Notional Amount | 108,000,000 | 118,000,000 |
Electricity purchases (sales), net, in megawatt hours [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative, Nonmonetary Notional Amount | -4,000,000 | -4,000,000 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 |
Not Designated as Hedging Instrument [Member] | Commodity Contract [Member] | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' |
Net Regulatory Asset (Liability), Unrealized Loss (Gain) On Derivative Contracts | $33 | $33 | ' | $47 |
Commodity Contract [Member] | ' | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' |
Fair Value Measurement With Unobservable Inputs Reconciliation, Recurring Basis, Asset (Liability), Net, Value | -33 | -33 | -35 | -47 |
Fair Value, Measurements with Unobservable Inputs Reconciliation, Recurring Basis, Gain (Loss) Included In Regulatory Assets and Liabilities, Net | 0 | 12 | ' | ' |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases | 0 | -1 | ' | ' |
Fair Value, Measurements With Unobservable Inputs Reconciliation, Recurring Basis, Assets and Liability, Net, Settlements | $2 | $3 | ' | ' |
Fair_Value_Measurements_Debt_D
Fair Value Measurements - Debt (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Long-term debt | $3,066 | $3,071 |
Level 2 [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Long-term debt, fair value | $3,699 | $3,596 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Narrative (Details) (USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | |||||
In Millions, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | 31-May-14 | 31-May-14 | 31-May-14 | 31-May-14 | 31-May-14 |
300 Megawatts Of Renewable Energy [Member] | 274-Megawatt Natural Gas Facility [Member] | 222-Megawatt Natural Gas Facility [Member] | 15-Megawatt Solar Facility [Member] | 200-Megawatt Solar facility [Member] | ||||
MW | MW | MW | MW | MW | ||||
Public Utilities, General Disclosures [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
New Generation Capacity | ' | ' | ' | 300 | 274 | 222 | 15 | 200 |
Amount awarded unpaid rent | $1 | ' | ' | ' | ' | ' | ' | ' |
Amount awarded inverse condemnation and interest | 5 | ' | ' | ' | ' | ' | ' | ' |
Total judgment amount | ' | 12 | ' | ' | ' | ' | ' | ' |
Loss Contingency, Amount of Bond Posted | ' | ' | $6 | ' | ' | ' | ' | ' |