v3.24.3
Fair Value of Financial Instruments (Tables)
 9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Schedule of Estimated Carrying Values and Fair Values
The carrying amount and estimated fair value of the Company’s recorded financial instrument not carried at fair market value or that does not approximate fair value is as follows:
As of September 30, 2024As of December 31, 2023
Carrying AmountFair ValueCarrying AmountFair Value
(In millions)
Long-term debt, including current portion (a)
$7,201 $6,897 $8,102 $7,611 
(a) Excludes net debt issuance costs, which are recorded as a reduction to long-term debt on the Company’s consolidated balance sheets.
Schedule of Fair Value Option, Disclosures The following table presents the level within the fair value hierarchy for long-term debt, including current portion:
As of September 30, 2024As of December 31, 2023
Level 2Level 3Level 2Level 3
 (In millions)
Long-term debt, including current portion
$2,002 $4,895 $1,939 $5,672 
Schedule of Fair Value, Assets and Liabilities The following table presents assets and liabilities measured and recorded at fair value on the Company’s consolidated balance sheets on a recurring basis and their level within the fair value hierarchy:
As of September 30, 2024As of December 31, 2023
Fair Value (a)
Fair Value (a)
(In millions)
Level 2 (b)
Level 3
Level 2 (b)
Level 3
Derivative assets:
Energy-related commodity contracts (c)
$— $7 $2 $— 
Interest rate contracts97 — 121 — 
Other financial instruments (d)
— 10 — 13 
Total assets$97 $17 $123 $13 
Derivative liabilities:
Energy-related commodity contracts (e)
$1 $326 $— $330 
Interest rate contracts3 — 2 — 
Total liabilities$4 $326 $2 $330 
(a) There were no derivative assets or liabilities classified as Level 1 as of September 30, 2024 and December 31, 2023.
(b) The Company’s interest rate swaps are measured at fair value using an income approach, which uses readily observable inputs, such as forward interest rates (e.g., SOFR) and contractual terms to estimate fair value.
(c) Includes long-term backbone transportation service contracts classified as Level 2 and short-term heat rate call option contracts classified as Level 3.
(d) Includes SREC contract.
(e) Includes long-term backbone transportation contracts classified as Level 2 and long-term power commodity contracts and short-term heat rate call option contracts classified as Level 3. As of September 30, 2024 and December 31, 2023, Level 3 amounts include $326 million and $325 million related to long-term power commodity contracts and zero and $5 million related to short-term heat rate call option contracts, respectively.
The following table reconciles the beginning and ending balances for instruments that are recognized at fair value in the consolidated financial statements using significant unobservable inputs:
 Three months ended September 30,
Nine months ended September 30,
2024
2023
20242023
(In millions)Fair Value Measurement Using Significant Unobservable Inputs (Level 3)Fair Value Measurement Using Significant Unobservable Inputs (Level 3)
Beginning balance$(381)$(291)$(317)$(336)
Settlements6 21 — 30 
Total gains (losses) for the period included in earnings66 (39)8 (3)
Ending balance $(309)$(309)$(309)$(309)
Change in unrealized gains included in earnings for derivatives and other financial instruments held as of September 30, 2024
$66 $8 
Schedule of Fair Value Measurement Inputs and Valuation Techniques
The following table quantifies the significant unobservable inputs used in developing the fair value of the Company’s Level 3 positions:
September 30, 2024
Fair ValueInput/Range
AssetsLiabilitiesValuation TechniqueSignificant Unobservable InputLowHighWeighted Average
(In millions)
Long-term Power Commodity Contracts$— $326 Discounted Cash FlowForward Market Price (per MWh)$19.67 $69.48 $41.94 
Heat Rate Call Option Commodity Contracts7 — Option ModelForward Market Price (per MWh)$(33.90)$1,083.78 $56.23 
Option ModelForward Market Price (per MMBtu)$2.31 $12.52 $5.73 
Other Financial Instruments10 — Discounted Cash FlowForecast annual generation levels of certain DG solar facilities59,425 MWh118,850 MWh111,091 MWh
The following table provides the impact on the fair value measurements to increases/(decreases) in significant unobservable inputs as of September 30, 2024:
TypeSignificant Unobservable InputPositionChange In InputImpact on Fair Value Measurement
Energy-Related Commodity ContractsForward Market Price PowerSellIncrease/(Decrease)Lower/(Higher)
Energy-Related Commodity ContractsForward Market Price GasSellIncrease/(Decrease)Higher/(Lower)
Other Financial InstrumentsForecast Generation LevelsSellIncrease/(Decrease)Higher/(Lower)