We are exposed to market price risk by purchasing power to supply the power requirements of our member distribution cooperatives that are not met by our owned generation. In addition, the purchase of fuel to operate our generating facilities

also exposes us to market price risk. To manage this exposure, we utilize derivative instruments. See Note 1 of the Notes to Consolidated Financial Statements in our 2024 Annual Report on Form 10-K.

Changes in the fair value of our derivative instruments accounted for at fair value are recorded as a regulatory asset or regulatory liability. The change in these accounts is included in the operating activities section of our Condensed Consolidated Statements of Cash Flows.

Outstanding derivative instruments, excluding contracts accounted for as normal purchase/normal sale, were as follows:



		Quantity
		As of March 31,		As of December 31,
Commodity	Unit of Measure	2025		2024
Natural gas	MMBTU		107,320,000		113,120,000
Purchased power - financial transmission rights	MWh		5,060,910		7,621,183

The fair value of our derivative instruments, excluding contracts accounted for as normal purchase/normal sale, was as follows:


		Fair Value
		As of March 31,		As of December 31,
	Balance Sheet Location	2025		2024
		(in thousands)
Derivatives in an asset position:
Natural gas futures contracts	Other assets	$	19,957	$	6,448
Financial transmission rights	Other assets		—		2,316
Total Derivatives in an asset position		$	19,957	$	8,764

Derivatives in a liability position:
Natural gas futures contracts	Other liabilities	$	565	$	26,753
Financial transmission rights	Other liabilities		7		—
Total Derivatives in a liability position		$	572	$	26,753

The Effect of Derivative Instruments on the Condensed Consolidated Statements of Revenues, Expenses, and Patronage Capital for the Three Months Ended March 31, 2025 and 2024


	Amount of Gain						Location of	Amount of Gain (Loss) Reclassified from
	(Loss) Recognized						Gain (Loss)	Regulatory Asset/Liability
	in Regulatory						Reclassified	into Income for the
Derivatives	Asset/Liability for						from Regulatory	Three Months
Accounted for Utilizing	Derivatives as of						Asset/Liability	Ended
Regulatory Accounting	March 31,						into Income	March 31,
	2025			2024				2025			2024
	(in thousands)							(in thousands)
Natural gas futures contracts	$	19,252		$	(67,687	)	Fuel	$	8,741		$	(22,484	)
Purchased power		(8	)		(2,773	)	Purchased power		(5,158	)		(7,849	)
Total	$	19,244		$	(70,460	)	Total	$	3,583		$	(30,333	)

Our hedging activities expose us to credit-related risks. We use hedging instruments, including forwards, futures, financial transmission rights, and options, to mitigate our power market price risks. Because we rely substantially on the use of hedging instruments, we are exposed to the risk that counterparties will default in performance of their obligations to us. Although we assess the creditworthiness of counterparties and other credit issues related to these hedging instruments, and we may require our counterparties to post collateral with us, defaults may still occur. Defaults may take the form of failure to physically deliver purchased energy or failure to pay. If a default occurs, we may be forced to enter into alternative contractual arrangements or purchase energy in the forward, short-term, or spot markets at then-current market prices that may exceed the prices previously agreed upon with the defaulting counterparty.