v3.25.2
Fair Value of Financial Assets and Liabilities
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Value of Financial Assets and Liabilities Fair Value of Financial Assets and Liabilities
We measure and classify fair value measurements in accordance with the hierarchy as defined by GAAP. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:
•Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to liquidate as of the reporting date.
•Level 2 — inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.
•Level 3 — unobservable inputs, such as internally developed pricing models or third-party valuations for the asset or liability due to little or no market activity for the asset or liability.
Fair Value of Financial Liabilities Recorded at Amortized Cost
The following table presents the carrying amounts and fair values of our long-term debt and SNF obligation as of June 30, 2025 and December 31, 2024. We have no financial liabilities classified as Level 1. The carrying amounts of the short-term liabilities as presented in the Consolidated Balance Sheets are representative of their fair value (Level 2) because of the short-term nature of these instruments.
June 30, 2025December 31, 2024
Carrying AmountFair ValueCarrying AmountFair Value
Level 2Level 3TotalLevel 2Level 3Total
Long-Term Debt, including amounts due within one year
$7,411 $6,934 $705 $7,639 $8,412 $7,805 $716 $8,521 
SNF Obligation1,397 1,311 — 1,311 1,366 1,278 — 1,278 
Valuation Techniques Used to Determine Fair Value and Net Asset Value
Our valuation techniques used to measure the fair value and net asset value of the assets and liabilities are in accordance with the policies discussed in Note 17 — Fair Value of Financial Assets and Liabilities of our 2024 Form 10-K.
Recurring Fair Value Measurements
The following table present assets and liabilities measured and recorded at fair value in the Consolidated Balance Sheets on a recurring basis and their level within the fair value hierarchy as of June 30, 2025 and December 31, 2024:
June 30, 2025December 31, 2024
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Assets
Cash equivalents(a)
$38 $— $— $38 $120 $— $— $120 
NDT fund investments
Cash equivalents(b)
490 170 — 660 187 163 — 350 
Equities5,730 1,663 1 7,394 5,230 1,897 — 7,127 
Fixed income2,230 1,587 376 4,193 2,089 1,462 368 3,919 
Private credit— — 127 127 — — 134 134 
Assets measured at NAV— — — 5,955 — — — 5,791 
NDT fund investments subtotal(c)
8,450 3,420 504 18,329 7,506 3,522 502 17,321 
Rabbi trust investments58 40 1 99 58 41 1 100 
Investments in equities92 — — 92 389 — — 389 
Mark-to-market derivative assets
Economic hedges1,402 6,166 4,218 11,786 1,278 5,306 2,641 9,225 
Effect of netting and allocation of
collateral		(1,218)(5,834)(3,481)(10,533)(1,097)(4,790)(2,123)(8,010)
Mark-to-market derivative assets subtotal184 332 737 1,253 181 516 518 1,215 
Total assets measured at fair value8,822 3,792 1,242 19,811 8,254 4,079 1,021 19,145 
Liabilities
Mark-to-market derivative liabilities
Economic hedges(1,417)(6,424)(4,365)(12,206)(1,222)(5,462)(2,778)(9,462)
Effect of netting and allocation of
collateral
1,357 6,258 3,765 11,380 1,180 5,157 2,259 8,596 
Mark-to-market derivative liabilities subtotal(60)(166)(600)(826)(42)(305)(519)(866)
Deferred compensation obligation— (111)— (111)— (93)— (93)
Total liabilities measured at fair value(60)(277)(600)(937)(42)(398)(519)(959)
Total net assets$8,762 $3,515 $642 $18,874 $8,212 $3,681 $502 $18,186 
__________
(a)CEG Parent has $51 million and $130 million of Level 1 cash equivalents as of June 30, 2025 and December 31, 2024, respectively. We exclude cash of $1,943 million and $2,924 million, and restricted cash of $59 million and $71 million as of June 30, 2025 and December 31, 2024, respectively. CEG Parent has excluded an additional $9 million and $4 million of cash as of June 30, 2025 and December 31, 2024, respectively.
(b)Includes net liabilities of $135 million and $148 million as of June 30, 2025 and December 31, 2024, respectively, which consist of receivables related to pending securities sales, interest and dividend receivables, repurchase agreement obligations, and payables related to pending securities purchases. The repurchase agreements are generally short-term in nature with durations generally of 30 days or less.
(c)Includes total NDT derivative assets and liabilities that are not material, which have notional amounts of $1,514 million and $1,119 million as of June 30, 2025 and December 31, 2024, respectively. The notional principal amounts provide one measure of the transaction volume outstanding as of the periods ended and do not represent the amount of our exposure to credit or market loss.
As of June 30, 2025, our NDTs have outstanding commitments to invest in private credit, private equity, and real assets of $504 million, $436 million, and $568 million, respectively. These commitments will be funded by our existing NDT funds.
Equity Security Investments without Readily Determinable Fair Values. We hold investments without readily determinable fair values with carrying amounts of $204 million and $150 million as of June 30, 2025 and December 31, 2024, respectively. Changes in fair value, cumulative adjustments, and impairments were not material for the three and six months ended June 30, 2025 and the year ended December 31, 2024.
Reconciliation of Level 3 Assets and Liabilities
The following tables present the fair value reconciliation of Level 3 assets and liabilities measured at fair value on a recurring basis during the three and six months ended June 30, 2025 and 2024:
Three Months Ended June 30, 2025
NDT Fund InvestmentsMark-to-Market DerivativesRabbi Trust InvestmentsTotal
Balance as of April 1, 2025
$502 $(18)$1 $485 
Total realized / unrealized gains (losses)
Included in net income (loss)1 94 
(a)
— 95 
Included in Payables related to Regulatory Agreement Units
3 — — 3 
Change in collateral— 80 — 80 
Purchases, sales, issuances and settlements
Purchases— 36 — 36 
Sales— (2)— (2)
Settlements(2)— 

— (2)
Transfers into Level 3— (42)
(b)
— (42)
Transfers out of Level 3— (11)
(b)
— (11)
Balance as of June 30, 2025
$504 $137 $1 $642 
The amount of total gains (losses) included in income attributed to the change in unrealized gains (losses) related to assets and liabilities as of June 30, 2025
$1 $206 $— $207 
Three Months Ended June 30, 2024
NDT Fund InvestmentsMark-to-Market Derivatives
Rabbi Trust Investments
Total
Balance as of April 1, 2024
$460 $518 $1 $979 
Total realized / unrealized gains (losses)
Included in net income (loss)— (185)
(a)
— (185)
Included in Payables related to Regulatory Agreement Units
1 — — 1 
Change in collateral— (40)— (40)
Purchases, sales, issuances and settlements
Purchases33 14 — 47 
Sales— (39)— (39)
Settlements(2)— — (2)
Transfers into Level 3— 30 
(b)
— 30 
Transfers out of Level 3— 14 
(b)
— 14 
Balance as of June 30, 2024
$492 $312 $1 $805 
The amount of total gains (losses) included in income attributed to the change in unrealized gains (losses) related to assets and liabilities as of June 30, 2024
$— $(4)$— $(4)
Six Months Ended June 30, 2025
NDT Fund InvestmentsMark-to-Market DerivativesRabbi Trust InvestmentsTotal
Balance as of January 1, 2025
$502 $(1)$1 $502 
Total realized / unrealized gains (losses)
Included in net income (loss)2 (37)
(a)
— (35)
Included in Payables related to Regulatory Agreement Units
3 — — 3 
Change in collateral— 147 — 147 
Purchases, sales, issuances and settlements
Purchases— 51 — 51 
Sales— (5)— (5)
Settlements(4)— — (4)
Transfers into Level 31 (43)
(b)
— (42)
Transfers out of Level 3— 25 
(b)
— 25 
Balance as of June 30, 2025
$504 $137 $1 $642 
The amount of total gains (losses) included in income attributed to the change in unrealized gains (losses) related to assets and liabilities as of June 30, 2025
$2 $110 $— $112 
Six Months Ended June 30, 2024
NDT Fund InvestmentsMark-to-Market DerivativesRabbi Trust InvestmentsTotal
Balance as of January 1, 2024
$429 $869 $1 $1,299 
Total realized / unrealized gains (losses)
Included in net income (loss)— (491)
(a)
— (491)
Included in Payables related to Regulatory Agreement Units
4 — — 4 
Change in collateral— (7)— (7)
Purchases, sales, issuances and settlements
Purchases66 18 — 84 
Sales— (83)— (83)
Settlements(7)(2)— (9)
Transfers into Level 3— 39 
(b)
— 39 
Transfers out of Level 3— (31)
(b)
— (31)
Balance as of June 30, 2024
$492 $312 $1 $805 
The amount of total gains (losses) included in income attributed to the change in unrealized gains (losses) related to assets and liabilities as of June 30, 2024
$— $25 $— $25 
__________
(a)Includes a reduction of ($112) million and ($147) million for realized gains due to the settlement of derivative contracts for the three and six months ended June 30, 2025, respectively. Includes a reduction of ($181) million and ($518) million for realized gains due to the settlement of derivative contracts for the three and six months ended June 30, 2024, respectively.
(b)Transfers into and out of Level 3 generally occur when the contract tenor becomes less and more observable, respectively, primarily due to changes in market liquidity or assumptions for certain commodity contracts.
The following table presents the income statement classification of the total realized and unrealized gains (losses) included in income for Level 3 assets and liabilities measured at fair value on a recurring basis during the three and six months ended June 30, 2025 and 2024:
Three Months Ended June 30,
Operating RevenuesPurchased Power and Fuel
Other, net
202520242025202420252024
Total gains (losses) included in net income$(37)$(103)$131 $(82)$1 $— 
Total unrealized gains (losses)74 113 132 (117)1 — 
Six Months Ended June 30,
Operating RevenuesPurchased Power and Fuel
Other, net
202520242025202420252024
Total gains (losses) included in net income$1 $(275)$(38)$(218)$2 $— 
Total unrealized gains (losses)66 261 44 (236)2 — 
Mark-to-Market Derivatives
The following table presents the significant inputs to the forward curve used to value these positions:
Type of tradeFair Value as of June 30, 2025Fair Value as of December 31, 2024
Valuation Technique
Unobservable Input
2025 Range & Arithmetic Average
2024 Range & Arithmetic Average
Mark-to-market derivatives—Economic hedges(a)(b)
$(147)$(137)Discounted Cash FlowForward power price
$5.24 - $142
$52
$2.57 - $140
$49
Forward gas price
$1.42 - $14
$3.98
$2.09 - $15
$3.68
Option ModelVolatility percentage
12% - 131%
62%
23% - 141%
57%
__________
(a)The valuation techniques, unobservable inputs, ranges, and arithmetic averages are the same for the asset and liability positions.
(b)The fair values do not include cash collateral posted (received) on Level 3 positions of $284 million and $136 million as of June 30, 2025 and December 31, 2024, respectively.
The inputs listed above, which are as of the balance sheet date, would have a direct impact on the fair values of the above instruments if they were adjusted. The significant unobservable inputs used in the fair value measurement of our commodity derivatives are forward commodity prices and for options is price volatility. Increases (decreases) in the forward commodity price in isolation would result in significantly higher (lower) fair values for long positions (contracts that give us the obligation or option to purchase a commodity), with offsetting impacts to short positions (contracts that give us the obligation or right to sell a commodity). Increases (decreases) in volatility would increase (decrease) the value for the holder of the option (writer of the option). Generally, a change in the estimate of forward commodity prices is unrelated to a change in the estimate of volatility of prices. An increase to the heat rate would increase the fair value accordingly. Generally, interrelationships exist between market prices of natural gas and power. As such, an increase in natural gas pricing would potentially have a similar impact on forward power markets.