v3.26.1
Derivative Instruments
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments Derivative Instruments
OTP enters into derivative instruments to manage its exposure to future market energy price variability and reduce price volatility for retail customers. These derivative instruments are not designated as qualifying hedging transactions but provide for an economic hedge against future market energy price variability. The instruments are recorded at fair value on the consolidated balance sheets. In accordance with ratemaking and cost recovery processes, we recognize a regulatory asset or liability to defer losses or gains from derivative activity until settlement of the associated derivative instrument.
As of June 30, 2026, OTP had multiple outstanding pay-fixed, receive-variable swap agreements with various settlement dates extending to December 31, 2027. The following presents the notional amounts and fair value of our derivative instruments as of June 30, 2026 and December 31, 2025:
(in thousands)
June 30,
2026		December 31,
2025
Megawatt hours of electricity
511311
Derivative Assets:
Other Current Assets
$763 $124 
Other Noncurrent Assets
94 — 
Total Derivative Assets$857 $124 
Derivative Liabilities:
Other Current Liabilities
$2,494 $2,717 
Other Noncurrent Liabilities
915 — 
Total Derivative Liabilities$3,409 $2,717 
During the six months ended June 30, 2026 and 2025, contracts matured and were settled resulting in a gain of $1.5 million and a loss of $2.6 million, respectively. Gains and losses recognized on the settlement of derivative instruments are returned to or recovered from our electric customers through fuel recovery mechanisms in each state. When recognized in the consolidated statements of operations, these gains or losses are included in electric purchased power. Gains or losses related to the settlement of derivative instruments are included in cash flows from operations in the consolidated statements of cash flows.