v3.26.1
Fair Value of Financial Instruments (Tables)
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Schedule of Estimated Carrying Values and Fair Values
The carrying amounts and estimated fair values of the Company’s recorded financial instruments not carried at fair market value or that does not approximate fair value are as follows:
As of June 30, 2026As of December 31, 2025
Carrying AmountFair ValueCarrying AmountFair Value
(In millions)
Long-term debt, including current portion — affiliate$4 $4 $6 $6 
Long-term debt, including current portion — external (a)
9,141 8,787 8,676 8,382 
(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 June 30, 2026As of December 31, 2025
Level 2Level 3Level 2Level 3
(In millions)
Long-term debt, including current portion$2,611 $6,180 $2,038 $6,350 
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 June 30, 2026As of December 31, 2025
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)
$— $20 $1 $13 
Interest rate contracts173 — 142 — 
Other financial instruments (d)
— 4 — 7 
Total assets$173 $24 $143 $20 
Derivative liabilities:
Energy-related commodity contracts (e)
$— $82 $— $333 
Interest rate contracts11 — 27 — 
Total liabilities$11 $82 $27 $333 
(a) There were no derivative assets or liabilities classified as Level 1 as of June 30, 2026 and December 31, 2025.
(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 short-term backbone transportation service contracts classified as Level 2 and heat rate call option commodity contracts classified as Level 3.
(d) Includes SREC contract.
(e) Includes long-term power commodity contracts and heat rate call option commodity contracts classified as Level 3. As of June 30, 2026 and December 31, 2025, $80 million and $330 million, respectively, related to long-term power commodity contracts, and $2 million and $3 million, respectively, related to heat rate call option commodity contracts.
The following table reconciles the beginning and ending balances for instruments that are recognized at fair value in the consolidated financial statements using significant unobservable inputs:
Three months ended June 30,Six months ended June 30,
2026202520262025
(In millions)Fair Value Measurement Using Significant Unobservable Inputs (Level 3)Fair Value Measurement Using Significant Unobservable Inputs (Level 3)
Beginning balance$(168)$(363)$(313)$(352)
Settlements8 33 11 40 
Transfers out of Level 3 (a)
96 — 211 — 
Total gains (losses) for the period included in earnings6 (15)33 (33)
Ending balance $(58)$(345)$(58)$(345)
Change in unrealized gains included in earnings for derivatives and other financial instruments held as of June 30, 2026$6 $33 
(a) During 2026, the Company restructured the Mesquite Sky, Langford and Elbow Creek energy-related commodity contracts, resulting in the derecognition of the related derivative liabilities and classification as in-substance financings, as further described in Note 7, Long-term Debt.
Schedule of Fair Value Measurement Inputs and Valuation Techniques
The following table quantifies the significant unobservable inputs used in developing the fair value of the Company’s Level 3 positions:
June 30, 2026
Fair ValueInput/Range
AssetsLiabilitiesValuation TechniqueSignificant Unobservable InputLowHighWeighted Average
(In millions)
Long-term Power Commodity Contracts$— $80 Discounted Cash FlowForward Market Price ($ per MWh)$31.47 $79.85 $48.47 
Heat Rate Call Option Commodity Contracts20 2 Option ModelForward Market Price ($ per MWh)2.26 256.49 44.08 
Option ModelForward Market Price ($ per MMBtu)2.15 9.91 2.66 
Other Financial Instruments4 — Discounted Cash FlowForecast annual generation levels of certain DG solar facilities57,935 MWh115,869 MWh97,214 MWh
The following table provides the impact on the fair value measurements to increases/(decreases) in significant unobservable inputs as of June 30, 2026:
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)