Note 7 - Derivative Instruments |
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| Derivative Instruments and Hedging Activities Disclosure [Text Block] |
Note 7—Derivative Instruments
The primary risk managed by the Company using derivative instruments is commodity price risk, which is accounted for in accordance with ASC 815 — Derivatives and Hedging. Natural gas and electricity put and call options and swaps are entered into as hedges against unfavorable fluctuations in market prices of natural gas and electricity. The Company does not apply hedge accounting to these options or swaps; therefore the changes in fair value are recorded in earnings. By using derivative instruments to mitigate exposures to changes in commodity prices, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk. The Company minimizes the credit or repayment risk in derivative instruments by entering into transactions with high-quality counterparties. At June 30, 2026, GRE’s swaps and options were traded on the Intercontinental Exchange.
The summarized volume of GRE’s outstanding contracts and options at June 30, 2026 was as follows (MWh – Megawatt hour and Dth – Decatherm):
The fair value of outstanding derivative instruments recorded in the accompanying condensed consolidated balance sheets were as follows:
(1) The Company classifies derivative assets and liabilities as current based on the cash flows expected to be incurred within the following 12 months.
The effects of derivative instruments on the condensed consolidated statements of operations were as follows:
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