CALPINE CORP, 10-Q filed on 11/1/2017
Quarterly Report
Document and Entity Information
9 Months Ended
Sep. 30, 2017
Oct. 30, 2017
Entity Information [Line Items]
 
 
Entity Registrant Name
CALPINE CORP 
 
Entity Central Index Key
0000916457 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Large Accelerated Filer 
 
Document Type
10-Q 
 
Document Period End Date
Sep. 30, 2017 
 
Document Fiscal Year Focus
2017 
 
Document Fiscal Period Focus
Q3 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
360,581,879 
Consolidated Condensed Statements of Operations (USD $)
In Millions, except Share data in Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Operating revenues:
 
 
 
 
Commodity revenue
$ 2,506 
$ 2,063 
$ 6,714 
$ 5,199 
Mark-to-market gain (loss)
76 
287 
224 
(79)
Other revenue
13 
14 
Operating revenues
2,586 
2,355 
6,951 
5,134 
Operating expenses:
 
 
 
 
Commodity expense
1,711 
1,294 
4,757 
3,197 
Mark-to-market (gain) loss
10 
178 
185 
(57)
Fuel and purchased energy expense
1,721 
1,472 
4,942 
3,140 
Plant operating expense
228 
215 
812 
741 
Depreciation and amortization expense
179 
161 
542 
490 
Sales, general and other administrative expense
37 
33 
117 
106 
Other operating expenses
23 
18 
63 
55 
Total operating expenses
2,188 
1,899 
6,476 
4,532 
Impairment losses
12 
41 
13 
Gain on sale of assets, net
(27)
(Income) from unconsolidated subsidiaries
(7)
(6)
(17)
(16)
Income from operations
393 
462 
478 
605 
Interest expense
156 
158 
469 
472 
Debt extinguishment costs
26 
15 
Other (income) expense, net
16 
18 
Income (loss) before income taxes
229 
297 
(33)
100 
Income tax expense (benefit)
(2)
(4)
17 
Net income (loss)
231 
301 
(33)
83 
Net income attributable to the noncontrolling interest
(6)
(6)
(14)
(15)
Net income (loss) attributable to Calpine
$ 225 
$ 295 
$ (47)
$ 68 
Basic earnings (loss) per common share attributable to Calpine:
 
 
 
 
Weighted Average Number of Shares Outstanding, Basic
355,442 
354,215 
355,164 
353,929 
Loss per share, basic and diluted
$ 0.63 
$ 0.83 
$ (0.13)
$ 0.19 
Weighted average shares of common stock outstanding (in thousands)
358,844 
356,352 
355,164 
355,980 
Net income (loss) per common share attributable to Calpine — diluted
$ 0.63 
$ 0.83 
$ (0.13)
$ 0.19 
Consolidated Condensed Statements of Comprehensive Income (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Statement of Comprehensive Income [Abstract]
 
 
 
 
Net income (loss)
$ 231 
$ 301 
$ (33)
$ 83 
Cash flow hedging activities:
 
 
 
 
Gain (loss) on cash flow hedges before reclassification adjustment for cash flow hedges realized in net income (loss)
(3)
(44)
(33)
Reclassification adjustment for loss on cash flow hedges realized in net income (loss)
11 
11 
37 
33 
Foreign currency translation gain (loss)
(3)
13 
Income tax expense
(1)
(3)
Other comprehensive income
14 
15 
Comprehensive income (loss)
245 
316 
(30)
92 
Comprehensive (income) attributable to the noncontrolling interest
(7)
(8)
(15)
(15)
Comprehensive income (loss) attributable to Calpine
$ 238 
$ 308 
$ (45)
$ 77 
Consolidated Condensed Balance Sheets (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Current assets:
 
 
Cash and cash equivalents ($55 and $79 attributable to VIEs)
$ 426 
$ 418 
Accounts receivable, net of allowance of $9 and $6
935 
839 
Inventories
409 
581 
Margin deposits and other prepaid expense
182 
364 
Restricted cash, current ($126 and $109 attributable to VIEs)
196 
173 
Derivative assets, current
206 1 2
221 1 2
Current assets held for sale (nil and $134 attributable to VIEs)
210 
Other current assets
34 
45 
Total current assets
2,388 
2,851 
Property, plant and equipment, net ($4,099 and $3,979 attributable to VIEs)
12,833 
13,013 
Restricted cash, net of current portion ($25 and $14 attributable to VIEs)
26 
15 
Investments in unconsolidated subsidiaries
106 
99 
Derivative Asset, Noncurrent
284 1 2
300 1 2
Goodwill
243 
187 
Intangible assets, net
552 
650 
Other assets ($58 and $56 attributable to VIEs)
360 
378 
Total assets
16,792 
17,493 
Current liabilities:
 
 
Accounts payable
756 
671 
Accrued interest payable
129 
125 
Debt, current portion ($181 and $176 attributable to VIEs)
369 
748 
Other current liabilities
427 
523 
Total current liabilities
1,794 
2,205 
Debt, net of current portion ($2,867 and $2,944 attributable to VIEs)
11,281 
11,431 
Long-term derivative liabilities
103 1 2
149 1 2
Other long-term liabilities
291 
369 
Total liabilities
13,469 
14,154 
Commitments and contingencies (see Note 11)
   
   
Stockholders’ equity:
 
 
Preferred stock, $0.001 par value per share; authorized 100,000,000 shares, none issued and outstanding
Common stock, $0.001 par value per share; authorized 1,400,000,000 shares, 361,695,622 and 359,627,113 shares issued, respectively, and 360,613,587 and 359,061,764 shares outstanding, respectively
Treasury stock, at cost, 1,082,035 and 565,349 shares, respectively
(13)
(7)
Additional paid-in capital
9,652 
9,625 
Accumulated deficit
(6,260)
(6,213)
Accumulated other comprehensive loss
(135)
(137)
Total Calpine stockholders’ equity
3,244 
3,268 
Noncontrolling interest
79 
71 
Total stockholders’ equity
3,323 
3,339 
Total liabilities and stockholders’ equity
16,792 
17,493 
Derivative Liability, Current
$ 113 1 2
$ 138 1 2
Consolidated Condensed Balance Sheets (Parenthetical) (USD $)
In Millions, except Share data, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Cash and cash equivalents ($55 and $79 attributable to VIEs)
$ 426 
$ 418 
Accounts receivable, net of allowance of $9 and $6
Restricted cash, current ($126 and $109 attributable to VIEs)
196 
173 
Current assets held for sale (nil and $134 attributable to VIEs)
210 
Property, plant and equipment, net ($4,099 and $3,979 attributable to VIEs)
12,833 
13,013 
Restricted cash, net of current portion ($25 and $14 attributable to VIEs)
26 
15 
Other assets ($58 and $56 attributable to VIEs)
360 
378 
Debt, current portion ($181 and $176 attributable to VIEs)
369 
748 
Debt, net of current portion ($2,867 and $2,944 attributable to VIEs)
11,281 
11,431 
Preferred Stock, Par or Stated Value Per Share
$ 0.001 
$ 0.001 
Preferred Stock, Shares Authorized
100,000,000 
100,000,000 
Preferred Stock, Shares Issued
Preferred Stock, Shares Outstanding
Common Stock, Par or Stated Value Per Share
$ 0.001 
$ 0.001 
Common Stock, Shares Authorized
1,400,000,000 
1,400,000,000 
Common Stock, Shares, Issued
361,695,622 
359,627,113 
Common Stock, Shares, Outstanding
360,613,587 
359,061,764 
Treasury Stock, Shares
1,082,035 
565,349 
Variable Interest Entity, Primary Beneficiary [Member]
 
 
Cash and cash equivalents ($55 and $79 attributable to VIEs)
55 
79 
Restricted cash, current ($126 and $109 attributable to VIEs)
126 
109 
Current assets held for sale (nil and $134 attributable to VIEs)
134 
Property, plant and equipment, net ($4,099 and $3,979 attributable to VIEs)
4,099 
3,979 
Restricted cash, net of current portion ($25 and $14 attributable to VIEs)
25 
14 
Other assets ($58 and $56 attributable to VIEs)
58 
56 
Debt, current portion ($181 and $176 attributable to VIEs)
181 
176 
Debt, net of current portion ($2,867 and $2,944 attributable to VIEs)
$ 2,867 
$ 2,944 
Consolidated Condensed Statements of Cash Flows (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Long-term Debt
$ 11,484 
 
Cash flows from operating activities:
 
 
Net income (loss)
(33)
83 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
Depreciation and amortization(1)
691 1
659 1
Debt extinguishment costs
15 
Income taxes
12 
15 
Impairment losses
41 
13 
Gain on sale of assets, net
(27)
Mark-to-market activity, net
(40)2
21 2
(Income) from unconsolidated subsidiaries
(17)
(16)
Return on investments from unconsolidated subsidiaries
22 
19 
Stock-based compensation expense
31 
23 
Other
(4)
Change in operating assets and liabilities, net of effects of acquisitions:
 
 
Accounts receivable
(86)
(168)
Derivative instruments, net
(10)
(154)
Other assets
60 
Accounts payable and accrued expenses
95 
53 
Other liabilities
64 
102 
Net cash provided by operating activities
807 
667 
Cash flows from investing activities:
 
 
Purchases of property, plant and equipment
(248)
(337)
Proceeds from sale of Osprey Energy Center
162 
(Increase) decrease in restricted cash
(33)
Other
35 
20 
Net cash used in investing activities
(195)
(841)
Cash flows from financing activities:
 
 
Borrowings under First Lien Term Loans
396 
556 
Repayment of CCFC Term Loans and First Lien Term Loans
(435)
(1,220)
Repurchase of First Lien Notes
(453)
Proceeds from Lines of Credit
625 
Repayments of project financing, notes payable and other
(90)
(98)
Distribution to noncontrolling interest holder
(8)
Financing costs
(9)
(27)
Shares repurchased for tax withholding on stock-based awards
(6)
(5)
Other
(2)
Net cash used in financing activities
(604)
(171)
Net increase (decrease) in cash and cash equivalents
(345)
Cash and cash equivalents, beginning of period
418 
906 
Cash and cash equivalents, end of period
426 
561 
Cash paid during the period for:
 
 
Interest, net of amounts capitalized
412 
421 
Income taxes
10 
10 
Supplemental disclosure of non-cash investing and financing activities:
 
 
Increase Decrease In Capital Expenditures Incurred But Not Yet Paid
14 
(4)
Purchase of King City Cogen Plant Lease
15 3
3
Granite Ridge Energy Center [Member]
 
 
Cash flows from investing activities:
 
 
Payments to Acquire Businesses, Net of Cash Acquired
(526)
North American Power [Member]
 
 
Cash flows from investing activities:
 
 
Payments to Acquire Businesses, Net of Cash Acquired
(111)
King City Cogen Promissory Note [Member]
 
 
Long-term Debt
$ 57 
 
Basis of Presentation and Summary of Significant Accounting Policies
Summary of significant accounting policies
Basis of Presentation and Summary of Significant Accounting Policies
We are a power generation company engaged in the ownership and operation of primarily natural gas-fired and geothermal power plants in North America. We have a significant presence in major competitive wholesale power markets in California (included in our West segment), Texas (included in our Texas segment) and the Northeast and Mid-Atlantic regions (included in our East segment) of the U.S. We sell power, steam, capacity, renewable energy credits and ancillary services to our customers, which include utilities, independent electric system operators, industrial and agricultural companies, retail power providers, municipalities and other governmental entities, power marketers as well as retail commercial, industrial, governmental and residential customers. We continue to focus on getting closer to our customers through expansion of our retail platform which began with the acquisition of Champion Energy in 2015 and was followed by the acquisitions of Calpine Solutions in late 2016 and North American Power in early 2017. We purchase primarily natural gas and some fuel oil as fuel for our power plants and engage in related natural gas transportation and storage transactions. We also purchase power for sale to our customers and purchase electric transmission rights to deliver power to our customers. Additionally, consistent with our Risk Management Policy, we enter into natural gas, power, environmental product, fuel oil and other physical and financial commodity contracts to hedge certain business risks and optimize our portfolio of power plants.
Merger Agreement — On August 17, 2017, we entered into the Merger Agreement with Volt Parent, LP (“Volt Parent”) and Volt Merger Sub, Inc. (“Merger Sub”), a wholly-owned subsidiary of Volt Parent, pursuant to which Merger Sub will merge with and into Calpine, with Calpine surviving the Merger as a subsidiary of Volt Parent.
At the effective time of the Merger, each share of Calpine’s common stock outstanding as of immediately prior to the effective time of the Merger (excluding common shares held directly by Volt Parent or Merger Sub, common shares held by Calpine as treasury stock, common shares that are subject to vesting or other applicable lapse restrictions, common shares held by any subsidiary of either Calpine or Volt Parent (other than Merger Sub), common shares held by Volt Energy Holdings, LP (“Volt Energy”), an affiliate of Energy Capital Partners III, LLC (“ECP”), and common shares pursuant to which dissenting rights under Delaware law have been properly exercised and not withdrawn or lost) will, at the effective time of the Merger, cease to be outstanding and be converted into the right to receive $15.25 per share in cash or approximately $5.6 billion. Calpine currently expects the Merger to be completed in the first quarter of 2018, subject to approval by stockholders representing a majority of outstanding shares of Calpine common stock, the receipt of certain regulatory approvals and the satisfaction or waiver of certain other customary closing conditions.
The Merger Agreement provides that, during the period beginning on August 17, 2017 and continuing through October 2, 2017, Calpine and its subsidiaries could solicit, initiate, facilitate or encourage “Alternative Transaction Proposals” (as defined in the Merger Agreement) from certain third parties. No Alternative Transaction Proposals were received prior to October 2, 2017. On October 2, 2017, we became subject to customary “no shop” restrictions prohibiting us from soliciting, facilitating, encouraging, discussing, negotiating or cooperating with respect to any “Alternative Transaction Proposals” or providing information to or participating in any discussions or negotiations with third parties regarding “Alternative Transaction Proposals”, subject to certain customary exceptions to permit our Board of Directors to comply with its fiduciary duties.
The Board of Directors has unanimously resolved to recommend that Calpine’s stockholders vote in favor of adoption of the Merger Agreement and the transactions contemplated thereby, including the Merger. Calpine’s stockholders will be asked to vote on the adoption of the Merger Agreement at a special stockholders’ meeting that will be held on a date to be announced as promptly as reasonably practicable following the customary SEC review process. The consummation of the Merger is subject to a condition that the Merger Agreement be adopted by the affirmative vote of the holders of at least a majority of the outstanding shares of Calpine’s common stock entitled to vote, the receipt of certain regulatory approvals and the satisfaction or waiver of certain other customary closing conditions.
The Merger Agreement contains certain termination rights, including, among others, the right of Calpine to terminate the Merger Agreement to accept a “Superior Proposal”, subject to specified limitations and payment by Calpine of a termination fee. The Merger Agreement also provides that Volt Parent will be required to pay Calpine a reverse termination fee under specified circumstances.
For further information on the Merger and the Merger Agreement, please refer to the Current Report on Form 8-K filed on August 22, 2017 and the preliminary proxy statement filed on October 19, 2017 by Calpine. The foregoing descriptions of the Merger Agreement is subject to, and qualified in its entirety by, the full text of the agreement as attached as an exhibit to the Form 8-K filed on August 22, 2017, and is incorporated by reference herein.
On September 15, 2017, we amended our Corporate Revolving Facility to, among other things, provide that the Merger does not constitute a “Change of Control” thereunder, effective upon consummation of the Merger. On October 20, 2017, we further amended our Corporate Revolving Facility to extend the maturity and reduce the capacity under the revolving credit facility from $1.79 billion to $1.47 billion. Both amendments to the Corporate Revolving Facility are effective upon consummation of the Merger.
During the three and nine months ended September 30, 2017, we recorded approximately $11 million in merger-related costs which was recorded in other operating expenses on our Consolidated Condensed Statement of Operation and primarily related to legal, investment banking and other professional fees associated with the Merger.
Basis of Interim Presentation — The accompanying unaudited, interim Consolidated Condensed Financial Statements of Calpine Corporation, a Delaware corporation, and consolidated subsidiaries have been prepared pursuant to the rules and regulations of the SEC. In the opinion of management, the Consolidated Condensed Financial Statements include the normal, recurring adjustments necessary for a fair statement of the information required to be set forth therein. Certain information and note disclosures, normally included in financial statements prepared in accordance with U.S. GAAP, have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, these financial statements should be read in conjunction with our audited Consolidated Financial Statements for the year ended December 31, 2016, included in our 2016 Form 10-K. The results for interim periods are not indicative of the results for the entire year primarily due to acquisitions and disposals of assets, seasonal fluctuations in our revenues and expenses, timing of major maintenance expense, variations resulting from the application of the method to calculate the provision for income tax for interim periods, volatility of commodity prices and mark-to-market gains and losses from commodity and interest rate derivative contracts.
Use of Estimates in Preparation of Financial Statements — The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures included in our Consolidated Condensed Financial Statements. Actual results could differ from those estimates.
Reclassifications We have reclassified certain prior period amounts for comparative purposes. These reclassifications did not have a material effect on our financial condition, results of operations or cash flows.
Cash and Cash Equivalents — We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. We have cash and cash equivalents held in non-corporate accounts relating to certain project finance facilities and lease agreements that require us to establish and maintain segregated cash accounts. These accounts have been pledged as security in favor of the lenders under such project finance facilities, and the use of certain cash balances on deposit in such accounts is limited, at least temporarily, to the operations of the respective projects.
Restricted Cash — Certain of our debt agreements, lease agreements or other operating agreements require us to establish and maintain segregated cash accounts, the use of which is restricted, making these cash funds unavailable for general use. These amounts are held by depository banks in order to comply with the contractual provisions requiring reserves for payments such as for debt service, rent and major maintenance or with applicable regulatory requirements. Funds that can be used to satisfy obligations due during the next 12 months are classified as current restricted cash, with the remainder classified as non-current restricted cash. Restricted cash is generally invested in accounts earning market rates; therefore, the carrying value approximates fair value. Such cash is excluded from cash and cash equivalents on our Consolidated Condensed Balance Sheets and Statements of Cash Flows.
The table below represents the components of our restricted cash as of September 30, 2017 and December 31, 2016 (in millions):
 
September 30, 2017
 
December 31, 2016
 
Current
 
Non-Current
 
Total
 
Current
 
Non-Current
 
Total
Debt service
$
22

 
$
7

 
$
29

 
$
11

 
$
8

 
$
19

Construction/major maintenance
25

 
17

 
42

 
45

 
6

 
51

Security/project/insurance
145

 

 
145

 
114

 

 
114

Other
4

 
2

 
6

 
3

 
1

 
4

Total
$
196

 
$
26

 
$
222

 
$
173

 
$
15

 
$
188


Property, Plant and Equipment, Net — At September 30, 2017 and December 31, 2016, the components of property, plant and equipment are stated at cost less accumulated depreciation as follows (in millions):
 
September 30, 2017
 
December 31, 2016
 
Depreciable Lives
Buildings, machinery and equipment
$
16,512

 
$
16,468

 
3
46
 Years
Geothermal properties
1,480

 
1,377

 
13
58
 Years
Other
235

 
259

 
3
46
 Years
 
18,227

 
18,104

 
 
 
 
 
Less: Accumulated depreciation
6,265

 
5,865

 
 
 
 
 
 
11,962

 
12,239

 
 
 
 
 
Land
117

 
116

 
 
 
 
 
Construction in progress
754

 
658

 
 
 
 
 
Property, plant and equipment, net
$
12,833

 
$
13,013

 
 
 
 
 
Capitalized Interest — The total amount of interest capitalized was $7 million and $5 million for the three months ended September 30, 2017 and 2016, respectively and $20 million and $14 million during the nine months ended September 30, 2017 and 2016, respectively.
Goodwill — We have not recorded any impairment losses associated with our goodwill. The change in goodwill by segment during the nine months ended September 30, 2017 was as follows (in millions):
 
West
 
Texas
 
East
 
Total
Goodwill at December 31, 2016
$
68

 
$
31

 
$
88

 
$
187

Acquisition of North American Power

 

 
49

 
49

Purchase price allocation adjustments(1)
(2
)
 
1

 
8

 
7

Goodwill at September 30, 2017
$
66

 
$
32

 
$
145

 
$
243


____________
(1)
The purchase price allocation adjustment in the East segment represents adjustments of $17 million for North American Power and $(9) million for Calpine Solutions.
Related Party — Under the Accounts Receivables Sales Program, at September 30, 2017 and December 31, 2016, we had $228 million and $211 million, respectively, in trade accounts receivable outstanding that were sold to Calpine Receivables and $40 million and $32 million, respectively, in notes receivable from Calpine Receivables which were recorded on our Consolidated Condensed Balance Sheets. During the nine months ended September 30, 2017, we sold an aggregate of $1.6 billion in trade accounts receivable and recorded $1.6 billion in proceeds. For a further discussion of the Accounts Receivable Sales Program and Calpine Receivables, see Notes 2 and 5 in our 2016 Form 10-K.
Derivative Instruments — During 2008, we established our accounting policy related to the presentation of our derivative instruments on our Consolidated Condensed Balance Sheets. Historically, we separately reflected on a gross basis the fair value of our current and long-term derivative assets and liabilities and related cash collateral executed with the same counterparty under a master netting arrangement. Effective September 30, 2017, we reflect on a net basis the fair value amounts associated with our current and long-term derivative assets and liabilities and the related amounts recognized for the right to reclaim, or the obligation to return, cash collateral on our Consolidated Condensed Balance Sheets. This policy is preferable as it more accurately reflects counterparty credit risk, liquidity risk and the contractual rights and obligations under these arrangements.
The revised presentation of our derivative instruments is considered a change in accounting principle; thus, we retroactively applied the new accounting to our Consolidated Condensed Balance Sheet as of December 31, 2016 which did not result in a change in our total stockholder’s equity, results of operations or cash flows for any previously reported periods. See Notes 5, 6 and 7 for additional information on the assets and liabilities that are reflected on a net basis in our Consolidated Condensed Balance Sheets. The table below reflects the effect of the new accounting on previously reported financial information (in millions):
 
 
As Previously Reported
 
Effect of Offsetting Adjustment
 
As Adjusted
Consolidated Condensed Balance Sheet as of December 31, 2016
 
 
 
 
 
 
Margin deposits and other prepaid expense
 
$
441

 
$
(77
)
 
$
364

Derivative assets, current
 
$
1,725

 
$
(1,504
)
 
$
221

Total current assets
 
$
4,432


$
(1,581
)

$
2,851

Long-term derivative assets
 
$
543

 
$
(243
)
 
$
300

Total assets
 
$
19,317

 
$
(1,824
)
 
$
17,493

 
 
 
 
 
 
 
Derivative liabilities, current
 
$
1,630

 
$
(1,492
)
 
$
138

Other current liabilities
 
$
528

 
$
(5
)
 
$
523

Total current liabilities
 
$
3,702

 
$
(1,497
)
 
$
2,205

Long-term derivative liabilities
 
$
476

 
$
(327
)
 
$
149

Total liabilities
 
$
15,978

 
$
(1,824
)
 
$
14,154

 
 
 
 
 
 
 
Consolidated Condensed Statement of Cash Flows for the Nine Months Ended September 30, 2016
 
 
 
 
 
 
Change in operating assets and liabilities, net of effects of acquisitions:
 
 
 
 
 
 
Derivative instruments, net
 
$
(71
)
 
$
(83
)
 
$
(154
)
Other assets
 
$
(75
)
 
$
76

 
$
1

Accounts payable and accrued expenses
 
$
46

 
$
7

 
$
53

Net cash provided by operating activities
 
$
667

 
$

 
$
667


New Accounting Standards and Disclosure Requirements
Revenue Recognition — In May 2014, the FASB issued Accounting Standards Update 2014-09, “Revenue from Contracts with Customers.” The comprehensive new revenue recognition standard will supersede all existing revenue recognition guidance. The core principle of the standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires expanded disclosures surrounding revenue recognition. The standard allows for either full retrospective or modified retrospective adoption. In August 2015, the FASB deferred the effective date of Accounting Standards Update 2014-09 for public entities by one year, such that the standard will become effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. The standard permits entities to adopt early, but only as of the original effective date. In March 2016, the FASB issued Accounting Standards Update 2016-08 “Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” which clarifies implementation guidance for principal versus agent considerations in the new revenue recognition standard. In May 2016, the FASB issued Accounting Standards Update 2016-12 “Narrow-Scope Improvements and Practical Expedients” which addresses assessing the collectability of a contract, the presentation of sales taxes and other taxes collected from customers, non-cash consideration and completed contracts and contract modifications at transition. We plan to adopt the standard in the first quarter of 2018 using the modified retrospective transition approach. We are finalizing our evaluation of the effect the revenue recognition standards will have on our revenue contracts such as our PPAs and tolling agreements as well as the additional disclosure requirements associated with the new standard; however, we do not expect the adoption of this standard will have a material effect on our financial condition, results of operations or cash flows. Upon adoption, we intend to elect the practical expedient that would allow an entity to recognize revenue in the amount to which the entity has the right to invoice to the extent we determine that we have a right to consideration from the customer in an amount that corresponds directly with the value provided based on our performance completed to date.
Inventory In July 2015, the FASB issued Accounting Standards Update 2015-11, “Simplifying the Measurement of Inventory.” The standard changes the inventory valuation method from the lower of cost or market to the lower of cost or net realizable value for inventory valued under the first-in, first-out or average cost methods. This standard is effective for fiscal years beginning after December 15, 2016, including interim periods and requires prospective adoption with early adoption permitted. We adopted Accounting Standards Update 2015-11 in the first quarter of 2017 which did not have a material effect on our financial condition, results of operations or cash flows.
Leases — In February 2016, the FASB issued Accounting Standards Update 2016-02, “Leases.” The comprehensive new lease standard will supersede all existing lease guidance. The standard requires that a lessee should recognize a right-to-use asset and a lease liability for substantially all operating leases based on the present value of the minimum rental payments. Entities may make an accounting policy election to not recognize lease assets and liabilities for leases with a term of 12 months or less. For lessors, the accounting for leases remains substantially unchanged. The standard also requires expanded disclosures surrounding leases. The standard is effective for fiscal periods beginning after December 15, 2018, including interim periods within that reporting period and requires modified retrospective adoption with early adoption permitted. We expect to adopt the standard in the first quarter of 2019. We have completed our initial evaluation of the standard and believe that the key changes that will affect us relate to our accounting for operating leases that are currently off-balance sheet and tolling contracts which we currently account for as operating leases. Additionally, we are evaluating the potential effects of the removal of the real estate guidance currently applicable to lessors that will be abrogated under Accounting Standards Update 2014-09, “Revenue from Contracts with Customers.” We are also considering electing the practical expedient in our implementation of the standard; however, this may change as we complete our assessment of the standard.
Statement of Cash Flows — In August 2016, the FASB issued Accounting Standards Update 2016-15, “Classification of Certain Cash Receipts and Cash Payments.” The standard addresses several matters of diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows including the presentation of debt extinguishment costs and distributions received from equity method investments. The standard is effective for fiscal years beginning after December 15, 2017, including interim periods and requires retrospective adoption with early adoption permitted. We do not anticipate a material effect on our financial condition, results of operations or cash flows as a result of adopting this standard.
Restricted Cash — In November 2016, the FASB issued Accounting Standards Update 2016-18, “Restricted Cash.” The standard requires restricted cash to be included with cash and cash equivalents when reconciling the beginning and ending amounts in the statement of cash flows and also requires disclosures regarding the nature of restrictions on cash, cash equivalents and restricted cash. The standard is effective for fiscal years beginning after December 15, 2017, including interim periods and requires retrospective adoption with early adoption permitted. We do not anticipate a material effect on our financial condition, results of operations or cash flows as a result of adopting this standard.
Intangibles – Goodwill and Other — In January 2017, the FASB issued Accounting Standards Update 2017-04, “Simplifying the Test for Goodwill Impairment.” The standard eliminates the second step in the goodwill impairment test which requires an entity to determine the implied fair value of the reporting unit’s goodwill. Instead, an entity should recognize an impairment loss if the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, with the impairment loss not to exceed the amount of goodwill allocated to the reporting unit. The standard is effective for annual and interim goodwill impairment tests conducted in fiscal years beginning after December 15, 2019, with early adoption permitted. We do not anticipate a material effect on our financial condition, results of operations or cash flows as a result of adopting this standard.
Derivatives and Hedging — In August 2017, the FASB issued Accounting Standards Update 2017-12, “Targeted Improvements to Accounting for Hedging Activities.” The standard better aligns an entity’s hedging activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results in the financial statements. The standard will prospectively make hedge accounting easier to apply to hedging activities and also enhances disclosure requirements for how hedge transactions are reflected in the financial statements when hedge accounting is elected. The standard is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We are currently assessing the future effect this standard may have on our financial condition, results of operations or cash flows.
Acquisition (Notes)
Mergers, acquisitions and dispositions disclosures
Acquisitions and Divestitures
Acquisition of North American Power
On January 17, 2017, we, through an indirect, wholly-owned subsidiary, completed the purchase of 100% of the outstanding limited liability company membership interests in North American Power for approximately $105 million, excluding working capital and other adjustments. North American Power is a growing retail energy supplier for homes and small businesses and is primarily concentrated in the Northeast U.S. where Calpine has a substantial power generation presence and where Champion Energy has a substantial retail sales footprint that is enhanced by the addition of North American Power, which has been integrated into our Champion Energy retail platform. We funded the acquisition with cash on hand and the purchase price is allocated to the net assets of the business including intangible assets for the value of customer relationships and goodwill. The goodwill recorded associated with our acquisition of North American Power is deductible for tax purposes. We did not record any material adjustments to the preliminary purchase price allocation during the nine months ended September 30, 2017. The pro forma incremental effect of North American Power on our results of operations for each of the three and nine months ended September 30, 2017 and 2016 is not material.
Acquisition of Calpine Solutions, formerly Noble Solutions
We did not record any material adjustments to the preliminary purchase price allocation during the nine months ended September 30, 2017 associated with our acquisition of Calpine Solutions on December 1, 2016.
Acquisition of Granite Ridge Energy Center
On February 5, 2016, we, through our indirect, wholly-owned subsidiary Calpine Granite Holdings, LLC, completed the purchase of Granite Ridge Energy Center, a power plant with a nameplate capacity of 745 MW (summer peaking capacity of 695 MW), from Granite Ridge Holdings, LLC, for approximately $500 million, excluding working capital and other adjustments. The purchase price allocation was finalized during the first quarter of 2017 and did not result in any material adjustments or the recognition of goodwill.
Sale of Osprey Energy Center
On January 3, 2017, we completed the sale of the Osprey Energy Center to Duke Energy Florida, Inc. for approximately $166 million, excluding working capital and other adjustments. This transaction supports our effort to divest non-core assets outside our strategic concentration. We recorded a gain on sale of assets, net of approximately $27 million during the nine months ended September 30, 2017 associated with the sale of the Osprey Energy Center.
South Point Energy Center
As a result of the denial by the Nevada Public Utility Commission of the sale of South Point Energy Center to Nevada Power Company in February 2017, we terminated the corresponding asset sale agreement in the first quarter of 2017. We are currently assessing our options related to South Point Energy Center; however, we do not anticipate that the termination of the asset sale agreement will have a material effect on our financial condition, results of operations or cash flows. During the first quarter of 2017, we reclassified the assets of South Point Energy Center from current assets held for sale to held and used.
Variable Interest Entities and Unconsolidated Investments in Power Plants
Variable interest entities and unconsolidated investments in power plants
Variable Interest Entities and Unconsolidated Investments
We consolidate all of our VIEs where we have determined that we are the primary beneficiary. There were no changes to our determination of whether we are the primary beneficiary of our VIEs for the nine months ended September 30, 2017. See Note 5 in our 2016 Form 10-K for further information regarding our VIEs.
VIE Disclosures
Our consolidated VIEs include natural gas-fired power plants with an aggregate capacity of 8,423 MW and 9,491 MW at September 30, 2017 and December 31, 2016, respectively. For these VIEs, we may provide other operational and administrative support through various affiliate contractual arrangements among the VIEs, Calpine Corporation and its other wholly-owned subsidiaries whereby we support the VIE through the reimbursement of costs and/or the purchase and sale of energy. Other than amounts contractually required, we provided support to these VIEs in the form of cash and other contributions of nil during each of the three and nine months ended September 30, 2017 and $1 million during each of the three and nine months ended September 30, 2016.
Unconsolidated VIEs and Investments in Unconsolidated Subsidiaries
We have a 50% partnership interest in Greenfield LP and in Whitby. Greenfield LP and Whitby are VIEs; however, we do not have the power to direct the most significant activities of these entities and therefore do not consolidate them. Greenfield LP is a limited partnership between certain subsidiaries of ours and of Mitsui & Co., Ltd., which operates the Greenfield Energy Centre, a 1,038 MW natural gas-fired, combined-cycle power plant located in Ontario, Canada. We and Mitsui & Co., Ltd. each hold a 50% interest in Greenfield LP. Whitby is a limited partnership between certain of our subsidiaries and Atlantic Packaging Ltd., which operates the Whitby facility, a 50 MW natural gas-fired, simple-cycle cogeneration power plant located in Ontario, Canada. We and Atlantic Packaging Ltd. each hold a 50% partnership interest in Whitby.
In December 2016, we acquired Calpine Receivables, a bankruptcy remote entity created for the special purpose of purchasing trade accounts receivable from Calpine Solutions under the Accounts Receivable Sales Program. Calpine Receivables is a VIE. We have determined that we do not have the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance nor the obligation to absorb losses or receive benefits from the VIE. Accordingly, we have determined that we are not the primary beneficiary of Calpine Receivables because we do not have the power to affect its financial performance as the unaffiliated financial institutions that purchase the receivables from Calpine Receivables control the selection criteria of the receivables sold and appoint the servicer of the receivables which controls management of default. Thus, we do not consolidate Calpine Receivables in our Consolidated Condensed Financial Statements and use the equity method of accounting to record our net interest in Calpine Receivables.
We account for these entities under the equity method of accounting and include our net equity interest in investments in unconsolidated subsidiaries on our Consolidated Condensed Balance Sheets. At September 30, 2017 and December 31, 2016, our equity method investments included on our Consolidated Condensed Balance Sheets were comprised of the following (in millions):
 
Ownership Interest as of
September 30, 2017
 
September 30, 2017
 
December 31, 2016
Greenfield LP
50%
 
$
92

 
$
73

Whitby
50%
 
4

 
16

Calpine Receivables
100%
 
10

 
10

Total investments in unconsolidated subsidiaries
 
 
$
106

 
$
99


Our risk of loss related to our investments in Greenfield LP, Whitby and Calpine Receivables is limited to our investment balance. Holders of the debt of our unconsolidated investments do not have recourse to Calpine Corporation and its other subsidiaries; therefore, the debt of our unconsolidated investments is not reflected on our Consolidated Condensed Balance Sheets. At September 30, 2017 and December 31, 2016, Greenfield LP’s debt was approximately $263 million and $259 million, respectively, and based on our pro rata share of our investment in Greenfield LP, our share of such debt would be approximately $132 million and $130 million at September 30, 2017 and December 31, 2016, respectively.
Our equity interest in the net income from our investments in unconsolidated subsidiaries for the three and nine months ended September 30, 2017 and 2016, is recorded in (income) from unconsolidated subsidiaries. We did not have any income or receive any distributions from our investment in Calpine Receivables for the three and nine months ended September 30, 2017. The following table sets forth details of our (income) from unconsolidated subsidiaries for the periods indicated (in millions):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2017
 
2016
 
2017
 
2016
Greenfield LP
$
(5
)
 
$
(3
)
 
$
(11
)
 
$
(8
)
Whitby
(2
)
 
(3
)
 
(6
)
 
(8
)
Total
$
(7
)
 
$
(6
)

$
(17
)

$
(16
)
Distributions from Greenfield LP were $4 million during each of the three and nine months ended September 30, 2017, and $1 million and $6 million during the three and nine months ended September 30, 2016, respectively. Distributions from Whitby were $2 million and $18 million during the three and nine months ended September 30, 2017, respectively, and nil and $13 million during the three and nine months ended September 30, 2016, respectively.
Debt
Debt
Debt
Our debt at September 30, 2017 and December 31, 2016, was as follows (in millions):
 
September 30, 2017

December 31, 2016
Senior Unsecured Notes
$
3,415

 
$
3,412

First Lien Term Loans
3,152

 
3,165

First Lien Notes
1,843

 
2,290

Project financing, notes payable and other
1,575

 
1,597

CCFC Term Loans
1,544

 
1,553

Capital lease obligations
121

 
162

Subtotal
11,650

 
12,179

Less: Current maturities
369

 
748

Total long-term debt
$
11,281

 
$
11,431


Our effective interest rate on our consolidated debt, excluding the effects of capitalized interest and mark-to-market gains (losses) on interest rate hedging instruments, decreased to 5.4% for the nine months ended September 30, 2017, from 5.5% for the same period in 2016. The issuance of our 2019 First Lien Term Loan in February 2017 and a portion of our 2023 First Lien Term Loans in May 2016 allowed us to reduce our overall cost of debt by replacing a portion of our First Lien Notes and First Lien Term Loans with debt carrying lower interest rates.
Senior Unsecured Notes
The amounts outstanding under our Senior Unsecured Notes are summarized in the table below (in millions):
 
September 30, 2017
 
December 31, 2016
2023 Senior Unsecured Notes
$
1,238

 
$
1,237

2024 Senior Unsecured Notes
643

 
643

2025 Senior Unsecured Notes
1,534

 
1,532

Total Senior Unsecured Notes
$
3,415

 
$
3,412


First Lien Term Loans
The amounts outstanding under our senior secured First Lien Term Loans are summarized in the table below (in millions):
 
September 30, 2017
 
December 31, 2016
2017 First Lien Term Loan(1)
$
149

 
$
537

2019 First Lien Term Loan
389

 

2023 First Lien Term Loans
1,067

 
1,071

2024 First Lien Term Loan
1,547

 
1,557

Total First Lien Term Loans
$
3,152

 
$
3,165


____________
(1)
For the nine months ended September 30, 2017, we used cash on hand to repay $400 million of our outstanding 2017 First Lien Term Loan. We recorded approximately $1 million and $4 million in debt extinguishment costs for the three and nine months ended September 30, 2017, related to the partial repayment of our 2017 First Lien Term Loan.
On February 3, 2017, we entered into a $400 million first lien senior secured term loan which bears interest, at our option, at either (i) the Base Rate, equal to the highest of (a) the Federal Funds Effective Rate plus 0.5% per annum, (b) the Prime Rate or (c) the Eurodollar Rate for a one month interest period plus 1.0% (in each case, as such terms are defined in the 2019 First Lien Term Loan credit agreement), plus an applicable margin of 0.75%, or (ii) LIBOR plus 1.75% per annum (with no LIBOR floor) and matures on December 31, 2019. An aggregate amount equal to 0.25% of the aggregate principal amount of the 2019 First Lien Term Loans is payable at the end of each quarter (beginning with the quarter ending June 2017) with the remaining balance payable on the maturity date. We paid an upfront fee of an amount equal to 1.0% of the aggregate principal amount of the 2019 First Lien Term Loan, which is structured as original issue discount and recorded approximately $8 million in debt issuance costs during the first quarter of 2017 related to the issuance of our 2019 First Lien Term Loan. The 2019 First Lien Term Loan contains substantially similar covenants, qualifications, exceptions and limitations as our First Lien Term Loans and First Lien Notes. We used the proceeds from the 2019 First Lien Term Loan, together with cash on hand, to redeem the remaining 2023 First Lien Notes.
First Lien Notes
The amounts outstanding under our senior secured First Lien Notes are summarized in the table below (in millions):
 
September 30, 2017
 
December 31, 2016
2022 First Lien Notes
$
741

 
$
739

2023 First Lien Notes(1)

 
450

2024 First Lien Notes
485

 
485

2026 First Lien Notes
617

 
616

Total First Lien Notes
$
1,843

 
$
2,290

____________
(1)
On March 6, 2017, we used cash on hand along with the proceeds from our 2019 First Lien Term Loan to redeem the remaining $453 million of our 2023 First Lien Notes, plus accrued and unpaid interest. During the first quarter of 2017, we recorded approximately $21 million in debt extinguishment costs related to the redemption of our 2023 First Lien Notes.
Corporate Revolving Facility and Other Letter of Credit Facilities
The table below represents amounts issued under our letter of credit facilities at September 30, 2017 and December 31, 2016 (in millions):
 
September 30, 2017
 
December 31, 2016
Corporate Revolving Facility(1)
$
474

 
$
535

CDHI
246

 
250

Various project financing facilities
230

 
206

Total
$
950

 
$
991

____________
(1)
The Corporate Revolving Facility represents our primary revolving facility.
Fair Value of Debt
We record our debt instruments based on contractual terms, net of any applicable premium or discount and debt issuance costs. The following table details the fair values and carrying values of our debt instruments at September 30, 2017 and December 31, 2016 (in millions):
 
September 30, 2017
 
December 31, 2016
 
Fair Value
 
Carrying Value
 
Fair Value
 
Carrying Value
Senior Unsecured Notes
$
3,307

 
$
3,415

 
$
3,343

 
$
3,412

First Lien Term Loans
3,202

 
3,152

 
3,244

 
3,165

First Lien Notes
1,905

 
1,843

 
2,349

 
2,290

Project financing, notes payable and other(1)
1,516

 
1,484

 
1,543

 
1,506

CCFC Term Loans
1,554

 
1,544

 
1,567

 
1,553

Total
$
11,484

 
$
11,438

 
$
12,046

 
$
11,926

____________
(1)
Excludes a lease that is accounted for as a failed sale-leaseback transaction under U.S. GAAP.
We measure the fair value of our Senior Unsecured Notes, First Lien Term Loans, First Lien Notes and CCFC Term Loans using market information, including quoted market prices or dealer quotes for the identical liability when traded as an asset (categorized as level 2). We measure the fair value of our project financing, notes payable and other debt instruments using discounted cash flow analyses based on our current borrowing rates for similar types of borrowing arrangements (categorized as level 3). We do not have any debt instruments with fair value measurements categorized as level 1 within the fair value hierarchy.
Assets and Liabilities with Recurring Fair Value Measurements
Assets and Liabilities with Recurring Fair Value Measurements
Assets and Liabilities with Recurring Fair Value Measurements
Cash Equivalents — Highly liquid investments which meet the definition of cash equivalents, primarily investments in money market accounts and other interest-bearing accounts, are included in both our cash and cash equivalents and our restricted cash on our Consolidated Condensed Balance Sheets. Certain of our money market accounts invest in U.S. Treasury securities or other obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities. We do not have any cash equivalents invested in institutional prime money market funds which require use of a floating net asset value and are subject to liquidity fees and redemption restrictions. Certain of our cash equivalents are classified within level 1 of the fair value hierarchy.
Derivatives — The primary factors affecting the fair value of our derivative instruments at any point in time are the volume of open derivative positions (MMBtu, MWh and $ notional amounts); changing commodity market prices, primarily for power and natural gas; our credit standing and that of our counterparties and customers for energy commodity derivatives; and prevailing interest rates for our interest rate hedging instruments. Prices for power and natural gas and interest rates are volatile, which can result in material changes in the fair value measurements reported in our financial statements in the future.
We utilize market data, such as pricing services and broker quotes, and assumptions that we believe market participants would use in pricing our assets or liabilities including assumptions about the risks inherent to the inputs in the valuation technique. These inputs can be either readily observable, market corroborated or generally unobservable. The market data obtained from broker pricing services is evaluated to determine the nature of the quotes obtained and, where accepted as a reliable quote, used to validate our assessment of fair value. We use other qualitative assessments to determine the level of activity in any given market. We primarily apply the market approach and income approach for recurring fair value measurements and utilize what we believe to be the best available information. We utilize valuation techniques that seek to maximize the use of observable inputs and minimize the use of unobservable inputs. We classify fair value balances based on the observability of those inputs.
The fair value of our derivatives includes consideration of our credit standing, the credit standing of our counterparties and customers and the effect of credit enhancements, if any. We have also recorded credit reserves in the determination of fair value based on our expectation of how market participants would determine fair value. Such valuation adjustments are generally based on market evidence, if available, or our best estimate.
Our level 1 fair value derivative instruments primarily consist of power and natural gas swaps, futures and options traded on the NYMEX or Intercontinental Exchange.
Our level 2 fair value derivative instruments primarily consist of interest rate hedging instruments and OTC power and natural gas forwards for which market-based pricing inputs in the principal or most advantageous market are representative of executable prices for market participants. These inputs are observable at commonly quoted intervals for substantially the full term of the instruments. In certain instances, our level 2 derivative instruments may utilize models to measure fair value. These models are industry-standard models that incorporate various assumptions, including quoted interest rates, correlation, volatility, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.
Our level 3 fair value derivative instruments may consist of OTC power and natural gas forwards and options where pricing inputs are unobservable, as well as other complex and structured transactions primarily for the sale and purchase of power and natural gas to both wholesale counterparties and retail customers. Complex or structured transactions are tailored to our customers’ needs and can introduce the need for internally-developed model inputs which might not be observable in or corroborated by the market. When such inputs have a significant effect on the measurement of fair value, the instrument is categorized in level 3. Our valuation models may incorporate historical correlation information and extrapolate available broker and other information to future periods. OTC options are valued using industry-standard models, including the Black-Scholes option-pricing model. At each balance sheet date, we perform an analysis of all instruments subject to fair value measurement and include in level 3 all of those whose fair value is based on significant unobservable inputs.
Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect our estimate of the fair value of our assets and liabilities and their placement within the fair value hierarchy levels. The following tables present our financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2017 and December 31, 2016, by level within the fair value hierarchy:
 
Assets and Liabilities with Recurring Fair Value Measures as of September 30, 2017
 
Level 1    
 
Level 2    
 
Level 3    
 
Total    
 
(in millions)
Assets:
 
 
 
 
 
 
 
Cash equivalents(1)
$
173

 
$

 
$

 
$
173

Commodity instruments:
 
 
 
 
 
 
 
Commodity exchange traded futures and swaps contracts
605

 

 

 
605

Commodity forward contracts(2)

 
362

 
332

 
694

Interest rate hedging instruments

 
20

 

 
20

Effect of netting and allocation of collateral(3)(4)
(605
)
 
(203
)
 
(21
)
 
(829
)
Total assets
$
173

 
$
179

 
$
311

 
$
663

Liabilities:
 
 
 
 
 
 
 
Commodity instruments:
 
 
 
 
 
 
 
Commodity exchange traded futures and swaps contracts
656

 

 

 
656

Commodity forward contracts(2)

 
355

 
64

 
419

Interest rate hedging instruments

 
52

 

 
52

Effect of netting and allocation of collateral(3)(4)
(656
)
 
(220
)
 
(35
)
 
(911
)
Total liabilities
$

 
$
187

 
$
29

 
$
216

 
Assets and Liabilities with Recurring Fair Value Measures as of December 31, 2016
 
Level 1    
 
Level 2    
 
Level 3    
 
Total    
 
(in millions)
Assets:
 
 
 
 
 
 
 
Cash equivalents(1)
$
153

 
$

 
$

 
$
153

Commodity instruments:
 
 
 
 
 
 
 
Commodity exchange traded futures and swaps contracts
1,542

 

 

 
1,542

Commodity forward contracts(2)

 
231

 
466

 
697

Interest rate hedging instruments

 
29

 

 
29

Effect of netting and allocation of collateral(3)(4)
(1,542
)
 
$
(188
)
 
(17
)
 
(1,747
)
Total assets
$
153

 
$
72

 
$
449

 
$
674

Liabilities:
 
 
 
 
 
 
 
Commodity instruments:
 
 
 
 
 
 
 
Commodity exchange traded futures and swaps contracts
1,570

 

 

 
1,570

Commodity forward contracts(2)

 
411

 
67

 
478

Interest rate hedging instruments

 
58

 

 
58

Effect of netting and allocation of collateral(3)(4)
(1,570
)
 
$
(215
)
 
(34
)
 
(1,819
)
Total liabilities
$

 
$
254

 
$
33

 
$
287

___________
(1)
At September 30, 2017 and December 31, 2016, we had cash equivalents of $32 million and $26 million included in cash and cash equivalents and $141 million and $127 million included in restricted cash, respectively.
(2)
Includes OTC swaps and options and retail contracts.
(3)
During the third quarter of 2017, we elected to offset fair value amounts recognized for derivative instruments executed with the same counterparty under a master netting arrangement for financial statement presentation; therefore, amounts recognized for the right to reclaim, or the obligation to return, cash collateral are presented net with the corresponding derivative instrument fair values. See Note 1 for a further description of the change in accounting principle associated with our election to offset fair value amounts associated with our derivative instruments. See Note 6 for further discussion of our derivative instruments subject to master netting arrangements.
(4)
Cash collateral posted with (received from) counterparties allocated to level 1, level 2 and level 3 derivative instruments totaled $51 million, $17 million and $14 million, respectively, at September 30, 2017. Cash collateral posted with (received from) counterparties allocated to level 1, level 2 and level 3 derivative instruments totaled $28 million, $27 million and $17 million, respectively, at December 31, 2016.
At September 30, 2017 and December 31, 2016, the derivative instruments classified as level 3 primarily included commodity contracts, which are classified as level 3 because the contract terms relate to a delivery location or tenor for which observable market rate information is not available. The fair value of the net derivative position classified as level 3 is predominantly driven by market commodity prices. The following table presents quantitative information for the unobservable inputs used in our most significant level 3 fair value measurements at September 30, 2017 and December 31, 2016:
 
 
Quantitative Information about Level 3 Fair Value Measurements
 
 
 
September 30, 2017
 
 
 
Fair Value, Net Asset
 
 
 
Significant Unobservable
 
 
 
 
 
 
 
(Liability)
 
Valuation Technique
 
Input
 
Range
 
 
(in millions)
 
 
 
 
 
 
 
 
 
Power Contracts
 
$
234

 
Discounted cash flow
 
Market price (per MWh)
 
$
6.55

$89.83
/MWh
Power Congestion Products
 
$
10

 
Discounted cash flow
 
Market price (per MWh)
 
$
(13.13
)
$6.85
/MWh
Natural Gas Contracts
 
$
38

 
Discounted cash flow
 
Market price (per MMBtu)
 
$
0.97

$9.35
/MMBtu
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2016
 
 
 
Fair Value, Net Asset
 
 
 
Significant Unobservable
 
 
 
 
 
 
 
(Liability)
 
Valuation Technique
 
Input
 
Range
 
 
(in millions)
 
 
 
 
 
 
 
 
 
Power Contracts
 
$
376

 
Discounted cash flow
 
Market price (per MWh)
 
$
9.60

$86.34
/MWh
Power Congestion Products
 
$
12

 
Discounted cash flow
 
Market price (per MWh)
 
$
(7.52
)
$13.62
/MWh
Natural Gas Contracts
 
$
18

 
Discounted cash flow
 
Market price (per MMBtu)
 
$
1.95

$5.66
/MMBtu

The following table sets forth a reconciliation of changes in the fair value of our net derivative assets (liabilities) classified as level 3 in the fair value hierarchy for the periods indicated (in millions):
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2017
 
2016
 
2017
 
2016
Balance, beginning of period
 
$
303

 
$
(61
)
 
$
416

 
$
(46
)
Realized and mark-to-market gains (losses):
 
 
 
 
 
 
 
 
Included in net loss:
 
 
 
 
 
 
 
 
Included in operating revenues(1)
 
26

 
30

 
125

 
9

Included in fuel and purchased energy expense(2)
 
(12
)
 
(31
)
 
(1
)
 
(24
)
Change in collateral
 
4

 
(2
)
 
(4
)
 

Purchases and settlements:
 
 
 
 
 
 
 
 
Purchases
 
1

 
1

 
2

 
4

Settlements
 
(40
)
 
15

 
(129
)
 
(4
)
Transfers in and/or out of level 3(3):
 
 
 
 
 
 
 
 
Transfers into level 3(4)
 
3

 
1

 
(5
)
 

Transfers out of level 3(5)
 
(3
)
 
75

 
(122
)
 
89

Balance, end of period
 
$
282

 
$
28

 
$
282

 
$
28

Change in unrealized gains (losses) relating to instruments still held at end of period
 
$
14

 
$
(1
)
 
$
124

 
$
(15
)
___________
(1)
For power contracts and other power-related products, included on our Consolidated Condensed Statements of Operations.
(2)
For natural gas and power contracts, swaps and options, included on our Consolidated Condensed Statements of Operations.
(3)
We transfer amounts among levels of the fair value hierarchy as of the end of each period. There were no transfers into or out of level 1 for each of the three and nine months ended September 30, 2017 and 2016.
(4)
There were $3 million and $1 million in gains transferred out of level 2 into level 3 for the three months ended September 30, 2017 and 2016, and $(5) million and nil in losses transferred out of level 2 into level 3 for the nine months ended September 30, 2017 and 2016, respectively, due to changes in market liquidity in various power markets.
(5)
We had $3 million in gains and $(75) million in losses transferred out of level 3 into level 2 for the three months ended September 30, 2017 and 2016, respectively, and $122 million in gains and $(89) million in losses transferred out of level 3 into level 2 for the nine months ended September 30, 2017 and 2016, respectively, due to changes in market liquidity in various power markets.
Derivative Instruments
Derivative Instruments
Derivative Instruments
Types of Derivative Instruments and Volumetric Information
Commodity Instruments — We are exposed to changes in prices for the purchase and sale of power, natural gas, fuel oil, environmental products and other energy commodities. We use derivatives, which include physical commodity contracts and financial commodity instruments such as OTC and exchange traded swaps, futures, options, forward agreements and instruments that settle on the power price to natural gas price relationships (Heat Rate swaps and options) or instruments that settle on power price relationships between delivery points for the purchase and sale of power and natural gas to attempt to maximize the risk-adjusted returns by economically hedging a portion of the commodity price risk associated with our assets. By entering into these transactions, we are able to economically hedge a portion of our Spark Spread at estimated generation and prevailing price levels.
We also engage in limited trading activities related to our commodity derivative portfolio as authorized by our Board of Directors and monitored by our Chief Risk Officer and Risk Management Committee of senior management. These transactions are executed primarily for the purpose of providing improved price and price volatility discovery, greater market access, and profiting from our market knowledge, all of which benefit our asset hedging activities. Our trading results were not material for each of the three and nine months ended September 30, 2017 and 2016.
Interest Rate Hedging Instruments — A portion of our debt is indexed to base rates, primarily LIBOR. We have historically used interest rate hedging instruments to adjust the mix between fixed and variable rate debt to hedge our interest rate risk for potential adverse changes in interest rates. As of September 30, 2017, the maximum length of time over which we were hedging using interest rate hedging instruments designated as cash flow hedges was 8 years.
As of September 30, 2017 and December 31, 2016, the net forward notional buy (sell) position of our outstanding commodity derivative instruments that did not qualify or were not designated under the normal purchase normal sale exemption and our interest rate hedging instruments were as follows (in millions):
Derivative Instruments
 
Notional Amounts
 
September 30, 2017
 
December 31, 2016
Power (MWh)
 
(98
)
 
(86
)
Natural gas (MMBtu)
 
398

 
613

Environmental credits (Tonnes)
 
19

 
16

Interest rate hedging instruments
 
$
4,600

(1) 
$
3,721


___________
(1)
We entered into interest rate hedging instruments during the first quarter of 2017 to hedge approximately $1.0 billion of variable rate debt for 2018 through 2020 and approximately $500 million of variable rate debt for 2021 through 2022. We also extended the tenor of certain interest rate hedging instruments, which effectively places a ceiling on LIBOR on $2.5 billion of variable rate corporate debt through 2020 and $1.25 billion of variable rate corporate debt in 2021.
Certain of our derivative instruments contain credit risk-related contingent provisions that require us to maintain collateral balances consistent with our credit ratings. If our credit rating were to be downgraded, it could require us to post additional collateral or could potentially allow our counterparty to request immediate, full settlement on certain derivative instruments in liability positions. The aggregate fair value of our derivative liabilities with credit risk-related contingent provisions as of September 30, 2017, was $17 million for which we have posted collateral of $1 million by posting margin deposits or granting additional first priority liens on the assets currently subject to first priority liens under our First Lien Notes, First Lien Term Loans and Corporate Revolving Facility. However, if our credit rating were downgraded by one notch from its current level, we estimate that additional collateral of $1 million related to our derivative liabilities would be required and that no counterparty could request immediate, full settlement.
Accounting for Derivative Instruments
We recognize all derivative instruments that qualify for derivative accounting treatment as either assets or liabilities and measure those instruments at fair value unless they qualify for, and we elect, the normal purchase normal sale exemption. For transactions in which we elect the normal purchase normal sale exemption, gains and losses are not reflected on our Consolidated Condensed Statements of Operations until the period of delivery. Revenues and expenses derived from instruments that qualified for hedge accounting or represent an economic hedge are recorded in the same financial statement line item as the item being hedged. Hedge accounting requires us to formally document, designate and assess the effectiveness of transactions that receive hedge accounting. We present the cash flows from our derivatives in the same category as the item being hedged (or economically hedged) within operating activities on our Consolidated Condensed Statements of Cash Flows unless they contain an other-than-insignificant financing element in which case their cash flows are classified within financing activities.
Cash Flow Hedges — We only apply hedge accounting to our interest rate hedging instruments. We report the effective portion of the mark-to-market gain or loss on our interest rate hedging instruments designated and qualifying as a cash flow hedging instrument as a component of OCI and reclassify such gains and losses into earnings in the same period during which the hedged forecasted transaction affects earnings. Gains and losses due to ineffectiveness on interest rate hedging instruments are recognized currently in earnings as a component of interest expense. If it is determined that the forecasted transaction is no longer probable of occurring, then hedge accounting will be discontinued prospectively and future changes in fair value are recorded in earnings. If the hedging instrument is terminated or de-designated prior to the occurrence of the hedged forecasted transaction, the net accumulated gain or loss associated with the changes in fair value of the hedge instrument remains deferred in AOCI until such time as the forecasted transaction affects earnings or until it is determined that the forecasted transaction is probable of not occurring.
Derivatives Not Designated as Hedging Instruments — We enter into power, natural gas, interest rate, environmental product and fuel oil transactions that primarily act as economic hedges to our asset and interest rate portfolio, but either do not qualify as hedges under the hedge accounting guidelines or qualify under the hedge accounting guidelines and the hedge accounting designation has not been elected. Changes in fair value of commodity derivatives not designated as hedging instruments are recognized currently in earnings and are separately stated on our Consolidated Condensed Statements of Operations in mark-to-market gain/loss as a component of operating revenues (for physical and financial power and Heat Rate and commodity option activity) and fuel and purchased energy expense (for physical and financial natural gas, power, environmental product and fuel oil activity). Changes in fair value of interest rate derivatives not designated as hedging instruments are recognized currently in earnings as interest expense.
Derivatives Included on Our Consolidated Condensed Balance Sheets
During the third quarter of 2017, we elected to begin offsetting fair value amounts associated with our derivative instruments and related cash collateral and margin deposits on our Consolidated Condensed Balance Sheets that are executed with the same counterparty under master netting arrangements. Our netting arrangements include a right to set off or net together purchases and sales of similar products in the margining or settlement process. In some instances, we have also negotiated cross commodity netting rights which allow for the net presentation of activity with a given counterparty regardless of product purchased or sold. We also post cash collateral in support of our derivative instruments which may also be subject to a master netting arrangement with the same counterparty. See Note 1 for a further description of the change in accounting principle associated with our election to offset fair value amounts associated with our derivative instruments.
The following tables present the fair values of our derivative instruments and our net exposure after offsetting amounts subject to a master netting arrangement with the same counterparty to our derivative instruments recorded on our Consolidated Condensed Balance Sheets by location and hedge type at September 30, 2017 and December 31, 2016 (in millions):
 
 
September 30, 2017
 
 
Gross Amounts of Assets and (Liabilities)
 
Gross Amounts Offset on the Consolidated Condensed Balance Sheets
 
Net Amount Presented on the Consolidated Condensed Balance Sheet(1)
Derivative assets:
 
 
 
 
 
 
Commodity exchange traded futures and swaps contracts
 
$
472

 
$
(472
)
 
$

Commodity forward contracts
 
338

 
(133
)
 
205

Interest rate hedging instruments
 
2

 
(1
)
 
1

Total current derivative assets(2)
 
$
812

 
$
(606
)
 
$
206

Commodity exchange traded futures and swaps contracts
 
133

 
(133
)
 

Commodity forward contracts
 
356

 
(82
)
 
274

Interest rate hedging instruments
 
18

 
(8
)
 
10

Total long-term derivative assets(2)
 
$
507

 
$
(223
)
 
$
284

Total derivative assets
 
$
1,319

 
$
(829
)
 
$
490

 
 
 
 
 
 
 
Derivative (liabilities):
 
 
 
 
 
 
Commodity exchange traded futures and swaps contracts
 
$
(496
)
 
$
496

 
$

Commodity forward contracts
 
(236
)
 
148

 
(88
)
Interest rate hedging instruments
 
(26
)
 
1

 
(25
)
Total current derivative (liabilities)(2)
 
$
(758
)
 
$
645

 
$
(113
)
Commodity exchange traded futures and swaps contracts
 
(160
)
 
160

 

Commodity forward contracts
 
(183
)
 
98

 
(85
)
Interest rate hedging instruments
 
(26
)
 
8

 
(18
)
Total long-term derivative (liabilities)(2)
 
$
(369
)
 
$
266

 
$
(103
)
Total derivative liabilities
 
$
(1,127
)
 
$
911

 
$
(216
)
Net derivative assets (liabilities)
 
$
192

 
$
82

 
$
274

 
 
December 31, 2016
 
 
Gross Amounts of Assets and (Liabilities)
 
Gross Amounts Offset on the Consolidated Condensed Balance Sheets
 
Net Amount Presented on the Consolidated Condensed Balance Sheet(1)
Derivative assets:
 
 
 
 
 
 
Commodity exchange traded futures and swaps contracts
 
$
1,344

 
$
(1,344
)
 
$

Commodity forward contracts
 
380

 
(160
)
 
220

Interest rate hedging instruments
 
1

 

 
1

Total current derivative assets(3)
 
$
1,725

 
$
(1,504
)
 
$
221

Commodity exchange traded futures and swaps contracts
 
198

 
(198
)
 

Commodity forward contracts
 
317

 
(45
)
 
272

Interest rate hedging instruments
 
28

 

 
28

Total long-term derivative assets(3)
 
$
543

 
$
(243
)
 
$
300

Total derivative assets
 
$
2,268

 
$
(1,747
)
 
$
521

 
 
 
 
 
 
 
Derivative (liabilities):
 
 
 
 
 
 
Commodity exchange traded futures and swaps contracts
 
$
(1,327
)
 
$
1,327

 
$

Commodity forward contracts
 
(275
)
 
165

 
(110
)
Interest rate hedging instruments
 
(28
)
 

 
(28
)
Total current derivative (liabilities)(3)
 
$
(1,630
)
 
$
1,492

 
$
(138
)
Commodity exchange traded futures and swaps contracts
 
(243
)
 
243

 

Commodity forward contracts
 
(203
)
 
84

 
(119
)
Interest rate hedging instruments
 
(30
)
 

 
(30
)
Total long-term derivative (liabilities)(3)
 
$
(476
)
 
$
327

 
$
(149
)
Total derivative liabilities
 
$
(2,106
)
 
$
1,819

 
$
(287
)
Net derivative assets (liabilities)
 
$
162

 
$
72

 
$
234

____________
(1)
At September 30, 2017 and December 31, 2016, we had $115 million and $262 million of collateral under master netting arrangements that were not offset against our derivative instruments on the Consolidated Condensed Balance Sheets.
(2)
At September 30, 2017, current and long-term derivative assets are shown net of collateral of $(4) million and $(8) million, respectively, and current and long-term derivative liabilities are shown net of collateral of $43 million and $51 million, respectively.
(3)
At December 31, 2016, current and long-term derivative assets are shown net of collateral of $(29) million and $(3) million, respectively, and current and long-term derivative liabilities are shown net of collateral of $19 million and $85 million, respectively.
 
September 30, 2017
 
December 31, 2016
 
Fair Value
of Derivative
Assets
 
Fair Value
of Derivative
Liabilities
 
Fair Value
of Derivative
Assets
 
Fair Value
of Derivative
Liabilities
Derivatives designated as cash flow hedging instruments:
 
 
 
 
 
 
 
Interest rate hedging instruments
$
11

 
$
43

 
$
29

 
$
58

Total derivatives designated as cash flow hedging instruments
$
11

 
$
43

 
$
29

 
$
58

 
 
 
 
 
 
 
 
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
Commodity instruments
$
479

 
$
173

 
$
492

 
$
229

Total derivatives not designated as hedging instruments
$
479

 
$
173

 
$
492

 
$
229

Total derivatives
$
490

 
$
216

 
$
521

 
$
287


Derivatives Included on Our Consolidated Condensed Statements of Operations
Changes in the fair values of our derivative instruments (both assets and liabilities) are reflected either in cash for option premiums paid or collected, in OCI, net of tax, for the effective portion of derivative instruments which qualify for and we have elected cash flow hedge accounting treatment, or on our Consolidated Condensed Statements of Operations as a component of mark-to-market activity within our earnings.
The following tables detail the components of our total activity for both the net realized gain (loss) and the net mark-to-market gain (loss) recognized from our derivative instruments in earnings and where these components were recorded on our Consolidated Condensed Statements of Operations for the periods indicated (in millions):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2017
 
2016
 
2017
 
2016
Realized gain (loss)(1)(2)
 
 
 
 
 
 
 
Commodity derivative instruments
$
(53
)
 
$
32

 
$
20

 
$
213

Total realized gain (loss)
$
(53
)
 
$
32

 
$
20

 
$
213

 
 
 
 
 
 
 
 
Mark-to-market gain (loss)(3)
 
 
 
 
 
 
 
Commodity derivative instruments
$
66

 
$
109

 
$
39

 
$
(22
)
Interest rate hedging instruments

 

 
1

 
1

Total mark-to-market gain (loss)
$
66

 
$
109

 
$
40

 
$
(21
)
Total activity, net
$
13

 
$
141

 
$
60

 
$
192


___________
(1)
Does not include the realized value associated with derivative instruments that settle through physical delivery.
(2)
Includes amortization of acquisition date fair value of financial derivative activity related to the acquisition of Champion Energy, Calpine Solutions and North American Power.
(3)
In addition to changes in market value on derivatives not designated as hedges, changes in mark-to-market gain (loss) also includes hedge ineffectiveness and adjustments to reflect changes in credit default risk exposure.
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2017
 
2016
 
2017
 
2016
Realized and mark-to-market gain (loss)(1)
 
 
 
 
 
 
 
Derivatives contracts included in operating revenues(2)(3)
$
60

 
$
308

 
$
252

 
$
240

Derivatives contracts included in fuel and purchased energy expense(2)(3)
(47
)
 
(167
)
 
(193
)
 
(49
)
Interest rate hedging instruments included in interest expense(4)

 

 
1

 
1

Total activity, net
$
13

 
$
141

 
$
60

 
$
192


___________
(1)
In addition to changes in market value on derivatives not designated as hedges, changes in mark-to-market gain (loss) also includes adjustments to reflect changes in credit default risk exposure.
(2)
Does not include the realized value associated with derivative instruments that settle through physical delivery.
(3)
Includes amortization of acquisition date fair value of financial derivative activity related to the acquisition of Champion Energy, Calpine Solutions and North American Power.
(4)
In addition to changes in market value on interest rate hedging instruments not designated as hedges, changes in mark-to-market gain (loss) also includes hedge ineffectiveness.
Derivatives Included in OCI and AOCI
The following table details the effect of our net derivative instruments that qualified for hedge accounting treatment and are included in OCI and AOCI for the periods indicated (in millions):
 
Three Months Ended September 30,
 
Three Months Ended September 30,
 
Gain (Loss) Recognized in
OCI (Effective Portion)
 
Gain (Loss) Reclassified from
AOCI into Income (Effective Portion)(3)
 
2017
 
2016
 
2017
 
2016
 
Affected Line Item on the Consolidated Condensed Statements of Operations
Interest rate hedging instruments(1)(2)
$
7

 
$
18

 
$
(10
)
 
$
(11
)
 
Interest expense
Interest rate hedging instruments(1)(2)
1

 

 
(1
)
 

 
Depreciation expense
Total
$
8

 
$
18

 
$
(11
)
 
$
(11
)
 
 
 
Nine Months Ended September 30,
 
Nine Months Ended September 30,
 
Gain (Loss) Recognized in
OCI (Effective Portion)
 
Gain (Loss) Reclassified from
AOCI into Income (Effective Portion)(3)
 
2017
 
2016
 
2017
 
2016
 
Affected Line Item on the Consolidated Condensed Statements of Operations
Interest rate hedging instruments(1)(2)
$
(12
)
 
$

 
$
(32
)
 
$
(33
)
 
Interest expense
Interest rate hedging instruments(1)(2)
5

 

 
(5
)
 

 
Depreciation expense
Total
$
(7
)
 
$

 
$
(37
)
 
$
(33
)
 
 
____________
(1)
We did not record any material gain (loss) on hedge ineffectiveness related to our interest rate hedging instruments designated as cash flow hedges during the three and nine months ended September 30, 2017 and 2016.
(2)
We recorded an income tax expense of $1 million and $3 million for each of the three and nine months ended September 30, 2017 and nil for each of the three and nine months ended September 30, 2016, in AOCI related to our cash flow hedging activities.
(3)
Cumulative cash flow hedge losses attributable to Calpine, net of tax, remaining in AOCI were $101 million and $90 million at September 30, 2017 and December 31, 2016, respectively. Cumulative cash flow hedge losses attributable to the noncontrolling interest, net of tax, remaining in AOCI were $7 million and $8 million at September 30, 2017 and December 31, 2016, respectively.
We estimate that pre-tax net losses of $35 million would be reclassified from AOCI into interest expense during the next 12 months as the hedged transactions settle; however, the actual amounts that will be reclassified will likely vary based on changes in interest rates. Therefore, we are unable to predict what the actual reclassification from AOCI into earnings (positive or negative) will be for the next 12 months.
Use of Collateral
Use of Collateral [Text Block]
Use of Collateral
We use margin deposits, prepayments and letters of credit as credit support with and from our counterparties for commodity procurement and risk management activities. In addition, we have granted additional first priority liens on the assets currently subject to first priority liens under various debt agreements as collateral under certain of our power and natural gas agreements and certain of our interest rate hedging instruments in order to reduce the cash collateral and letters of credit that we would otherwise be required to provide to the counterparties under such agreements. The counterparties under such agreements share the benefits of the collateral subject to such first priority liens pro rata with the lenders under our various debt agreements.
The table below summarizes the balances outstanding under margin deposits, natural gas and power prepayments, and exposure under letters of credit and first priority liens for commodity procurement and risk management activities as of September 30, 2017 and December 31, 2016 (in millions):
 
September 30, 2017
 
December 31, 2016
Margin deposits(1)
$
216

 
$
350

Natural gas and power prepayments
27

 
25

Total margin deposits and natural gas and power prepayments with our counterparties(2)
$
243

 
$
375

 
 
 
 
Letters of credit issued
$
731

 
$
798

First priority liens under power and natural gas agreements
193

 
206

First priority liens under interest rate hedging instruments
41

 
55

Total letters of credit and first priority liens with our counterparties
$
965

 
$
1,059

 
 
 
 
Margin deposits posted with us by our counterparties(1)(3)
$
19

 
$
16

Letters of credit posted with us by our counterparties
33

 
43

Total margin deposits and letters of credit posted with us by our counterparties
$
52

 
$
59

___________
(1)
During the third quarter of 2017, we elected to offset fair value amounts recognized for derivative instruments executed with the same counterparty under a master netting arrangement for financial statement presentation; therefore, amounts recognized for the right to reclaim, or the obligation to return, cash collateral are presented net with the corresponding derivative instrument fair values. See Note 1 for a further description of the change in accounting principle associated with our election to offset fair value amounts associated with our derivative instruments. See Note 6 for further discussion of our derivative instruments subject to master netting arrangements.
(2)
At September 30, 2017 and December 31, 2016, $85 million and $78 million, respectively, were included in current and long-term derivative assets and liabilities, $149 million and $288 million, respectively, were included in margin deposits and other prepaid expense and $9 million and $9 million, respectively, were included in other assets on our Consolidated Condensed Balance Sheets.
(3)
At September 30, 2017 and December 31, 2016, $3 million and $6 million, respectively, were included in current and long-term derivative assets and liabilities and $16 million and $10 million, respectively, were included in other current liabilities on our Consolidated Condensed Balance Sheets.
Future collateral requirements for cash, first priority liens and letters of credit may increase or decrease based on the extent of our involvement in hedging and optimization contracts, movements in commodity prices, and also based on our credit ratings and general perception of creditworthiness in our market.
Income Taxes
Income Taxes
Income Taxes
Income Tax Expense (Benefit)

The table below shows our consolidated income tax expense (benefit) and our effective tax rates for the periods indicated (in millions):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2017
 
2016
 
2017
 
2016
Income tax expense (benefit)
$
(2
)
 
$
(4
)
 
$

 
$
17

Effective tax rate
(1
)%
 
(1
)%
 
%
 
20
%

Our income tax rates do not bear a customary relationship to statutory income tax rates primarily as a result of the effect of our NOLs, changes in unrecognized tax benefits and valuation allowances. For the three and nine months ended September 30, 2017 and 2016, our income tax expense (benefit) is largely comprised of discrete tax items and estimated state and foreign income taxes in jurisdictions where we do not have NOLs or valuation allowances. During the nine months ended September 30, 2017, we recorded an income tax benefit of $17 million associated with a favorable adjustment to our reserve for uncertain tax positions.
NOL Carryforwards — As of December 31, 2016, our NOL carryforwards consist primarily of federal NOL carryforwards of approximately $6.7 billion, which expire between 2024 and 2033, and NOL carryforwards in 21 states and the District of Columbia totaling approximately $3.7 billion, which expire between 2017 and 2036, substantially all of which are offset with a full valuation allowance. Certain of the state NOL carryforwards may be subject to limitations on their annual usage. Under federal and state income tax law, our NOL carryforwards can be utilized to reduce future taxable income subject to certain new limitations including if we were to undergo an ownership change as defined by Section 382 of the Internal Revenue Code and similar state provisions.
 We also have approximately $647 million in foreign NOLs, which expire between 2025 and 2033, and the associated deferred tax asset of approximately $161 million is partially offset by a valuation allowance of $101 million. Under Canadian income tax law, our NOL carryforwards can be utilized to reduce future taxable income subject to certain limitations including new applicable limitations resulting from an ownership change which will result in an increase in the valuation allowance and a related charge to deferred tax expense.
Income Tax Audits — We remain subject to periodic audits and reviews by taxing authorities; however, we do not expect these audits will have a material effect on our tax provision. Any NOLs we claim in future years to reduce taxable income could be subject to IRS examination regardless of when the NOLs were generated. Any adjustment of state or federal returns could result in a reduction of deferred tax assets rather than a cash payment of income taxes in tax jurisdictions where we have NOLs. We are currently under U.S. federal income tax examination for the year ended December 31, 2015 and various state income tax audits for various periods. Our Canadian subsidiaries are currently under examination by the Canada Revenue Agency for the years ended December 31, 2013 through 2016.
Valuation Allowance — U.S. GAAP requires that we consider all available evidence, both positive and negative, and tax planning strategies to determine whether, based on the weight of that evidence, a valuation allowance is needed to reduce the value of deferred tax assets. Future realization of the tax benefit of an existing deductible temporary difference or carryforward ultimately depends on the existence of sufficient taxable income of the appropriate character within the carryback or carryforward periods available under the tax law. Due to our history of losses, we were unable to assume future profits; however, we are able to consider available tax planning strategies.
Unrecognized Tax Benefits — At September 30, 2017, we had unrecognized tax benefits of $48 million. If recognized, $10 million of our unrecognized tax benefits could affect the annual effective tax rate and $38 million, related to deferred tax assets, could be offset against the recorded valuation allowance resulting in no effect on our effective tax rate. We had accrued interest and penalties of $4 million for income tax matters at September 30, 2017. We recognize interest and penalties related to unrecognized tax benefits in income tax expense (benefit) on our Consolidated Condensed Statements of Operations. We believe that it is reasonably possible that a decrease within the range of nil and $7 million in unrecognized tax benefits could occur within the next twelve months primarily related to foreign tax issues.
Earnings (Loss) per Share
Earnings Per Share [Text Block]
Earnings (Loss) per Share
We include restricted stock units for which no future service is required as a condition to the delivery of the underlying common stock in our calculation of weighted average shares outstanding. As we incurred a net loss for the nine months ended September 30, 2017, diluted loss per share for this period is computed on the same basis as basic loss per share, as the inclusion of any other potential shares outstanding would be anti-dilutive. Reconciliation of the amounts used in the basic and diluted earnings (loss) per common share computations for the three and nine months ended September 30, 2017 and 2016, are as follows (shares in thousands):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2017
 
2016
 
2017
 
2016
Diluted weighted average shares calculation:
 
 
 
 
 
 
 
Weighted average shares outstanding (basic)
355,442

 
354,215

 
355,164

 
353,929

Share-based awards
3,402

 
2,137

 

 
2,051

Weighted average shares outstanding (diluted)
358,844

 
356,352

 
355,164

 
355,980


We excluded the following items from diluted earnings per common share for the three and nine months ended September 30, 2017 and 2016, because they were anti-dilutive (shares in thousands):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2017
 
2016
 
2017
 
2016
Share-based awards
2,789

 
1,610

 
5,391

 
1,679

Stock-Based Compensation
Stock-Based Compensation
Stock-Based Compensation
Calpine Equity Incentive Plans
The Calpine Equity Incentive Plans provide for the issuance of equity awards to all non-union employees as well as the non-employee members of our Board of Directors. The equity awards may include incentive or non-qualified stock options, restricted stock, restricted stock units, stock appreciation rights, performance compensation awards and other share-based awards. The equity awards granted under the Calpine Equity Incentive Plans include both graded and cliff vesting awards which vest over periods between one and five years, contain contractual terms between approximately five and ten years and are subject to forfeiture provisions under certain circumstances, including termination of employment prior to vesting. At September 30, 2017, 300,000 shares and 21,865,106 shares remain available for issuance under the 2017 Director Plan and the 2017 Equity Plan, respectively. There are no shares available for issuance under the 2008 Director Plan and the 2008 Equity Plan.
Equity Classified Share-Based Awards
Stock-based compensation expense recognized for our equity classified share-based awards was $9 million and $7 million for the three months ended September 30, 2017 and 2016, respectively, and $26 million and $22 million for the nine months ended September 30, 2017 and 2016, respectively. We did not record any significant tax benefits related to stock-based compensation expense in any period as we are not benefiting from a significant portion of our deferred tax assets, including deductions related to stock-based compensation expense. In addition, we did not capitalize any stock-based compensation expense as part of the cost of an asset for the nine months ended September 30, 2017 and 2016. At September 30, 2017, there was unrecognized compensation cost of $28 million related to restricted stock, $7 million related to restricted stock units and $5 million related to options which is expected to be recognized over a weighted average period of 1.5 years for restricted stock, 1.2 years for restricted stock units and 2.1 years for options. We issue new shares from our share reserves set aside for the Calpine Equity Incentive Plans when stock options are exercised and for other share-based awards.
A summary of all of our non-qualified stock option activity for the Equity Plans for the nine months ended September 30, 2017, is as follows:
 
Number of
Shares
 
Weighted Average
Exercise Price
 
Weighted
Average
Remaining
Term
(in years)
 
Aggregate
Intrinsic Value
(in millions)
Outstanding — December 31, 2016
2,697,136

 
$
13.59

 
3.0
 
$
2

Granted
1,476,480

 
$
11.70

 
 
 
 
Exercised
4,000

 
$
9.49

 
 
 
 
Forfeited
15,721

 
$
11.69

 
 
 
 
Expired
32,100

 
$
17.70

 
 
 
 
Outstanding — September 30, 2017
4,121,795

 
$
12.89

 
4.8
 
$
10

Exercisable — September 30, 2017
2,661,036

 
$
13.54

 
2.3
 
$
5

Vested and expected to vest – September 30, 2017
3,949,676

 
$
12.94

 
4.6
 
$
9


The fair value of options granted during the nine months ended September 30, 2017, was determined on the grant date using the Black-Scholes option-pricing model. Certain assumptions were used in order to estimate fair value for options as noted in the following table:
 
2017
 
Expected term (in years)(1)
7.3 - 10.0

 
Risk-free interest rate(2)
2.25

%
Expected volatility(3)
33 - 40

%
Dividend yield(4)

 
Weighted average grant-date fair value (per option)
$
5.38

 
___________
(1)
Expected term calculated using historical exercise data.
(2)
Zero Coupon U.S. Treasury rate or equivalent based on expected term.
(3)
Volatility calculated using the implied volatility of our exchange traded stock options.
(4)
We have never paid cash dividends on our common stock and we do not anticipate any cash dividend payments on our common stock in the near future.
A summary of our restricted stock and restricted stock unit activity for the Calpine Equity Incentive Plans for the nine months ended September 30, 2017, is as follows:
 
Number of
Restricted
Stock Awards
 
Weighted
Average
Grant-Date
Fair Value
Nonvested — December 31, 2016
4,869,648

 
$
15.83

Granted
3,606,816

 
$
11.76

Forfeited
546,585

 
$
13.90

Vested
1,674,738

 
$
17.07

Nonvested — September 30, 2017
6,255,141

(1) 
$
13.31


___________
(1)
Includes 63,075 shares of restricted stock and restricted stock units outstanding under the Director Plans and 6,192,066 shares of restricted stock and restricted stock units outstanding under the Equity Plans.
The total fair value of our restricted stock and restricted stock units that vested during the nine months ended September 30, 2017 and 2016 was approximately $20 million and $16 million, respectively.
Liability Classified Share-Based Awards
During the first quarter of 2017, our Board of Directors approved the award of performance share units to certain senior management employees. These performance share units will be settled in cash with payouts based on the relative performance of Calpine’s total shareholder return over the three-year performance period of January 1, 2017 through December 31, 2019. The performance share units vest on the last day of the performance period and will be settled in cash; thus, these awards are liability classified and are measured at fair value using a Monte Carlo simulation model at each reporting date until settlement. Stock-based compensation expense recognized related to our liability classified share-based awards was $2 million and $(1) million for the three months ended September 30, 2017 and 2016, respectively, and $5 million and $1 million for the nine months ended September 30, 2017 and 2016, respectively.
A summary of our performance share unit activity for the nine months ended September 30, 2017, is as follows:
 
Number of
Performance Share Units
 
Weighted
Average
Grant-Date
Fair Value
Nonvested — December 31, 2016
890,587

 
$
17.90

Granted
478,984

 
$
10.73

Forfeited
54,638

 
$
18.38

Vested(1)
30,312

 
$
17.21

Nonvested — September 30, 2017
1,284,621

 
$
15.22


___________
(1)
In accordance with the applicable performance share unit agreements, performance share units granted to employees who meet the retirement eligibility requirements stipulated in the Equity Plans are fully vested upon the later of the date on which the employee becomes eligible to retire or one-year anniversary of the grant date.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies
Litigation
We are party to various litigation matters, including regulatory and administrative proceedings arising out of the normal course of business. At the present time, we do not expect that the outcome of any of these proceedings, individually or in the aggregate, will have a material adverse effect on our financial condition, results of operations or cash flows.
On a quarterly basis, we review our litigation activities and determine if an unfavorable outcome to us is considered “remote,” “reasonably possible” or “probable” as defined by U.S. GAAP. Where we determine an unfavorable outcome is probable and is reasonably estimable, we accrue for potential litigation losses. The liability we may ultimately incur with respect to such litigation matters, in the event of a negative outcome, may be in excess of amounts currently accrued, if any; however, we do not expect that the reasonably possible outcome of these litigation matters would, individually or in the aggregate, have a material adverse effect on our financial condition, results of operations or cash flows. Where we determine an unfavorable outcome is not probable or reasonably estimable, we do not accrue for any potential litigation loss. The ultimate outcome of these litigation matters cannot presently be determined, nor can the liability that could potentially result from a negative outcome be reasonably estimated. As a result, we give no assurance that such litigation matters would, individually or in the aggregate, not have a material adverse effect on our financial condition, results of operations or cash flows.
Environmental Matters
We are subject to complex and stringent environmental laws and regulations related to the operation of our power plants. On occasion, we may incur environmental fees, penalties and fines associated with the operation of our power plants. At the present time, we do not have environmental violations or other matters that would have a material effect on our financial condition, results of operations or cash flows or that would significantly change our operations.
Guarantees and Indemnifications
Our potential exposure under guarantee and indemnification obligations can range from a specified amount to an unlimited dollar amount, depending on the nature of the claim and the particular transaction. Our total maximum exposure under our guarantee and indemnification obligations is not estimable due to uncertainty as to whether claims will be made or how any potential claim will be resolved. As of September 30, 2017, there are no material outstanding claims related to our guarantee and indemnification obligations and we do not anticipate that we will be required to make any material payments under our guarantee and indemnification obligations. There have been no material changes to our guarantees and indemnifications from those disclosed in Note 15 of our 2016 Form 10-K.
Segment Information
Segment Information
Segment Information
We assess our business on a regional basis due to the effect on our financial performance of the differing characteristics of these regions, particularly with respect to competition, regulation and other factors affecting supply and demand. At September 30, 2017, our reportable segments were West (including geothermal), Texas and East (including Canada). The results of our retail subsidiaries are reflected in the segment which corresponds with the geographic area in which the retail sales occur. We continue to evaluate the optimal manner in which we assess our performance including our segments and future changes may result in changes to the composition of our geographic segments. Commodity Margin is a key operational measure reviewed by our chief operating decision maker to assess the performance of our segments. The tables below show our financial data for our segments for the periods indicated (in millions):
 
Three Months Ended September 30, 2017
 
West
 
Texas
 
East
 
Consolidation
and
Elimination
 
Total
Revenues from external customers
$
553

 
$
1,127

 
$
906

 
$

 
$
2,586

Intersegment revenues
2

 
4

 
2

 
(8
)
 

Total operating revenues
$
555

 
$
1,131

 
$
908

 
$
(8
)
 
$
2,586

Commodity Margin
$
327

 
$
201

 
$
336

 
$

 
$
864

Add: Mark-to-market commodity activity, net and other(1)
(40
)
 
88

 
(39
)
 
(8
)
 
1

Less:
 
 
 
 
 
 
 
 
 
Plant operating expense
83

 
77

 
75

 
(7
)
 
228

Depreciation and amortization expense
63

 
61

 
55

 

 
179

Sales, general and other administrative expense
10

 
16

 
10

 
1

 
37

Other operating expenses
13

 
6

 
6

 
(2
)
 
23

Impairment losses

 
12

 

 

 
12

(Income) from unconsolidated subsidiaries

 

 
(7
)
 

 
(7
)
Income from operations
118

 
117

 
158

 

 
393

Interest expense
 
 
 
 
 
 
 
 
156

Debt extinguishment costs and other (income) expense, net
 
 
 
 
 
 
 
 
8

Income before income taxes
 
 
 
 
 
 
 
 
$
229


 
Three Months Ended September 30, 2016
 
West
 
Texas
 
East
 
Consolidation
and
Elimination
 
Total
Revenues from external customers
$
524

 
$
1,067

 
$
764

 
$

 
$
2,355

Intersegment revenues
1

 
3

 
2

 
(6
)
 

Total operating revenues
$
525

 
$
1,070

 
$
766

 
$
(6
)
 
$
2,355

Commodity Margin
$
298

 
$
198

 
$
324

 
$

 
$
820

Add: Mark-to-market commodity activity, net and other(1)
11

 
110

 
(51
)
 
(7
)
 
63

Less:
 
 
 
 
 
 
 
 
 
Plant operating expense
79

 
65

 
78

 
(7
)
 
215

Depreciation and amortization expense
56

 
53

 
52

 

 
161

Sales, general and other administrative expense
9

 
13

 
12

 
(1
)
 
33

Other operating expenses
8

 
2

 
7

 
1

 
18

(Income) from unconsolidated subsidiaries

 

 
(6
)
 

 
(6
)
Income from operations
157

 
175

 
130

 

 
462

Interest expense
 
 
 
 
 
 
 
 
158

Other (income) expense, net
 
 
 
 
 
 
 
 
7

Income before income taxes
 
 
 
 
 
 
 
 
$
297

 
Nine Months Ended September 30, 2017
 
West
 
Texas
 
East
 
Consolidation
and
Elimination
 
Total
Revenues from external customers
$
1,666

 
$
2,723

 
$
2,562

 
$

 
$
6,951

Intersegment revenues
4

 
12

 
6

 
(22
)
 

Total operating revenues
$
1,670

 
$
2,735

 
$
2,568

 
$
(22
)
 
$
6,951

Commodity Margin
$
792

 
$
516

 
$
761

 
$

 
$
2,069

Add: Mark-to-market commodity activity, net and other(2)
(1
)
 
28

 
(65
)
 
(22
)
 
(60
)
Less:
 
 
 
 
 
 
 
 


Plant operating expense
291

 
282

 
260

 
(21
)
 
812

Depreciation and amortization expense
189

 
187

 
166

 

 
542

Sales, general and other administrative expense
31

 
54

 
31

 
1

 
117

Other operating expenses
30

 
12

 
23

 
(2
)
 
63

Impairment losses
28

 
13

 

 

 
41

(Gain) on sale of assets, net

 

 
(27
)
 

 
(27
)
(Income) from unconsolidated subsidiaries

 

 
(17
)
 

 
(17
)
Income (loss) from operations
222

 
(4
)
 
260

 

 
478

Interest expense
 
 
 
 
 
 
 
 
469

Debt extinguishment costs and other (income) expense, net
 
 
 
 
 
 
 
 
42

Loss before income taxes
 
 
 
 
 
 
 
 
$
(33
)

 
Nine Months Ended September 30, 2016
 
West
 
Texas
 
East
 
Consolidation
and
Elimination
 
Total
Revenues from external customers
$
1,159

 
$
2,129

 
$
1,846

 
$

 
$
5,134

Intersegment revenues
4

 
10

 
9

 
(23
)
 

Total operating revenues
$
1,163

 
$
2,139

 
$
1,855

 
$
(23
)
 
$
5,134

Commodity Margin
$
749

 
$
511

 
$
797

 
$

 
$
2,057

Add: Mark-to-market commodity activity, net and other(2)
(5
)
 
7

 
(44
)
 
(21
)
 
(63
)
Less:
 
 
 
 
 
 
 
 
 
Plant operating expense
268

 
236

 
258

 
(21
)
 
741

Depreciation and amortization expense
168

 
159

 
163

 

 
490

Sales, general and other administrative expense
27

 
43

 
36

 

 
106

Other operating expenses
23

 
6

 
27

 
(1
)
 
55

Impairment losses
13

 

 

 

 
13

(Income) from unconsolidated subsidiaries

 

 
(16
)
 

 
(16
)
Income from operations
245


74

 
285

 
1

 
605

Interest expense
 
 
 
 
 
 
 
 
472

Debt extinguishment costs and other (income) expense, net
 
 
 
 
 
 
 
 
33

Income before income taxes
 
 
 
 
 
 
 
 
$
100

_________
(1)
Includes $33 million and $40 million of lease levelization and $39 million and $25 million of amortization expense for the three months ended September 30, 2017 and 2016, respectively.
(2)
Includes $(13) million and $(2) million of lease levelization and $143 million and $79 million of amortization expense for the nine months ended September 30, 2017 and 2016, respectively.
Basis of Presentation and Summary of Significant Accounting Policies (Policies)
Basis of Interim Presentation — The accompanying unaudited, interim Consolidated Condensed Financial Statements of Calpine Corporation, a Delaware corporation, and consolidated subsidiaries have been prepared pursuant to the rules and regulations of the SEC. In the opinion of management, the Consolidated Condensed Financial Statements include the normal, recurring adjustments necessary for a fair statement of the information required to be set forth therein. Certain information and note disclosures, normally included in financial statements prepared in accordance with U.S. GAAP, have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, these financial statements should be read in conjunction with our audited Consolidated Financial Statements for the year ended December 31, 2016, included in our 2016 Form 10-K. The results for interim periods are not indicative of the results for the entire year primarily due to acquisitions and disposals of assets, seasonal fluctuations in our revenues and expenses, timing of major maintenance expense, variations resulting from the application of the method to calculate the provision for income tax for interim periods, volatility of commodity prices and mark-to-market gains and losses from commodity and interest rate derivative contracts.
Use of Estimates in Preparation of Financial Statements — The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures included in our Consolidated Condensed Financial Statements. Actual results could differ from those estimates.
Reclassifications We have reclassified certain prior period amounts for comparative purposes. These reclassifications did not have a material effect on our financial condition, results of operations or cash flows.
Cash and Cash Equivalents — We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. We have cash and cash equivalents held in non-corporate accounts relating to certain project finance facilities and lease agreements that require us to establish and maintain segregated cash accounts. These accounts have been pledged as security in favor of the lenders under such project finance facilities, and the use of certain cash balances on deposit in such accounts is limited, at least temporarily, to the operations of the respective projects.
Restricted Cash — Certain of our debt agreements, lease agreements or other operating agreements require us to establish and maintain segregated cash accounts, the use of which is restricted, making these cash funds unavailable for general use. These amounts are held by depository banks in order to comply with the contractual provisions requiring reserves for payments such as for debt service, rent and major maintenance or with applicable regulatory requirements. Funds that can be used to satisfy obligations due during the next 12 months are classified as current restricted cash, with the remainder classified as non-current restricted cash. Restricted cash is generally invested in accounts earning market rates; therefore, the carrying value approximates fair value. Such cash is excluded from cash and cash equivalents on our Consolidated Condensed Balance Sheets and Statements of Cash Flows.
We have a 50% partnership interest in Greenfield LP and in Whitby. Greenfield LP and Whitby are VIEs; however, we do not have the power to direct the most significant activities of these entities and therefore do not consolidate them. Greenfield LP is a limited partnership between certain subsidiaries of ours and of Mitsui & Co., Ltd., which operates the Greenfield Energy Centre, a 1,038 MW natural gas-fired, combined-cycle power plant located in Ontario, Canada. We and Mitsui & Co., Ltd. each hold a 50% interest in Greenfield LP. Whitby is a limited partnership between certain of our subsidiaries and Atlantic Packaging Ltd., which operates the Whitby facility, a 50 MW natural gas-fired, simple-cycle cogeneration power plant located in Ontario, Canada. We and Atlantic Packaging Ltd. each hold a 50% partnership interest in Whitby.
In December 2016, we acquired Calpine Receivables, a bankruptcy remote entity created for the special purpose of purchasing trade accounts receivable from Calpine Solutions under the Accounts Receivable Sales Program. Calpine Receivables is a VIE. We have determined that we do not have the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance nor the obligation to absorb losses or receive benefits from the VIE. Accordingly, we have determined that we are not the primary beneficiary of Calpine Receivables because we do not have the power to affect its financial performance as the unaffiliated financial institutions that purchase the receivables from Calpine Receivables control the selection criteria of the receivables sold and appoint the servicer of the receivables which controls management of default. Thus, we do not consolidate Calpine Receivables in our Consolidated Condensed Financial Statements and use the equity method of accounting to record our net interest in Calpine Receivables.
We account for these entities under the equity method of accounting and include our net equity interest in investments in unconsolidated subsidiaries on our Consolidated Condensed Balance Sheets.
We consolidate all of our VIEs where we have determined that we are the primary beneficiary.
We measure the fair value of our Senior Unsecured Notes, First Lien Term Loans, First Lien Notes and CCFC Term Loans using market information, including quoted market prices or dealer quotes for the identical liability when traded as an asset (categorized as level 2). We measure the fair value of our project financing, notes payable and other debt instruments using discounted cash flow analyses based on our current borrowing rates for similar types of borrowing arrangements (categorized as level 3). We do not have any debt instruments with fair value measurements categorized as level 1 within the fair value hierarchy.
Cash Equivalents — Highly liquid investments which meet the definition of cash equivalents, primarily investments in money market accounts and other interest-bearing accounts, are included in both our cash and cash equivalents and our restricted cash on our Consolidated Condensed Balance Sheets. Certain of our money market accounts invest in U.S. Treasury securities or other obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities. We do not have any cash equivalents invested in institutional prime money market funds which require use of a floating net asset value and are subject to liquidity fees and redemption restrictions. Certain of our cash equivalents are classified within level 1 of the fair value hierarchy.
Derivatives — The primary factors affecting the fair value of our derivative instruments at any point in time are the volume of open derivative positions (MMBtu, MWh and $ notional amounts); changing commodity market prices, primarily for power and natural gas; our credit standing and that of our counterparties and customers for energy commodity derivatives; and prevailing interest rates for our interest rate hedging instruments. Prices for power and natural gas and interest rates are volatile, which can result in material changes in the fair value measurements reported in our financial statements in the future.
We utilize market data, such as pricing services and broker quotes, and assumptions that we believe market participants would use in pricing our assets or liabilities including assumptions about the risks inherent to the inputs in the valuation technique. These inputs can be either readily observable, market corroborated or generally unobservable. The market data obtained from broker pricing services is evaluated to determine the nature of the quotes obtained and, where accepted as a reliable quote, used to validate our assessment of fair value. We use other qualitative assessments to determine the level of activity in any given market. We primarily apply the market approach and income approach for recurring fair value measurements and utilize what we believe to be the best available information. We utilize valuation techniques that seek to maximize the use of observable inputs and minimize the use of unobservable inputs. We classify fair value balances based on the observability of those inputs.
The fair value of our derivatives includes consideration of our credit standing, the credit standing of our counterparties and customers and the effect of credit enhancements, if any. We have also recorded credit reserves in the determination of fair value based on our expectation of how market participants would determine fair value. Such valuation adjustments are generally based on market evidence, if available, or our best estimate.
Our level 1 fair value derivative instruments primarily consist of power and natural gas swaps, futures and options traded on the NYMEX or Intercontinental Exchange.
Our level 2 fair value derivative instruments primarily consist of interest rate hedging instruments and OTC power and natural gas forwards for which market-based pricing inputs in the principal or most advantageous market are representative of executable prices for market participants. These inputs are observable at commonly quoted intervals for substantially the full term of the instruments. In certain instances, our level 2 derivative instruments may utilize models to measure fair value. These models are industry-standard models that incorporate various assumptions, including quoted interest rates, correlation, volatility, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.
Our level 3 fair value derivative instruments may consist of OTC power and natural gas forwards and options where pricing inputs are unobservable, as well as other complex and structured transactions primarily for the sale and purchase of power and natural gas to both wholesale counterparties and retail customers. Complex or structured transactions are tailored to our customers’ needs and can introduce the need for internally-developed model inputs which might not be observable in or corroborated by the market. When such inputs have a significant effect on the measurement of fair value, the instrument is categorized in level 3. Our valuation models may incorporate historical correlation information and extrapolate available broker and other information to future periods. OTC options are valued using industry-standard models, including the Black-Scholes option-pricing model. At each balance sheet date, we perform an analysis of all instruments subject to fair value measurement and include in level 3 all of those whose fair value is based on significant unobservable inputs.
Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect our estimate of the fair value of our assets and liabilities and their placement within the fair value hierarchy levels.
Derivative Instruments — During 2008, we established our accounting policy related to the presentation of our derivative instruments on our Consolidated Condensed Balance Sheets. Historically, we separately reflected on a gross basis the fair value of our current and long-term derivative assets and liabilities and related cash collateral executed with the same counterparty under a master netting arrangement. Effective September 30, 2017, we reflect on a net basis the fair value amounts associated with our current and long-term derivative assets and liabilities and the related amounts recognized for the right to reclaim, or the obligation to return, cash collateral on our Consolidated Condensed Balance Sheets. This policy is preferable as it more accurately reflects counterparty credit risk, liquidity risk and the contractual rights and obligations under these arrangements.
During the third quarter of 2017, we elected to begin offsetting fair value amounts associated with our derivative instruments and related cash collateral and margin deposits on our Consolidated Condensed Balance Sheets that are executed with the same counterparty under master netting arrangements. Our netting arrangements include a right to set off or net together purchases and sales of similar products in the margining or settlement process. In some instances, we have also negotiated cross commodity netting rights which allow for the net presentation of activity with a given counterparty regardless of product purchased or sold. We also post cash collateral in support of our derivative instruments which may also be subject to a master netting arrangement with the same counterparty. See Note 1 for a further description of the change in accounting principle associated with our election to offset fair value amounts associated with our derivative instruments.
We recognize all derivative instruments that qualify for derivative accounting treatment as either assets or liabilities and measure those instruments at fair value unless they qualify for, and we elect, the normal purchase normal sale exemption. For transactions in which we elect the normal purchase normal sale exemption, gains and losses are not reflected on our Consolidated Condensed Statements of Operations until the period of delivery. Revenues and expenses derived from instruments that qualified for hedge accounting or represent an economic hedge are recorded in the same financial statement line item as the item being hedged. Hedge accounting requires us to formally document, designate and assess the effectiveness of transactions that receive hedge accounting. We present the cash flows from our derivatives in the same category as the item being hedged (or economically hedged) within operating activities on our Consolidated Condensed Statements of Cash Flows unless they contain an other-than-insignificant financing element in which case their cash flows are classified within financing activities.
Cash Flow Hedges — We only apply hedge accounting to our interest rate hedging instruments. We report the effective portion of the mark-to-market gain or loss on our interest rate hedging instruments designated and qualifying as a cash flow hedging instrument as a component of OCI and reclassify such gains and losses into earnings in the same period during which the hedged forecasted transaction affects earnings. Gains and losses due to ineffectiveness on interest rate hedging instruments are recognized currently in earnings as a component of interest expense. If it is determined that the forecasted transaction is no longer probable of occurring, then hedge accounting will be discontinued prospectively and future changes in fair value are recorded in earnings. If the hedging instrument is terminated or de-designated prior to the occurrence of the hedged forecasted transaction, the net accumulated gain or loss associated with the changes in fair value of the hedge instrument remains deferred in AOCI until such time as the forecasted transaction affects earnings or until it is determined that the forecasted transaction is probable of not occurring.
Derivatives Not Designated as Hedging Instruments — We enter into power, natural gas, interest rate, environmental product and fuel oil transactions that primarily act as economic hedges to our asset and interest rate portfolio, but either do not qualify as hedges under the hedge accounting guidelines or qualify under the hedge accounting guidelines and the hedge accounting designation has not been elected. Changes in fair value of commodity derivatives not designated as hedging instruments are recognized currently in earnings and are separately stated on our Consolidated Condensed Statements of Operations in mark-to-market gain/loss as a component of operating revenues (for physical and financial power and Heat Rate and commodity option activity) and fuel and purchased energy expense (for physical and financial natural gas, power, environmental product and fuel oil activity). Changes in fair value of interest rate derivatives not designated as hedging instruments are recognized currently in earnings as interest expense.
On a quarterly basis, we review our litigation activities and determine if an unfavorable outcome to us is considered “remote,” “reasonably possible” or “probable” as defined by U.S. GAAP. Where we determine an unfavorable outcome is probable and is reasonably estimable, we accrue for potential litigation losses. The liability we may ultimately incur with respect to such litigation matters, in the event of a negative outcome, may be in excess of amounts currently accrued, if any; however, we do not expect that the reasonably possible outcome of these litigation matters would, individually or in the aggregate, have a material adverse effect on our financial condition, results of operations or cash flows. Where we determine an unfavorable outcome is not probable or reasonably estimable, we do not accrue for any potential litigation loss. The ultimate outcome of these litigation matters cannot presently be determined, nor can the liability that could potentially result from a negative outcome be reasonably estimated. As a result, we give no assurance that such litigation matters would, individually or in the aggregate, not have a material adverse effect on our financial condition, results of operations or cash flows.
Revenue Recognition — In May 2014, the FASB issued Accounting Standards Update 2014-09, “Revenue from Contracts with Customers.” The comprehensive new revenue recognition standard will supersede all existing revenue recognition guidance. The core principle of the standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires expanded disclosures surrounding revenue recognition. The standard allows for either full retrospective or modified retrospective adoption. In August 2015, the FASB deferred the effective date of Accounting Standards Update 2014-09 for public entities by one year, such that the standard will become effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. The standard permits entities to adopt early, but only as of the original effective date. In March 2016, the FASB issued Accounting Standards Update 2016-08 “Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” which clarifies implementation guidance for principal versus agent considerations in the new revenue recognition standard. In May 2016, the FASB issued Accounting Standards Update 2016-12 “Narrow-Scope Improvements and Practical Expedients” which addresses assessing the collectability of a contract, the presentation of sales taxes and other taxes collected from customers, non-cash consideration and completed contracts and contract modifications at transition. We plan to adopt the standard in the first quarter of 2018 using the modified retrospective transition approach. We are finalizing our evaluation of the effect the revenue recognition standards will have on our revenue contracts such as our PPAs and tolling agreements as well as the additional disclosure requirements associated with the new standard; however, we do not expect the adoption of this standard will have a material effect on our financial condition, results of operations or cash flows. Upon adoption, we intend to elect the practical expedient that would allow an entity to recognize revenue in the amount to which the entity has the right to invoice to the extent we determine that we have a right to consideration from the customer in an amount that corresponds directly with the value provided based on our performance completed to date.
Inventory In July 2015, the FASB issued Accounting Standards Update 2015-11, “Simplifying the Measurement of Inventory.” The standard changes the inventory valuation method from the lower of cost or market to the lower of cost or net realizable value for inventory valued under the first-in, first-out or average cost methods. This standard is effective for fiscal years beginning after December 15, 2016, including interim periods and requires prospective adoption with early adoption permitted. We adopted Accounting Standards Update 2015-11 in the first quarter of 2017 which did not have a material effect on our financial condition, results of operations or cash flows.
Leases — In February 2016, the FASB issued Accounting Standards Update 2016-02, “Leases.” The comprehensive new lease standard will supersede all existing lease guidance. The standard requires that a lessee should recognize a right-to-use asset and a lease liability for substantially all operating leases based on the present value of the minimum rental payments. Entities may make an accounting policy election to not recognize lease assets and liabilities for leases with a term of 12 months or less. For lessors, the accounting for leases remains substantially unchanged. The standard also requires expanded disclosures surrounding leases. The standard is effective for fiscal periods beginning after December 15, 2018, including interim periods within that reporting period and requires modified retrospective adoption with early adoption permitted. We expect to adopt the standard in the first quarter of 2019. We have completed our initial evaluation of the standard and believe that the key changes that will affect us relate to our accounting for operating leases that are currently off-balance sheet and tolling contracts which we currently account for as operating leases. Additionally, we are evaluating the potential effects of the removal of the real estate guidance currently applicable to lessors that will be abrogated under Accounting Standards Update 2014-09, “Revenue from Contracts with Customers.” We are also considering electing the practical expedient in our implementation of the standard; however, this may change as we complete our assessment of the standard.
Statement of Cash Flows — In August 2016, the FASB issued Accounting Standards Update 2016-15, “Classification of Certain Cash Receipts and Cash Payments.” The standard addresses several matters of diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows including the presentation of debt extinguishment costs and distributions received from equity method investments. The standard is effective for fiscal years beginning after December 15, 2017, including interim periods and requires retrospective adoption with early adoption permitted. We do not anticipate a material effect on our financial condition, results of operations or cash flows as a result of adopting this standard.
Restricted Cash — In November 2016, the FASB issued Accounting Standards Update 2016-18, “Restricted Cash.” The standard requires restricted cash to be included with cash and cash equivalents when reconciling the beginning and ending amounts in the statement of cash flows and also requires disclosures regarding the nature of restrictions on cash, cash equivalents and restricted cash. The standard is effective for fiscal years beginning after December 15, 2017, including interim periods and requires retrospective adoption with early adoption permitted. We do not anticipate a material effect on our financial condition, results of operations or cash flows as a result of adopting this standard.
Intangibles – Goodwill and Other — In January 2017, the FASB issued Accounting Standards Update 2017-04, “Simplifying the Test for Goodwill Impairment.” The standard eliminates the second step in the goodwill impairment test which requires an entity to determine the implied fair value of the reporting unit’s goodwill. Instead, an entity should recognize an impairment loss if the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, with the impairment loss not to exceed the amount of goodwill allocated to the reporting unit. The standard is effective for annual and interim goodwill impairment tests conducted in fiscal years beginning after December 15, 2019, with early adoption permitted. We do not anticipate a material effect on our financial condition, results of operations or cash flows as a result of adopting this standard.
Derivatives and Hedging — In August 2017, the FASB issued Accounting Standards Update 2017-12, “Targeted Improvements to Accounting for Hedging Activities.” The standard better aligns an entity’s hedging activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results in the financial statements. The standard will prospectively make hedge accounting easier to apply to hedging activities and also enhances disclosure requirements for how hedge transactions are reflected in the financial statements when hedge accounting is elected. The standard is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We are currently assessing the future effect this standard may have on our financial condition, results of operations or cash flows.
Basis of Presentation and Summary of Significant Accounting Policies (Tables)
The revised presentation of our derivative instruments is considered a change in accounting principle; thus, we retroactively applied the new accounting to our Consolidated Condensed Balance Sheet as of December 31, 2016 which did not result in a change in our total stockholder’s equity, results of operations or cash flows for any previously reported periods. See Notes 5, 6 and 7 for additional information on the assets and liabilities that are reflected on a net basis in our Consolidated Condensed Balance Sheets. The table below reflects the effect of the new accounting on previously reported financial information (in millions):
 
 
As Previously Reported
 
Effect of Offsetting Adjustment
 
As Adjusted
Consolidated Condensed Balance Sheet as of December 31, 2016
 
 
 
 
 
 
Margin deposits and other prepaid expense
 
$
441

 
$
(77
)
 
$
364

Derivative assets, current
 
$
1,725

 
$
(1,504
)
 
$
221

Total current assets
 
$
4,432


$
(1,581
)

$
2,851

Long-term derivative assets
 
$
543

 
$
(243
)
 
$
300

Total assets
 
$
19,317

 
$
(1,824
)
 
$
17,493

 
 
 
 
 
 
 
Derivative liabilities, current
 
$
1,630

 
$
(1,492
)
 
$
138

Other current liabilities
 
$
528

 
$
(5
)
 
$
523

Total current liabilities
 
$
3,702

 
$
(1,497
)
 
$
2,205

Long-term derivative liabilities
 
$
476

 
$
(327
)
 
$
149

Total liabilities
 
$
15,978

 
$
(1,824
)
 
$
14,154

 
 
 
 
 
 
 
Consolidated Condensed Statement of Cash Flows for the Nine Months Ended September 30, 2016
 
 
 
 
 
 
Change in operating assets and liabilities, net of effects of acquisitions:
 
 
 
 
 
 
Derivative instruments, net
 
$
(71
)
 
$
(83
)
 
$
(154
)
Other assets
 
$
(75
)
 
$
76

 
$
1

Accounts payable and accrued expenses
 
$
46

 
$
7

 
$
53

Net cash provided by operating activities
 
$
667

 
$

 
$
667

The table below represents the components of our restricted cash as of September 30, 2017 and December 31, 2016 (in millions):
 
September 30, 2017
 
December 31, 2016
 
Current
 
Non-Current
 
Total
 
Current
 
Non-Current
 
Total
Debt service
$
22

 
$
7

 
$
29

 
$
11

 
$
8

 
$
19

Construction/major maintenance
25

 
17

 
42

 
45

 
6

 
51

Security/project/insurance
145

 

 
145

 
114

 

 
114

Other
4

 
2

 
6

 
3

 
1

 
4

Total
$
196

 
$
26

 
$
222

 
$
173

 
$
15

 
$
188

Property, Plant and Equipment, Net — At September 30, 2017 and December 31, 2016, the components of property, plant and equipment are stated at cost less accumulated depreciation as follows (in millions):
 
September 30, 2017
 
December 31, 2016
 
Depreciable Lives
Buildings, machinery and equipment
$
16,512

 
$
16,468

 
3
46
 Years
Geothermal properties
1,480

 
1,377

 
13
58
 Years
Other
235

 
259

 
3
46
 Years
 
18,227

 
18,104

 
 
 
 
 
Less: Accumulated depreciation
6,265

 
5,865

 
 
 
 
 
 
11,962

 
12,239

 
 
 
 
 
Land
117

 
116

 
 
 
 
 
Construction in progress
754

 
658

 
 
 
 
 
Property, plant and equipment, net
$
12,833

 
$
13,013

 
 
 
 
 
Goodwill — We have not recorded any impairment losses associated with our goodwill. The change in goodwill by segment during the nine months ended September 30, 2017 was as follows (in millions):
 
West
 
Texas
 
East
 
Total
Goodwill at December 31, 2016
$
68

 
$
31

 
$
88

 
$
187

Acquisition of North American Power

 

 
49

 
49

Purchase price allocation adjustments(1)
(2
)
 
1

 
8

 
7

Goodwill at September 30, 2017
$
66

 
$
32

 
$
145

 
$
243


____________
(1)
The purchase price allocation adjustment in the East segment represents adjustments of $17 million for North American Power and $(9) million for Calpine Solutions.
Variable Interest Entities and Unconsolidated Investments in Power Plants (Tables)
At September 30, 2017 and December 31, 2016, our equity method investments included on our Consolidated Condensed Balance Sheets were comprised of the following (in millions):
 
Ownership Interest as of
September 30, 2017
 
September 30, 2017
 
December 31, 2016
Greenfield LP
50%
 
$
92

 
$
73

Whitby
50%
 
4

 
16

Calpine Receivables
100%
 
10

 
10

Total investments in unconsolidated subsidiaries
 
 
$
106

 
$
99

The following table sets forth details of our (income) from unconsolidated subsidiaries for the periods indicated (in millions):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2017
 
2016
 
2017
 
2016
Greenfield LP
$
(5
)
 
$
(3
)
 
$
(11
)
 
$
(8
)
Whitby
(2
)
 
(3
)
 
(6
)
 
(8
)
Total
$
(7
)
 
$
(6
)

$
(17
)

$
(16
)
Debt (Tables)
Our debt at September 30, 2017 and December 31, 2016, was as follows (in millions):
 
September 30, 2017

December 31, 2016
Senior Unsecured Notes
$
3,415

 
$
3,412

First Lien Term Loans
3,152

 
3,165

First Lien Notes
1,843

 
2,290

Project financing, notes payable and other
1,575

 
1,597

CCFC Term Loans
1,544

 
1,553

Capital lease obligations
121

 
162

Subtotal
11,650

 
12,179

Less: Current maturities
369

 
748

Total long-term debt
$
11,281

 
$
11,431


The amounts outstanding under our Senior Unsecured Notes are summarized in the table below (in millions):
 
September 30, 2017
 
December 31, 2016
2023 Senior Unsecured Notes
$
1,238

 
$
1,237

2024 Senior Unsecured Notes
643

 
643

2025 Senior Unsecured Notes
1,534

 
1,532

Total Senior Unsecured Notes
$
3,415

 
$
3,412

The amounts outstanding under our senior secured First Lien Term Loans are summarized in the table below (in millions):
 
September 30, 2017
 
December 31, 2016
2017 First Lien Term Loan(1)
$
149

 
$
537

2019 First Lien Term Loan
389

 

2023 First Lien Term Loans
1,067

 
1,071

2024 First Lien Term Loan
1,547

 
1,557

Total First Lien Term Loans
$
3,152

 
$
3,165


____________
(1)
For the nine months ended September 30, 2017, we used cash on hand to repay $400 million of our outstanding 2017 First Lien Term Loan. We recorded approximately $1 million and $4 million in debt extinguishment costs for the three and nine months ended September 30, 2017, related to the partial repayment of our 2017 First Lien Term Loan.
The amounts outstanding under our senior secured First Lien Notes are summarized in the table below (in millions):
 
September 30, 2017
 
December 31, 2016
2022 First Lien Notes
$
741

 
$
739

2023 First Lien Notes(1)

 
450

2024 First Lien Notes
485

 
485

2026 First Lien Notes
617

 
616

Total First Lien Notes
$
1,843

 
$
2,290

____________
(1)
On March 6, 2017, we used cash on hand along with the proceeds from our 2019 First Lien Term Loan to redeem the remaining $453 million of our 2023 First Lien Notes, plus accrued and unpaid interest. During the first quarter of 2017, we recorded approximately $21 million in debt extinguishment costs related to the redemption of our 2023 First Lien Notes.
The table below represents amounts issued under our letter of credit facilities at September 30, 2017 and December 31, 2016 (in millions):
 
September 30, 2017
 
December 31, 2016
Corporate Revolving Facility(1)
$
474

 
$
535

CDHI
246

 
250

Various project financing facilities
230

 
206

Total
$
950

 
$
991

____________
(1)
The Corporate Revolving Facility represents our primary revolving facility.
The following table details the fair values and carrying values of our debt instruments at September 30, 2017 and December 31, 2016 (in millions):
 
September 30, 2017
 
December 31, 2016
 
Fair Value
 
Carrying Value
 
Fair Value
 
Carrying Value
Senior Unsecured Notes
$
3,307

 
$
3,415

 
$
3,343

 
$
3,412

First Lien Term Loans
3,202

 
3,152

 
3,244

 
3,165

First Lien Notes
1,905

 
1,843

 
2,349

 
2,290

Project financing, notes payable and other(1)
1,516

 
1,484

 
1,543

 
1,506

CCFC Term Loans
1,554

 
1,544

 
1,567

 
1,553

Total
$
11,484

 
$
11,438

 
$
12,046

 
$
11,926

____________
(1)
Excludes a lease that is accounted for as a failed sale-leaseback transaction under U.S. GAAP.
Assets and Liabilities with Recurring Fair Value Measurements (Tables)
The following tables present our financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2017 and December 31, 2016, by level within the fair value hierarchy:
 
Assets and Liabilities with Recurring Fair Value Measures as of September 30, 2017
 
Level 1    
 
Level 2    
 
Level 3    
 
Total    
 
(in millions)
Assets:
 
 
 
 
 
 
 
Cash equivalents(1)
$
173

 
$

 
$

 
$
173

Commodity instruments:
 
 
 
 
 
 
 
Commodity exchange traded futures and swaps contracts
605

 

 

 
605

Commodity forward contracts(2)

 
362

 
332

 
694

Interest rate hedging instruments

 
20

 

 
20

Effect of netting and allocation of collateral(3)(4)
(605
)
 
(203
)
 
(21
)
 
(829
)
Total assets
$
173

 
$
179

 
$
311

 
$
663

Liabilities:
 
 
 
 
 
 
 
Commodity instruments:
 
 
 
 
 
 
 
Commodity exchange traded futures and swaps contracts
656

 

 

 
656

Commodity forward contracts(2)

 
355

 
64

 
419

Interest rate hedging instruments

 
52

 

 
52

Effect of netting and allocation of collateral(3)(4)
(656
)
 
(220
)
 
(35
)
 
(911
)
Total liabilities
$

 
$
187

 
$
29

 
$
216

 
Assets and Liabilities with Recurring Fair Value Measures as of December 31, 2016
 
Level 1    
 
Level 2    
 
Level 3    
 
Total    
 
(in millions)
Assets:
 
 
 
 
 
 
 
Cash equivalents(1)
$
153

 
$

 
$

 
$
153

Commodity instruments:
 
 
 
 
 
 
 
Commodity exchange traded futures and swaps contracts
1,542

 

 

 
1,542

Commodity forward contracts(2)

 
231

 
466

 
697

Interest rate hedging instruments

 
29

 

 
29

Effect of netting and allocation of collateral(3)(4)
(1,542
)
 
$
(188
)
 
(17
)
 
(1,747
)
Total assets
$
153

 
$
72

 
$
449

 
$
674

Liabilities:
 
 
 
 
 
 
 
Commodity instruments:
 
 
 
 
 
 
 
Commodity exchange traded futures and swaps contracts
1,570

 

 

 
1,570

Commodity forward contracts(2)

 
411

 
67

 
478

Interest rate hedging instruments

 
58

 

 
58

Effect of netting and allocation of collateral(3)(4)
(1,570
)
 
$
(215
)
 
(34
)
 
(1,819
)
Total liabilities
$

 
$
254

 
$
33

 
$
287

___________
(1)
At September 30, 2017 and December 31, 2016, we had cash equivalents of $32 million and $26 million included in cash and cash equivalents and $141 million and $127 million included in restricted cash, respectively.
(2)
Includes OTC swaps and options and retail contracts.
(3)
During the third quarter of 2017, we elected to offset fair value amounts recognized for derivative instruments executed with the same counterparty under a master netting arrangement for financial statement presentation; therefore, amounts recognized for the right to reclaim, or the obligation to return, cash collateral are presented net with the corresponding derivative instrument fair values. See Note 1 for a further description of the change in accounting principle associated with our election to offset fair value amounts associated with our derivative instruments. See Note 6 for further discussion of our derivative instruments subject to master netting arrangements.
(4)
Cash collateral posted with (received from) counterparties allocated to level 1, level 2 and level 3 derivative instruments totaled $51 million, $17 million and $14 million, respectively, at September 30, 2017. Cash collateral posted with (received from) counterparties allocated to level 1, level 2 and level 3 derivative instruments totaled $28 million, $27 million and $17 million, respectively, at December 31, 2016.
The following table presents quantitative information for the unobservable inputs used in our most significant level 3 fair value measurements at September 30, 2017 and December 31, 2016:
 
 
Quantitative Information about Level 3 Fair Value Measurements
 
 
 
September 30, 2017
 
 
 
Fair Value, Net Asset
 
 
 
Significant Unobservable
 
 
 
 
 
 
 
(Liability)
 
Valuation Technique
 
Input
 
Range
 
 
(in millions)
 
 
 
 
 
 
 
 
 
Power Contracts
 
$
234

 
Discounted cash flow
 
Market price (per MWh)
 
$
6.55

$89.83
/MWh
Power Congestion Products
 
$
10

 
Discounted cash flow
 
Market price (per MWh)
 
$
(13.13
)
$6.85
/MWh
Natural Gas Contracts
 
$
38

 
Discounted cash flow
 
Market price (per MMBtu)
 
$
0.97

$9.35
/MMBtu
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2016
 
 
 
Fair Value, Net Asset
 
 
 
Significant Unobservable
 
 
 
 
 
 
 
(Liability)
 
Valuation Technique
 
Input
 
Range
 
 
(in millions)
 
 
 
 
 
 
 
 
 
Power Contracts
 
$
376

 
Discounted cash flow
 
Market price (per MWh)
 
$
9.60

$86.34
/MWh
Power Congestion Products
 
$
12

 
Discounted cash flow
 
Market price (per MWh)
 
$
(7.52
)
$13.62
/MWh
Natural Gas Contracts
 
$
18

 
Discounted cash flow
 
Market price (per MMBtu)
 
$
1.95

$5.66
/MMBtu
The following table sets forth a reconciliation of changes in the fair value of our net derivative assets (liabilities) classified as level 3 in the fair value hierarchy for the periods indicated (in millions):
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2017
 
2016
 
2017
 
2016
Balance, beginning of period
 
$
303

 
$
(61
)
 
$
416

 
$
(46
)
Realized and mark-to-market gains (losses):
 
 
 
 
 
 
 
 
Included in net loss:
 
 
 
 
 
 
 
 
Included in operating revenues(1)
 
26

 
30

 
125

 
9

Included in fuel and purchased energy expense(2)
 
(12
)
 
(31
)
 
(1
)
 
(24
)
Change in collateral
 
4

 
(2
)
 
(4
)
 

Purchases and settlements:
 
 
 
 
 
 
 
 
Purchases
 
1

 
1

 
2

 
4

Settlements
 
(40
)
 
15

 
(129
)
 
(4
)
Transfers in and/or out of level 3(3):
 
 
 
 
 
 
 
 
Transfers into level 3(4)
 
3

 
1

 
(5
)
 

Transfers out of level 3(5)
 
(3
)
 
75

 
(122
)
 
89

Balance, end of period
 
$
282

 
$
28

 
$
282

 
$
28

Change in unrealized gains (losses) relating to instruments still held at end of period
 
$
14

 
$
(1
)
 
$
124

 
$
(15
)
___________
(1)
For power contracts and other power-related products, included on our Consolidated Condensed Statements of Operations.
(2)
For natural gas and power contracts, swaps and options, included on our Consolidated Condensed Statements of Operations.
(3)
We transfer amounts among levels of the fair value hierarchy as of the end of each period. There were no transfers into or out of level 1 for each of the three and nine months ended September 30, 2017 and 2016.
(4)
There were $3 million and $1 million in gains transferred out of level 2 into level 3 for the three months ended September 30, 2017 and 2016, and $(5) million and nil in losses transferred out of level 2 into level 3 for the nine months ended September 30, 2017 and 2016, respectively, due to changes in market liquidity in various power markets.
(5)
We had $3 million in gains and $(75) million in losses transferred out of level 3 into level 2 for the three months ended September 30, 2017 and 2016, respectively, and $122 million in gains and $(89) million in losses transferred out of level 3 into level 2 for the nine months ended September 30, 2017 and 2016, respectively, due to changes in market liquidity in various power markets.
Derivative Instruments (Tables)
As of September 30, 2017 and December 31, 2016, the net forward notional buy (sell) position of our outstanding commodity derivative instruments that did not qualify or were not designated under the normal purchase normal sale exemption and our interest rate hedging instruments were as follows (in millions):
Derivative Instruments
 
Notional Amounts
 
September 30, 2017
 
December 31, 2016
Power (MWh)
 
(98
)
 
(86
)
Natural gas (MMBtu)
 
398

 
613

Environmental credits (Tonnes)
 
19

 
16

Interest rate hedging instruments
 
$
4,600

(1) 
$
3,721


___________
(1)
We entered into interest rate hedging instruments during the first quarter of 2017 to hedge approximately $1.0 billion of variable rate debt for 2018 through 2020 and approximately $500 million of variable rate debt for 2021 through 2022. We also extended the tenor of certain interest rate hedging instruments, which effectively places a ceiling on LIBOR on $2.5 billion of variable rate corporate debt through 2020 and $1.25 billion of variable rate corporate debt in 2021.
The following tables present the fair values of our derivative instruments and our net exposure after offsetting amounts subject to a master netting arrangement with the same counterparty to our derivative instruments recorded on our Consolidated Condensed Balance Sheets by location and hedge type at September 30, 2017 and December 31, 2016 (in millions):
 
 
September 30, 2017
 
 
Gross Amounts of Assets and (Liabilities)
 
Gross Amounts Offset on the Consolidated Condensed Balance Sheets
 
Net Amount Presented on the Consolidated Condensed Balance Sheet(1)
Derivative assets:
 
 
 
 
 
 
Commodity exchange traded futures and swaps contracts
 
$
472

 
$
(472
)
 
$

Commodity forward contracts
 
338

 
(133
)
 
205

Interest rate hedging instruments
 
2

 
(1
)
 
1

Total current derivative assets(2)
 
$
812

 
$
(606
)
 
$
206

Commodity exchange traded futures and swaps contracts
 
133

 
(133
)
 

Commodity forward contracts
 
356

 
(82
)
 
274

Interest rate hedging instruments
 
18

 
(8
)
 
10

Total long-term derivative assets(2)
 
$
507

 
$
(223
)
 
$
284

Total derivative assets
 
$
1,319

 
$
(829
)
 
$
490

 
 
 
 
 
 
 
Derivative (liabilities):
 
 
 
 
 
 
Commodity exchange traded futures and swaps contracts
 
$
(496
)
 
$
496

 
$

Commodity forward contracts
 
(236
)
 
148

 
(88
)
Interest rate hedging instruments
 
(26
)
 
1

 
(25
)
Total current derivative (liabilities)(2)
 
$
(758
)
 
$
645

 
$
(113
)
Commodity exchange traded futures and swaps contracts
 
(160
)
 
160

 

Commodity forward contracts
 
(183
)
 
98

 
(85
)
Interest rate hedging instruments
 
(26
)
 
8

 
(18
)
Total long-term derivative (liabilities)(2)
 
$
(369
)
 
$
266

 
$
(103
)
Total derivative liabilities
 
$
(1,127
)
 
$
911

 
$
(216
)
Net derivative assets (liabilities)
 
$
192

 
$
82

 
$
274

 
 
December 31, 2016
 
 
Gross Amounts of Assets and (Liabilities)
 
Gross Amounts Offset on the Consolidated Condensed Balance Sheets
 
Net Amount Presented on the Consolidated Condensed Balance Sheet(1)
Derivative assets:
 
 
 
 
 
 
Commodity exchange traded futures and swaps contracts
 
$
1,344

 
$
(1,344
)
 
$

Commodity forward contracts
 
380

 
(160
)
 
220

Interest rate hedging instruments
 
1

 

 
1

Total current derivative assets(3)
 
$
1,725

 
$
(1,504
)
 
$
221

Commodity exchange traded futures and swaps contracts
 
198

 
(198
)
 

Commodity forward contracts
 
317

 
(45
)
 
272

Interest rate hedging instruments
 
28

 

 
28

Total long-term derivative assets(3)
 
$
543

 
$
(243
)
 
$
300

Total derivative assets
 
$
2,268

 
$
(1,747
)
 
$
521

 
 
 
 
 
 
 
Derivative (liabilities):
 
 
 
 
 
 
Commodity exchange traded futures and swaps contracts
 
$
(1,327
)
 
$
1,327

 
$

Commodity forward contracts
 
(275
)
 
165

 
(110
)
Interest rate hedging instruments
 
(28
)
 

 
(28
)
Total current derivative (liabilities)(3)
 
$
(1,630
)
 
$
1,492

 
$
(138
)
Commodity exchange traded futures and swaps contracts
 
(243
)
 
243

 

Commodity forward contracts
 
(203
)
 
84

 
(119
)
Interest rate hedging instruments
 
(30
)
 

 
(30
)
Total long-term derivative (liabilities)(3)
 
$
(476
)
 
$
327

 
$
(149
)
Total derivative liabilities
 
$
(2,106
)
 
$
1,819

 
$
(287
)
Net derivative assets (liabilities)
 
$
162

 
$
72

 
$
234

____________
(1)
At September 30, 2017 and December 31, 2016, we had $115 million and $262 million of collateral under master netting arrangements that were not offset against our derivative instruments on the Consolidated Condensed Balance Sheets.
(2)
At September 30, 2017, current and long-term derivative assets are shown net of collateral of $(4) million and $(8) million, respectively, and current and long-term derivative liabilities are shown net of collateral of $43 million and $51 million, respectively.
(3)
At December 31, 2016, current and long-term derivative assets are shown net of collateral of $(29) million and $(3) million, respectively, and current and long-term derivative liabilities are shown net of collateral of $19 million and $85 million, respectively.
 
September 30, 2017
 
December 31, 2016
 
Fair Value
of Derivative
Assets
 
Fair Value
of Derivative
Liabilities
 
Fair Value
of Derivative
Assets
 
Fair Value
of Derivative
Liabilities
Derivatives designated as cash flow hedging instruments:
 
 
 
 
 
 
 
Interest rate hedging instruments
$
11

 
$
43

 
$
29

 
$
58

Total derivatives designated as cash flow hedging instruments
$
11

 
$
43

 
$
29

 
$
58

 
 
 
 
 
 
 
 
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
Commodity instruments
$
479

 
$
173

 
$
492

 
$
229

Total derivatives not designated as hedging instruments
$
479

 
$
173

 
$
492

 
$
229

Total derivatives
$
490

 
$
216

 
$
521

 
$
287

The following tables detail the components of our total activity for both the net realized gain (loss) and the net mark-to-market gain (loss) recognized from our derivative instruments in earnings and where these components were recorded on our Consolidated Condensed Statements of Operations for the periods indicated (in millions):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2017
 
2016
 
2017
 
2016
Realized gain (loss)(1)(2)
 
 
 
 
 
 
 
Commodity derivative instruments
$
(53
)
 
$
32

 
$
20

 
$
213

Total realized gain (loss)
$
(53
)
 
$
32

 
$
20

 
$
213

 
 
 
 
 
 
 
 
Mark-to-market gain (loss)(3)
 
 
 
 
 
 
 
Commodity derivative instruments
$
66

 
$
109

 
$
39

 
$
(22
)
Interest rate hedging instruments

 

 
1

 
1

Total mark-to-market gain (loss)
$
66

 
$
109

 
$
40

 
$
(21
)
Total activity, net
$
13

 
$
141

 
$
60

 
$
192


___________
(1)
Does not include the realized value associated with derivative instruments that settle through physical delivery.
(2)
Includes amortization of acquisition date fair value of financial derivative activity related to the acquisition of Champion Energy, Calpine Solutions and North American Power.
(3)
In addition to changes in market value on derivatives not designated as hedges, changes in mark-to-market gain (loss) also includes hedge ineffectiveness and adjustments to reflect changes in credit default risk exposure.
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2017
 
2016
 
2017
 
2016
Realized and mark-to-market gain (loss)(1)
 
 
 
 
 
 
 
Derivatives contracts included in operating revenues(2)(3)
$
60

 
$
308

 
$
252

 
$
240

Derivatives contracts included in fuel and purchased energy expense(2)(3)
(47
)
 
(167
)
 
(193
)
 
(49
)
Interest rate hedging instruments included in interest expense(4)

 

 
1

 
1

Total activity, net
$
13

 
$
141

 
$
60

 
$
192


___________
(1)
In addition to changes in market value on derivatives not designated as hedges, changes in mark-to-market gain (loss) also includes adjustments to reflect changes in credit default risk exposure.
(2)
Does not include the realized value associated with derivative instruments that settle through physical delivery.
(3)
Includes amortization of acquisition date fair value of financial derivative activity related to the acquisition of Champion Energy, Calpine Solutions and North American Power.
(4)
In addition to changes in market value on interest rate hedging instruments not designated as hedges, changes in mark-to-market gain (loss) also includes hedge ineffectiveness.
The following table details the effect of our net derivative instruments that qualified for hedge accounting treatment and are included in OCI and AOCI for the periods indicated (in millions):
 
Three Months Ended September 30,
 
Three Months Ended September 30,
 
Gain (Loss) Recognized in
OCI (Effective Portion)
 
Gain (Loss) Reclassified from
AOCI into Income (Effective Portion)(3)
 
2017
 
2016
 
2017
 
2016
 
Affected Line Item on the Consolidated Condensed Statements of Operations
Interest rate hedging instruments(1)(2)
$
7

 
$
18

 
$
(10
)
 
$
(11
)
 
Interest expense
Interest rate hedging instruments(1)(2)
1

 

 
(1
)
 

 
Depreciation expense
Total
$
8

 
$
18

 
$
(11
)
 
$
(11
)
 
 
 
Nine Months Ended September 30,
 
Nine Months Ended September 30,
 
Gain (Loss) Recognized in
OCI (Effective Portion)
 
Gain (Loss) Reclassified from
AOCI into Income (Effective Portion)(3)
 
2017
 
2016
 
2017
 
2016
 
Affected Line Item on the Consolidated Condensed Statements of Operations
Interest rate hedging instruments(1)(2)
$
(12
)
 
$

 
$
(32
)
 
$
(33
)
 
Interest expense
Interest rate hedging instruments(1)(2)
5

 

 
(5
)
 

 
Depreciation expense
Total
$
(7
)
 
$

 
$
(37
)
 
$
(33
)
 
 
____________
(1)
We did not record any material gain (loss) on hedge ineffectiveness related to our interest rate hedging instruments designated as cash flow hedges during the three and nine months ended September 30, 2017 and 2016.
(2)
We recorded an income tax expense of $1 million and $3 million for each of the three and nine months ended September 30, 2017 and nil for each of the three and nine months ended September 30, 2016, in AOCI related to our cash flow hedging activities.
(3)
Cumulative cash flow hedge losses attributable to Calpine, net of tax, remaining in AOCI were $101 million and $90 million at September 30, 2017 and December 31, 2016, respectively. Cumulative cash flow hedge losses attributable to the noncontrolling interest, net of tax, remaining in AOCI were $7 million and $8 million at September 30, 2017 and December 31, 2016, respectively.
Use of Collateral (Tables)
Schedule of Collateral
The table below summarizes the balances outstanding under margin deposits, natural gas and power prepayments, and exposure under letters of credit and first priority liens for commodity procurement and risk management activities as of September 30, 2017 and December 31, 2016 (in millions):
 
September 30, 2017
 
December 31, 2016
Margin deposits(1)
$
216

 
$
350

Natural gas and power prepayments
27

 
25

Total margin deposits and natural gas and power prepayments with our counterparties(2)
$
243

 
$
375

 
 
 
 
Letters of credit issued
$
731

 
$
798

First priority liens under power and natural gas agreements
193

 
206

First priority liens under interest rate hedging instruments
41

 
55

Total letters of credit and first priority liens with our counterparties
$
965

 
$
1,059

 
 
 
 
Margin deposits posted with us by our counterparties(1)(3)
$
19

 
$
16

Letters of credit posted with us by our counterparties
33

 
43

Total margin deposits and letters of credit posted with us by our counterparties
$
52

 
$
59

___________
(1)
During the third quarter of 2017, we elected to offset fair value amounts recognized for derivative instruments executed with the same counterparty under a master netting arrangement for financial statement presentation; therefore, amounts recognized for the right to reclaim, or the obligation to return, cash collateral are presented net with the corresponding derivative instrument fair values. See Note 1 for a further description of the change in accounting principle associated with our election to offset fair value amounts associated with our derivative instruments. See Note 6 for further discussion of our derivative instruments subject to master netting arrangements.
(2)
At September 30, 2017 and December 31, 2016, $85 million and $78 million, respectively, were included in current and long-term derivative assets and liabilities, $149 million and $288 million, respectively, were included in margin deposits and other prepaid expense and $9 million and $9 million, respectively, were included in other assets on our Consolidated Condensed Balance Sheets.
(3)
At September 30, 2017 and December 31, 2016, $3 million and $6 million, respectively, were included in current and long-term derivative assets and liabilities and $16 million and $10 million, respectively, were included in other current liabilities on our Consolidated Condensed Balance Sheets.
Income Taxes Income Taxes (Tables)
Schedule of Components of Income Tax Expense (Benefit)
The table below shows our consolidated income tax expense (benefit) and our effective tax rates for the periods indicated (in millions):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2017
 
2016
 
2017
 
2016
Income tax expense (benefit)
$
(2
)
 
$
(4
)
 
$

 
$
17

Effective tax rate
(1
)%
 
(1
)%
 
%
 
20
%
Earnings (Loss) per Share (Tables)
Reconciliation of the amounts used in the basic and diluted earnings (loss) per common share computations for the three and nine months ended September 30, 2017 and 2016, are as follows (shares in thousands):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2017
 
2016
 
2017
 
2016
Diluted weighted average shares calculation:
 
 
 
 
 
 
 
Weighted average shares outstanding (basic)
355,442

 
354,215

 
355,164

 
353,929

Share-based awards
3,402

 
2,137

 

 
2,051

Weighted average shares outstanding (diluted)
358,844

 
356,352

 
355,164

 
355,980

We excluded the following items from diluted earnings per common share for the three and nine months ended September 30, 2017 and 2016, because they were anti-dilutive (shares in thousands):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2017
 
2016
 
2017
 
2016
Share-based awards
2,789

 
1,610

 
5,391

 
1,679

Stock-Based Compensation (Tables)
A summary of all of our non-qualified stock option activity for the Equity Plans for the nine months ended September 30, 2017, is as follows:
 
Number of
Shares
 
Weighted Average
Exercise Price
 
Weighted
Average
Remaining
Term
(in years)
 
Aggregate
Intrinsic Value
(in millions)
Outstanding — December 31, 2016
2,697,136

 
$
13.59

 
3.0
 
$
2

Granted
1,476,480

 
$
11.70

 
 
 
 
Exercised
4,000

 
$
9.49

 
 
 
 
Forfeited
15,721

 
$
11.69

 
 
 
 
Expired
32,100

 
$
17.70

 
 
 
 
Outstanding — September 30, 2017
4,121,795

 
$
12.89

 
4.8
 
$
10

Exercisable — September 30, 2017
2,661,036

 
$
13.54

 
2.3
 
$
5

Vested and expected to vest – September 30, 2017
3,949,676

 
$
12.94

 
4.6
 
$
9

Certain assumptions were used in order to estimate fair value for options as noted in the following table:
 
2017
 
Expected term (in years)(1)
7.3 - 10.0

 
Risk-free interest rate(2)
2.25

%
Expected volatility(3)
33 - 40

%
Dividend yield(4)

 
Weighted average grant-date fair value (per option)
$
5.38

 
___________
(1)
Expected term calculated using historical exercise data.
(2)
Zero Coupon U.S. Treasury rate or equivalent based on expected term.
(3)
Volatility calculated using the implied volatility of our exchange traded stock options.
(4)
We have never paid cash dividends on our common stock and we do not anticipate any cash dividend payments on our common stock in the near future.
A summary of our restricted stock and restricted stock unit activity for the Calpine Equity Incentive Plans for the nine months ended September 30, 2017, is as follows:
 
Number of
Restricted
Stock Awards
 
Weighted
Average
Grant-Date
Fair Value
Nonvested — December 31, 2016
4,869,648

 
$
15.83

Granted
3,606,816

 
$
11.76

Forfeited
546,585

 
$
13.90

Vested
1,674,738

 
$
17.07

Nonvested — September 30, 2017
6,255,141

(1) 
$
13.31


___________
(1)
Includes 63,075 shares of restricted stock and restricted stock units outstanding under the Director Plans and 6,192,066 shares of restricted stock and restricted stock units outstanding under the Equity Plans
A summary of our performance share unit activity for the nine months ended September 30, 2017, is as follows:
 
Number of
Performance Share Units
 
Weighted
Average
Grant-Date
Fair Value
Nonvested — December 31, 2016
890,587

 
$
17.90

Granted
478,984

 
$
10.73

Forfeited
54,638

 
$
18.38

Vested(1)
30,312

 
$
17.21

Nonvested — September 30, 2017
1,284,621

 
$
15.22


___________
(1)
In accordance with the applicable performance share unit agreements, performance share units granted to employees who meet the retirement eligibility requirements stipulated in the Equity Plans are fully vested upon the later of the date on which the employee becomes eligible to retire or one-year anniversary of the grant date.
Segment Information (Tables)
Schedule of Financial Data for Segments
The tables below show our financial data for our segments for the periods indicated (in millions):
 
Three Months Ended September 30, 2017
 
West
 
Texas
 
East
 
Consolidation
and
Elimination
 
Total
Revenues from external customers
$
553

 
$
1,127

 
$
906

 
$

 
$
2,586

Intersegment revenues
2

 
4

 
2

 
(8
)
 

Total operating revenues
$
555

 
$
1,131

 
$
908

 
$
(8
)
 
$
2,586

Commodity Margin
$
327

 
$
201

 
$
336

 
$

 
$
864

Add: Mark-to-market commodity activity, net and other(1)
(40
)
 
88

 
(39
)
 
(8
)
 
1

Less:
 
 
 
 
 
 
 
 
 
Plant operating expense
83

 
77

 
75

 
(7
)
 
228

Depreciation and amortization expense
63

 
61

 
55

 

 
179

Sales, general and other administrative expense
10

 
16

 
10

 
1

 
37

Other operating expenses
13

 
6

 
6

 
(2
)
 
23

Impairment losses

 
12

 

 

 
12

(Income) from unconsolidated subsidiaries

 

 
(7
)
 

 
(7
)
Income from operations
118

 
117

 
158

 

 
393

Interest expense
 
 
 
 
 
 
 
 
156

Debt extinguishment costs and other (income) expense, net
 
 
 
 
 
 
 
 
8

Income before income taxes
 
 
 
 
 
 
 
 
$
229


 
Three Months Ended September 30, 2016
 
West
 
Texas
 
East
 
Consolidation
and
Elimination
 
Total
Revenues from external customers
$
524

 
$
1,067

 
$
764

 
$

 
$
2,355

Intersegment revenues
1

 
3

 
2

 
(6
)
 

Total operating revenues
$
525

 
$
1,070

 
$
766

 
$
(6
)
 
$
2,355

Commodity Margin
$
298

 
$
198

 
$
324

 
$

 
$
820

Add: Mark-to-market commodity activity, net and other(1)
11

 
110

 
(51
)
 
(7
)
 
63

Less:
 
 
 
 
 
 
 
 
 
Plant operating expense
79

 
65

 
78

 
(7
)
 
215

Depreciation and amortization expense
56

 
53

 
52

 

 
161

Sales, general and other administrative expense
9

 
13

 
12

 
(1
)
 
33

Other operating expenses
8

 
2

 
7

 
1

 
18

(Income) from unconsolidated subsidiaries

 

 
(6
)
 

 
(6
)
Income from operations
157

 
175

 
130

 

 
462

Interest expense
 
 
 
 
 
 
 
 
158

Other (income) expense, net
 
 
 
 
 
 
 
 
7

Income before income taxes
 
 
 
 
 
 
 
 
$
297

 
Nine Months Ended September 30, 2017
 
West
 
Texas
 
East
 
Consolidation
and
Elimination
 
Total
Revenues from external customers
$
1,666

 
$
2,723

 
$
2,562

 
$

 
$
6,951

Intersegment revenues
4

 
12

 
6

 
(22
)
 

Total operating revenues
$
1,670

 
$
2,735

 
$
2,568

 
$
(22
)
 
$
6,951

Commodity Margin
$
792

 
$
516

 
$
761

 
$

 
$
2,069

Add: Mark-to-market commodity activity, net and other(2)
(1
)
 
28

 
(65
)
 
(22
)
 
(60
)
Less:
 
 
 
 
 
 
 
 


Plant operating expense
291

 
282

 
260

 
(21
)
 
812

Depreciation and amortization expense
189

 
187

 
166

 

 
542

Sales, general and other administrative expense
31

 
54

 
31

 
1

 
117

Other operating expenses
30

 
12

 
23

 
(2
)
 
63

Impairment losses
28

 
13

 

 

 
41

(Gain) on sale of assets, net

 

 
(27
)
 

 
(27
)
(Income) from unconsolidated subsidiaries

 

 
(17
)
 

 
(17
)
Income (loss) from operations
222

 
(4
)
 
260

 

 
478

Interest expense
 
 
 
 
 
 
 
 
469

Debt extinguishment costs and other (income) expense, net
 
 
 
 
 
 
 
 
42

Loss before income taxes
 
 
 
 
 
 
 
 
$
(33
)

 
Nine Months Ended September 30, 2016
 
West
 
Texas
 
East
 
Consolidation
and
Elimination
 
Total
Revenues from external customers
$
1,159

 
$
2,129

 
$
1,846

 
$

 
$
5,134

Intersegment revenues
4

 
10

 
9

 
(23
)
 

Total operating revenues
$
1,163

 
$
2,139

 
$
1,855

 
$
(23
)
 
$
5,134

Commodity Margin
$
749

 
$
511

 
$
797

 
$

 
$
2,057

Add: Mark-to-market commodity activity, net and other(2)
(5
)
 
7

 
(44
)
 
(21
)
 
(63
)
Less:
 
 
 
 
 
 
 
 
 
Plant operating expense
268

 
236

 
258

 
(21
)
 
741

Depreciation and amortization expense
168

 
159

 
163

 

 
490

Sales, general and other administrative expense
27

 
43

 
36

 

 
106

Other operating expenses
23

 
6

 
27

 
(1
)
 
55

Impairment losses
13

 

 

 

 
13

(Income) from unconsolidated subsidiaries

 

 
(16
)
 

 
(16
)
Income from operations
245


74

 
285

 
1

 
605

Interest expense
 
 
 
 
 
 
 
 
472

Debt extinguishment costs and other (income) expense, net
 
 
 
 
 
 
 
 
33

Income before income taxes
 
 
 
 
 
 
 
 
$
100

_________
(1)
Includes $33 million and $40 million of lease levelization and $39 million and $25 million of amortization expense for the three months ended September 30, 2017 and 2016, respectively.
(2)
Includes $(13) million and $(2) million of lease levelization and $143 million and $79 million of amortization expense for the nine months ended September 30, 2017 and 2016, respectively.
Basis of Presentation and Summary of Significant Accounting Policies (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Dec. 31, 2016
Accounting Policies [Line Items]
 
 
 
 
 
Sale of Stock, Price Per Share
$ 15.25 
 
$ 15.25 
 
 
Sale of Stock, Consideration Received on Transaction
$ 5,600,000,000 
 
 
 
 
Payments for Merger Related Costs
11,000,000 
 
11,000,000 
 
 
Goodwill, Beginning Balance
 
 
187,000,000 
 
 
Goodwill, Purchase Accounting Adjustments
 
 
7,000,000 1
 
 
Goodwill, Ending Balance
243,000,000 
 
243,000,000 
 
 
Current
196,000,000 
 
196,000,000 
 
173,000,000 
Non-current
26,000,000 
 
26,000,000 
 
15,000,000 
Total
222,000,000 
 
222,000,000 
 
188,000,000 
Interest costs capitalized
7,000,000 
5,000,000 
20,000,000 
14,000,000 
 
Transfer of Financial Assets Accounted for as Sales, Fair Value of Derecognized Assets
228,000,000 
 
228,000,000 
 
211,000,000 
Continuing Involvement with Continued to be Recognized Transferred Financial Assets, Amount Outstanding
40,000,000 
 
40,000,000 
 
32,000,000 
Trade Receivables Sold
 
 
1,600,000,000 
 
 
Cash Flows Between Transferor and Transferee, Proceeds from New Transfers
 
 
1,600,000,000 
 
 
Margin deposits and other prepaid expense
182,000,000 
 
182,000,000 
 
364,000,000 
Derivative assets, current
206,000,000 2 3
 
206,000,000 2 3
 
221,000,000 2 3
Total current assets
2,388,000,000 
 
2,388,000,000 
 
2,851,000,000 
Derivative Asset, Noncurrent
284,000,000 2 3
 
284,000,000 2 3
 
300,000,000 2 3
Total assets
16,792,000,000 
 
16,792,000,000 
 
17,493,000,000 
Derivative Liability, Current
113,000,000 2 3
 
113,000,000 2 3
 
138,000,000 2 3
Other current liabilities
427,000,000 
 
427,000,000 
 
523,000,000 
Total current liabilities
1,794,000,000 
 
1,794,000,000 
 
2,205,000,000 
Long-term derivative liabilities
103,000,000 2 3
 
103,000,000 2 3
 
149,000,000 2 3
Total liabilities
13,469,000,000 
 
13,469,000,000 
 
14,154,000,000 
Derivative instruments, net
 
 
(10,000,000)
(154,000,000)
 
Other assets
 
 
60,000,000 
1,000,000 
 
Accounts payable and accrued expenses
 
 
95,000,000 
53,000,000 
 
Net cash provided by operating activities
 
 
807,000,000 
667,000,000 
 
Debt service
 
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
 
Current
22,000,000 
 
22,000,000 
 
11,000,000 
Non-current
7,000,000 
 
7,000,000 
 
8,000,000 
Total
29,000,000 
 
29,000,000 
 
19,000,000 
Construction major maintenance
 
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
 
Current
25,000,000 
 
25,000,000 
 
45,000,000 
Non-current
17,000,000 
 
17,000,000 
 
6,000,000 
Total
42,000,000 
 
42,000,000 
 
51,000,000 
Security project insurance
 
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
 
Current
145,000,000 
 
145,000,000 
 
114,000,000 
Non-current
 
 
Total
145,000,000 
 
145,000,000 
 
114,000,000 
Other
 
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
 
Current
4,000,000 
 
4,000,000 
 
3,000,000 
Non-current
2,000,000 
 
2,000,000 
 
1,000,000 
Total
6,000,000 
 
6,000,000 
 
4,000,000 
Geothermal Properties, Gross [Member] |
Minimum [Member]
 
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
 
Property, plant and equipment, estimated useful lives
 
 
13 years 
 
 
Geothermal Properties, Gross [Member] |
Maximum [Member]
 
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
 
Property, plant and equipment, estimated useful lives
 
 
58 years 
 
 
Property, Plant and Equipment, Other Types [Member] |
Minimum [Member]
 
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
 
Property, plant and equipment, estimated useful lives
 
 
3 years 
 
 
Property, Plant and Equipment, Other Types [Member] |
Maximum [Member]
 
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
 
Property, plant and equipment, estimated useful lives
 
 
46 years 
 
 
Building, Machinery and Equipment, Gross [Member] |
Minimum [Member]
 
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
 
Property, plant and equipment, estimated useful lives
 
 
3 years 
 
 
Building, Machinery and Equipment, Gross [Member] |
Maximum [Member]
 
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
 
Property, plant and equipment, estimated useful lives
 
 
46 years 
 
 
Texas [Member]
 
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
 
Goodwill, Beginning Balance
 
 
 
 
31,000,000 
Goodwill, Ending Balance
32,000,000 
 
32,000,000 
 
31,000,000 
East [Member]
 
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
 
Goodwill, Beginning Balance
 
 
88,000,000 
 
 
Goodwill, Purchase Accounting Adjustments
 
 
8,000,000 1
 
 
Goodwill, Ending Balance
145,000,000 
 
145,000,000 
 
 
West [Member]
 
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
 
Goodwill, Beginning Balance
 
 
 
 
68,000,000 
Goodwill, Ending Balance
66,000,000 
 
66,000,000 
 
68,000,000 
Calpine Solutions [Member] |
Texas [Member]
 
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
 
Goodwill, Purchase Accounting Adjustments
 
 
1,000,000 1
 
 
Calpine Solutions [Member] |
East [Member]
 
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
 
Goodwill, Purchase Accounting Adjustments
 
 
(9,000,000)
 
 
Calpine Solutions [Member] |
West [Member]
 
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
 
Goodwill, Purchase Accounting Adjustments
 
 
(2,000,000)1
 
 
North American Power [Member]
 
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
 
Goodwill, Acquired During Period
 
 
49,000,000 
 
 
North American Power [Member] |
Texas [Member]
 
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
 
Goodwill, Acquired During Period
 
 
 
 
North American Power [Member] |
East [Member]
 
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
 
Goodwill, Acquired During Period
 
 
49,000,000 
 
 
Goodwill, Purchase Accounting Adjustments
 
 
17,000,000 
 
 
North American Power [Member] |
West [Member]
 
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
 
Goodwill, Acquired During Period
 
 
 
 
Scenario, Previously Reported [Member]
 
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
 
Margin deposits and other prepaid expense
 
 
 
 
441,000,000 
Derivative assets, current
 
 
 
 
1,725,000,000 
Total current assets
 
 
 
 
4,432,000,000 
Derivative Asset, Noncurrent
 
 
 
 
543,000,000 
Total assets
 
 
 
 
19,317,000,000 
Derivative Liability, Current
 
 
 
 
1,630,000,000 
Other current liabilities
 
 
 
 
528,000,000 
Total current liabilities
 
 
 
 
3,702,000,000 
Long-term derivative liabilities
 
 
 
 
476,000,000 
Total liabilities
 
 
 
 
15,978,000,000 
Derivative instruments, net
 
 
 
(71,000,000)
 
Other assets
 
 
 
(75,000,000)
 
Accounts payable and accrued expenses
 
 
 
46,000,000 
 
Net cash provided by operating activities
 
 
 
667,000,000 
 
Restatement Adjustment [Member]
 
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
 
Margin deposits and other prepaid expense
 
 
 
 
(77,000,000)
Derivative assets, current
 
 
 
 
(1,504,000,000)
Total current assets
 
 
 
 
(1,581,000,000)
Derivative Asset, Noncurrent
 
 
 
 
(243,000,000)
Total assets
 
 
 
 
(1,824,000,000)
Derivative Liability, Current
 
 
 
 
(1,492,000,000)
Other current liabilities
 
 
 
 
(5,000,000)
Total current liabilities
 
 
 
 
(1,497,000,000)
Long-term derivative liabilities
 
 
 
 
(327,000,000)
Total liabilities
 
 
 
 
(1,824,000,000)
Derivative instruments, net
 
 
 
(83,000,000)
 
Other assets
 
 
 
76,000,000 
 
Accounts payable and accrued expenses
 
 
 
7,000,000 
 
Net cash provided by operating activities
 
 
 
 
Revolving Credit Facility [Member]
 
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
 
Line of Credit Facility, Maximum Borrowing Capacity
1,790,000,000 
 
1,790,000,000 
 
 
Amendment No. 6 [Member] |
Revolving Credit Facility [Member]
 
 
 
 
 
Accounting Policies [Line Items]
 
 
 
 
 
Line of Credit Facility, Maximum Borrowing Capacity
$ 1,470,000,000 
 
$ 1,470,000,000 
 
 
Basis of Presentation and Summary of Significant Accounting Policies Property, Plant and Equipment, Net (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Dec. 31, 2016
Sep. 30, 2017
Minimum [Member]
Building, Machinery and Equipment, Gross [Member]
Sep. 30, 2017
Minimum [Member]
Geothermal Properties, Gross [Member]
Sep. 30, 2017
Minimum [Member]
Property, Plant and Equipment, Other Types [Member]
Sep. 30, 2017
Maximum [Member]
Building, Machinery and Equipment, Gross [Member]
Sep. 30, 2017
Maximum [Member]
Geothermal Properties, Gross [Member]
Sep. 30, 2017
Maximum [Member]
Property, Plant and Equipment, Other Types [Member]
Property, Plant and Equipment [Line Items]
 
 
 
 
 
 
 
 
Buildings, machinery and equipment
$ 16,512 
$ 16,468 
 
 
 
 
 
 
Property, plant and equipment, estimated useful lives
 
 
3 years 
13 years 
3 years 
46 years 
58 years 
46 years 
Geothermal properties
1,480 
1,377 
 
 
 
 
 
 
Other
235 
259 
 
 
 
 
 
 
Property, plant and equipment, gross
18,227 
18,104 
 
 
 
 
 
 
Less: Accumulated depreciation
6,265 
5,865 
 
 
 
 
 
 
Property, plant and equipment, gross, less accumulated depreciation, depletion and amortization
11,962 
12,239 
 
 
 
 
 
 
Land
117 
116 
 
 
 
 
 
 
Construction in progress
754 
658 
 
 
 
 
 
 
Property, plant and equipment, net
$ 12,833 
$ 13,013 
 
 
 
 
 
 
Acquisition (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Jan. 17, 2017
North American Power [Member]
Feb. 5, 2016
Granite Ridge Energy Center [Member]
MW
Mar. 31, 2017
Osprey Energy Center [Member]
Sep. 30, 2017
Osprey Energy Center [Member]
Business Acquisition [Line Items]
 
 
 
 
Ownership percentage of acquiree
100.00% 
 
 
 
Business combination, recognized identifiable assets acquired and liabilities assumed, net
$ 105 
$ 500 
 
 
Power generation capacity
 
745 
 
 
Summer Peaking Capacity
 
695 
 
 
Proceeds from Sale of Productive Assets
 
 
166 
 
Gain (Loss) on Sale of Assets and Asset Impairment Charges
 
 
 
$ 27 
Variable Interest Entities and Unconsolidated Investments in Power Plants (Unconsolidated VIEs) (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Schedule of Equity Method Investments [Line Items]
 
 
Equity method investments
$ 106 
$ 99 
Greenfield [Member]
 
 
Schedule of Equity Method Investments [Line Items]
 
 
Equity method investments
92 
73 
Equity method investment, ownership percentage
50.00% 
 
Whitby [Member]
 
 
Schedule of Equity Method Investments [Line Items]
 
 
Equity method investments
16 
Equity method investment, ownership percentage
50.00% 
 
Calpine Receivables [Member]
 
 
Schedule of Equity Method Investments [Line Items]
 
 
Equity method investments
$ 10 
$ 10 
Equity method investment, ownership percentage
100.00% 
 
Variable Interest Entities and Unconsolidated Investments in Power Plants (Income from Unconsolidated Investments 10-Q) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
(Income) from unconsolidated subsidiaries
$ (7)
$ (6)
$ (17)
$ (16)
Greenfield [Member]
 
 
 
 
(Income) from unconsolidated subsidiaries
(5)
(3)
(11)
(8)
Whitby [Member]
 
 
 
 
(Income) from unconsolidated subsidiaries
$ (2)
$ (3)
$ (6)
$ (8)
Variable Interest Entities and Unconsolidated Investments in Power Plants (VIE Texuals) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Dec. 31, 2016
Variable Interest Entity [Line Items]
 
 
 
 
 
Variable interest entity, financial or other support, amount
$ 0 
$ 1 
$ 0 
$ 1 
 
Equity method investment, summarized financial information, debt
263 
 
263 
 
259 
Prorata share of equity method investment, summarized financial information, debt
132 
 
132 
 
130 
Greenfield [Member]
 
 
 
 
 
Variable Interest Entity [Line Items]
 
 
 
 
 
Power generation capacity
1,038 
 
1,038 
 
 
Equity method investment, ownership percentage
50.00% 
 
50.00% 
 
 
Distribution from equity method investee
 
Whitby [Member]
 
 
 
 
 
Variable Interest Entity [Line Items]
 
 
 
 
 
Power generation capacity
50 
 
50 
 
 
Equity method investment, ownership percentage
50.00% 
 
50.00% 
 
 
Distribution from equity method investee
$ 2 
$ 0 
$ 18 
$ 13 
 
Variable Interest Entity, Primary Beneficiary [Member]
 
 
 
 
 
Variable Interest Entity [Line Items]
 
 
 
 
 
Power generation capacity
8,423 
 
8,423 
 
9,491 
Debt (Debt) (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Debt Instrument [Line Items]
 
 
Debt and Capital Lease Obligations
$ 11,650 
$ 12,179 
Debt, Current
369 
748 
Long-term Debt, Excluding Current Maturities
11,281 
11,431 
Unsecured Debt [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt and Capital Lease Obligations
3,415 
3,412 
Loans Payable [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt and Capital Lease Obligations
3,152 
3,165 
Corporate Debt Securities [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt and Capital Lease Obligations
1,843 
2,290 
Notes Payable, Other Payables [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt and Capital Lease Obligations
1,575 
1,597 
Secured Debt [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt and Capital Lease Obligations
1,544 
1,553 
Capital Lease Obligations [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt and Capital Lease Obligations
$ 121 
$ 162 
Debt Senior Unsecured Notes (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Debt Instrument [Line Items]
 
 
Long-term Debt
$ 11,484 
$ 12,046 
Senior Unsecured Notes 2023 [Member]
 
 
Debt Instrument [Line Items]
 
 
Long-term Debt
1,238 
1,237 
Senior Unsecured Notes 2024 [Member]
 
 
Debt Instrument [Line Items]
 
 
Long-term Debt
643 
643 
Senior Unsecured Notes 2025 [Member]
 
 
Debt Instrument [Line Items]
 
 
Long-term Debt
1,534 
1,532 
Unsecured Debt [Member]
 
 
Debt Instrument [Line Items]
 
 
Long-term Debt
$ 3,415 
$ 3,412 
Debt (First Lien Term Loans) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Dec. 31, 2016
Sep. 30, 2017
2017 First Lien Term Loan [Member]
Sep. 30, 2017
2017 First Lien Term Loan [Member]
Dec. 31, 2016
2017 First Lien Term Loan [Member]
Mar. 31, 2017
New 2019 First Lien Term Loan [Member]
Sep. 30, 2017
New 2019 First Lien Term Loan [Member]
Dec. 31, 2016
New 2019 First Lien Term Loan [Member]
Sep. 30, 2017
2023 First Lien Term Loan [Member]
Dec. 31, 2016
2023 First Lien Term Loan [Member]
Sep. 30, 2017
2024 First Lien Term Loan [Member]
Dec. 31, 2016
2024 First Lien Term Loan [Member]
Sep. 30, 2017
First Lien Term Loans [Member]
Dec. 31, 2016
First Lien Term Loans [Member]
Mar. 31, 2017
First Lien Notes 2023 [Member]
Sep. 30, 2017
First Lien Notes 2023 [Member]
Dec. 31, 2016
First Lien Notes 2023 [Member]
Mar. 31, 2017
Federal Funds Effective Rate [Member]
New 2019 First Lien Term Loan [Member]
Mar. 31, 2017
Eurodollar Rate For A One-Month Interest Period [Member]
New 2019 First Lien Term Loan [Member]
Mar. 31, 2017
Prime Rate or The Eurodollar Rate For A One-Month Interest Period [Member]
New 2019 First Lien Term Loan [Member]
Mar. 31, 2017
London Interbank Offered Rate (LIBOR) [Member]
New 2019 First Lien Term Loan [Member]
Mar. 31, 2017
Minimum [Member]
London Interbank Offered Rate (LIBOR) [Member]
New 2019 First Lien Term Loan [Member]
Sep. 30, 2017
Early Redemption Amount [Member]
2017 First Lien Term Loan [Member]
Mar. 31, 2017
Early Redemption Amount [Member]
First Lien Notes 2023 [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term Debt, Gross
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 400 
$ 453 
Debt Instrument, Face Amount
 
 
 
 
 
 
 
 
400 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term Debt
11,484 
 
11,484 
 
12,046 
149 1
149 1
537 1
 
389 
1,067 
1,071 
1,547 
1,557 
3,152 
3,165 
 
2
450 2
 
 
 
 
 
 
 
Debt Instrument, Basis Spread on Variable Rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.50% 
1.00% 
0.75% 
1.75% 
 
 
 
Debt Instrument, Interest Rate, Stated Percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.00% 
 
 
Debt Issuance Costs, Net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of principal amount of Term Loan to be paid quarterly
 
 
 
 
 
 
 
 
0.25% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument Unamortized Discount Percent
 
 
 
 
 
 
 
 
1.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gain (Loss) on Extinguishment of Debt
$ 1 
$ 0 
$ 26 
$ 15 
 
$ 1 
$ 4 
 
 
 
 
 
 
 
 
 
 
$ 21 
 
 
 
 
 
 
 
 
 
Debt (First Lien Notes) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended 3 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Dec. 31, 2016
Sep. 30, 2017
2022 First Lien Notes [Member]
Dec. 31, 2016
2022 First Lien Notes [Member]
Mar. 31, 2017
First Lien Notes 2023 [Member]
Sep. 30, 2017
First Lien Notes 2023 [Member]
Dec. 31, 2016
First Lien Notes 2023 [Member]
Sep. 30, 2017
New 2019 First Lien Term Loan [Member]
Dec. 31, 2016
New 2019 First Lien Term Loan [Member]
Sep. 30, 2017
2024 First Lien Notes [Member]
Dec. 31, 2016
2024 First Lien Notes [Member]
Sep. 30, 2017
2026 First Lien Notes [Member]
Dec. 31, 2016
2026 First Lien Notes [Member]
Sep. 30, 2017
Corporate Debt Securities [Member]
Dec. 31, 2016
Corporate Debt Securities [Member]
Mar. 31, 2017
Early Redemption Amount [Member]
First Lien Notes 2023 [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term Debt, Gross
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 453 
Long-term Debt
11,484 
 
11,484 
 
12,046 
741 
739 
 
1
450 1
389 
485 
485 
617 
616 
1,843 
2,290 
 
Gain (Loss) on Extinguishment of Debt
$ 1 
$ 0 
$ 26 
$ 15 
 
 
 
$ 21 
 
 
 
 
 
 
 
 
 
 
 
Debt (Letter of Credit) (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Line of Credit Facility [Line Items]
 
 
Letters of Credit Outstanding, Amount
$ 950 
$ 991 
Revolving Credit Facility [Member]
 
 
Line of Credit Facility [Line Items]
 
 
Letters of Credit Outstanding, Amount
474 1
535 1
CDH [Member]
 
 
Line of Credit Facility [Line Items]
 
 
Letters of Credit Outstanding, Amount
246 
250 
Various Project Financing Facilities [Member]
 
 
Line of Credit Facility [Line Items]
 
 
Letters of Credit Outstanding, Amount
$ 230 
$ 206 
Debt (Fair Value of Debt) (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Long-term Debt
$ 11,484 
$ 12,046 
Unsecured Debt [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Long-term Debt
3,415 
3,412 
Loans Payable [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Long-term Debt
3,152 
3,165 
Corporate Debt Securities [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Long-term Debt
1,843 
2,290 
Reported Value Measurement [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Long-term Debt
11,438 
11,926 
Reported Value Measurement [Member] |
Unsecured Debt [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Long-term Debt
3,415 
3,412 
Reported Value Measurement [Member] |
Loans Payable [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Long-term Debt
3,152 
3,165 
Reported Value Measurement [Member] |
Corporate Debt Securities [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Long-term Debt
1,843 
2,290 
Reported Value Measurement [Member] |
Notes Payable, Other Payable excluding Capital Leases [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Long-term Debt
1,484 1
1,506 1
Reported Value Measurement [Member] |
Secured Debt [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Long-term Debt
1,544 
1,553 
Fair Value, Inputs, Level 2 [Member] |
Unsecured Debt [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Long-term Debt
3,307 
3,343 
Fair Value, Inputs, Level 2 [Member] |
Loans Payable [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Long-term Debt
3,202 
3,244 
Fair Value, Inputs, Level 2 [Member] |
Corporate Debt Securities [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Long-term Debt
1,905 
2,349 
Fair Value, Inputs, Level 2 [Member] |
Secured Debt [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Long-term Debt
1,554 
1,567 
Fair Value, Inputs, Level 3 [Member] |
Notes Payable, Other Payable excluding Capital Leases [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Long-term Debt
$ 1,516 1
$ 1,543 1
Debt (Debt Textuals) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Line of Credit Facility [Line Items]
 
 
 
 
Gain (Loss) on Extinguishment of Debt
$ (1)
$ 0 
$ (26)
$ (15)
Debt Instruments [Abstract]
 
 
 
 
Debt Instrument, Interest Rate, Effective Percentage
5.40% 
5.50% 
5.40% 
5.50% 
2017 First Lien Term Loan [Member]
 
 
 
 
Line of Credit Facility [Line Items]
 
 
 
 
Gain (Loss) on Extinguishment of Debt
$ (1)
 
$ (4)
 
Assets and Liabilities with Recurring Fair Value Measurements Fair Value Hierarchy (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash equivalents
$ 173 1
$ 153 1
Derivative Asset
490 2
521 2
Effect of Netting and Allocation of Collateral
(829)3 4
(1,747)3 4
Total assets
663 
674 
Derivative Liability
216 2
287 2
Effect of Netting and Allocation of Collateral, Liability
(911)3 4
(1,819)3 4
Total Liabilities
216 
287 
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash equivalents
173 1
153 1
Effect of Netting and Allocation of Collateral
(605)3 4
(1,542)3 4
Total assets
173 
153 
Effect of Netting and Allocation of Collateral, Liability
(656)3 4
(1,570)3 4
Total Liabilities
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash equivalents
1
1
Effect of Netting and Allocation of Collateral
(203)3 4
(188)3 4
Total assets
179 
72 
Effect of Netting and Allocation of Collateral, Liability
(220)3 4
(215)3 4
Total Liabilities
187 
254 
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash equivalents
1
1
Effect of Netting and Allocation of Collateral
(21)3 4
(17)3 4
Total assets
311 
449 
Effect of Netting and Allocation of Collateral, Liability
(35)3 4
(34)3 4
Total Liabilities
29 
33 
Future [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Asset
605 
1,542 
Derivative Liability
656 
1,570 
Future [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Asset
605 
1,542 
Derivative Liability
656 
1,570 
Future [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Asset
Derivative Liability
Future [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Asset
Derivative Liability
Forward Contracts [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Asset
694 5
697 5
Derivative Liability
419 5
478 5
Forward Contracts [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Asset
5
5
Derivative Liability
5
5
Forward Contracts [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Asset
362 5
231 5
Derivative Liability
355 5
411 5
Forward Contracts [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Asset
332 5
466 5
Derivative Liability
64 5
67 5
Interest Rate Hedging Instruments
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Asset
20 
29 
Derivative Liability
52 
58 
Interest Rate Hedging Instruments |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Asset
Derivative Liability
Interest Rate Hedging Instruments |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Asset
20 
29 
Derivative Liability
52 
58 
Interest Rate Hedging Instruments |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Asset
Derivative Liability
$ 0 
$ 0 
Assets and Liabilities with Recurring Fair Value Measurements Quantitative Info on Level 3 (Details) (USD $)
Sep. 30, 2017
Dec. 31, 2016
Fair Value Inputs, Assets, Quantitative Information [Line Items]
 
 
Derivative, Fair Value, Net
$ 274,000,000 1
$ 234,000,000 1
Power Contracts [Member]
 
 
Fair Value Inputs, Assets, Quantitative Information [Line Items]
 
 
Derivative, Fair Value, Net
234,000,000 
376,000,000 
Power Contracts [Member] |
Minimum [Member]
 
 
Fair Value Inputs, Assets, Quantitative Information [Line Items]
 
 
Fair Value Inputs Quantitative Information
6.55 
9.60 
Power Contracts [Member] |
Maximum [Member]
 
 
Fair Value Inputs, Assets, Quantitative Information [Line Items]
 
 
Fair Value Inputs Quantitative Information
89.83 
86.34 
Natural Gas [Member]
 
 
Fair Value Inputs, Assets, Quantitative Information [Line Items]
 
 
Derivative, Fair Value, Net
38,000,000 
18,000,000 
Natural Gas [Member] |
Minimum [Member]
 
 
Fair Value Inputs, Assets, Quantitative Information [Line Items]
 
 
Fair Value Inputs Quantitative Information
0.97 
1.95 
Natural Gas [Member] |
Maximum [Member]
 
 
Fair Value Inputs, Assets, Quantitative Information [Line Items]
 
 
Fair Value Inputs Quantitative Information
9.35 
5.66 
Power Congestion Products [Member]
 
 
Fair Value Inputs, Assets, Quantitative Information [Line Items]
 
 
Derivative, Fair Value, Net
10,000,000 
12,000,000 
Power Congestion Products [Member] |
Minimum [Member]
 
 
Fair Value Inputs, Assets, Quantitative Information [Line Items]
 
 
Fair Value Inputs Quantitative Information
(13.13)
(7.52)
Power Congestion Products [Member] |
Maximum [Member]
 
 
Fair Value Inputs, Assets, Quantitative Information [Line Items]
 
 
Fair Value Inputs Quantitative Information
$ 6.85 
$ 13.62 
Assets and Liabilities with Recurring Fair Value Measurements (Textuals) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Dec. 31, 2016
Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
 
 
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs
$ 303 
$ (61)
$ 416 
$ (46)
 
 
Included in net income:
 
 
 
 
 
 
Included in operating revenues
26 1
30 1
125 1
1
 
 
Fair Value, Assets Measured with Unobservable Inputs on Recurring Basis, Gain (Loss) Included In Fuel And Purchased Energy Expense
(12)2
(31)2
(1)2
(24)2
 
 
Amount of Change in Collateral of Financial Instruments Classified as Derivative Asset (Liability)
(2)
(4)
 
 
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Purchases
 
 
Purchases, issuances and settlements:
 
 
 
 
 
 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Settlements
(40)
15 
(129)
(4)
 
 
Fair Value, Liabilities, Level 1 to Level 2 Transfers, Amount
 
 
Fair Value, Liabilities, Level 2 to Level 1 Transfers, Amount
 
 
Transfers into level 3
3 4
3 4
(5)3 4
3 4
 
 
Transfers out of Level 3
(3)4 5
75 4 5
(122)4 5
89 4 5
 
 
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs
282 
28 
282 
28 
 
 
Fair Value, Assets Measured on Recurring Basis, Change in Unrealized Gain (Loss)
14 
(1)
124 
(15)
 
 
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]
 
 
 
 
 
 
Cash and Cash Equivalents, at Carrying Value
426 
561 
426 
561 
418 
906 
Restricted Cash and Cash Equivalents
222 
 
222 
 
188 
 
Fair Value Measurement [Domain]
 
 
 
 
 
 
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]
 
 
 
 
 
 
Cash and Cash Equivalents, at Carrying Value
32 
 
32 
 
26 
 
Restricted Cash and Cash Equivalents
141 
 
141 
 
127 
 
Fair Value, Inputs, Level 1 [Member]
 
 
 
 
 
 
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]
 
 
 
 
 
 
Derivative, Collateral, Right to Reclaim Cash, Net
51 
 
51 
 
28 
 
Fair Value, Inputs, Level 2 [Member]
 
 
 
 
 
 
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]
 
 
 
 
 
 
Derivative, Collateral, Right to Reclaim Cash, Net
17 
 
17 
 
27 
 
Fair Value, Inputs, Level 3 [Member]
 
 
 
 
 
 
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]
 
 
 
 
 
 
Derivative, Collateral, Right to Reclaim Cash, Net
$ 14 
 
$ 14 
 
$ 17 
 
Derivative Instruments (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended 9 Months Ended 12 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2017
Natural Gas [Member]
MMBTU
Dec. 31, 2014
Natural Gas [Member]
MMBTU
Sep. 30, 2017
Environmental Credits [Member]
t
Dec. 31, 2014
Environmental Credits [Member]
t
Sep. 30, 2017
Interest Rate Hedging Instruments
Dec. 31, 2016
Interest Rate Hedging Instruments
Sep. 30, 2017
Short [Member]
Power [Member]
MWh
Dec. 31, 2014
Short [Member]
Power [Member]
MWh
Derivative [Line Items]
 
 
 
 
 
 
 
 
Derivative, Nonmonetary Notional Amount, Energy Measure
(398)
(613)
 
 
 
 
(98)
(86)
Derivative, Nonmonetary Notional Amount, Mass
 
 
19 
16 
 
 
 
 
Derivative, Notional Amount
 
 
 
 
$ 4,600 1
$ 3,721 
 
 
Derivative Instruments (Details 2) (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Derivatives, Fair Value [Line Items]
 
 
Derivative Asset
$ 490 1
$ 521 1
Derivative Liability
216 1
287 1
Designated as Hedging Instrument [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Asset
11 
29 
Derivative Liability
43 
58 
Not Designated as Hedging Instrument [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Asset
479 
492 
Derivative Liability
173 
229 
Interest Rate Hedging Instruments
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Asset
20 
29 
Derivative Liability
52 
58 
Interest Rate Hedging Instruments |
Designated as Hedging Instrument [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Asset
11 
29 
Derivative Liability
43 
58 
Energy Related Derivative [Member] |
Not Designated as Hedging Instrument [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Asset
479 
492 
Derivative Liability
$ 173 
$ 229 
Derivative Instruments (Detail 3) (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Derivative Instruments Subject to Master Netting Arrangement [Line Items]
 
 
Derivative assets, current
$ 206 1 2
$ 221 1 2
Derivative Asset, Noncurrent
284 1 2
300 1 2
Long-term derivative liabilities
(103)1 2
(149)1 2
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement
192 
162 
Derivative Liability, Collateral, Right to Reclaim Cash, Offset
82 
72 
Derivative Liability, Current
(113)1 2
(138)1 2
Derivative Liability
(216)2
(287)2
Derivative, Collateral, Right to Reclaim Cash
115 
262 
Derivative, Fair Value, Net
274 2
234 2
Derivative Asset
490 2
521 2
Derivative Financial Instruments, Assets [Member]
 
 
Derivative Instruments Subject to Master Netting Arrangement [Line Items]
 
 
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement
1,319 
2,268 
Derivative Asset, Collateral, Obligation to Return Cash, Offset
(829)
(1,747)
Future [Member]
 
 
Derivative Instruments Subject to Master Netting Arrangement [Line Items]
 
 
Derivative assets, current
2
2
Derivative Asset, Noncurrent
2
2
Long-term derivative liabilities
2
2
Derivative Liability, Current
2
2
Derivative Liability
(656)
(1,570)
Derivative Asset
605 
1,542 
Forward Contracts [Member]
 
 
Derivative Instruments Subject to Master Netting Arrangement [Line Items]
 
 
Derivative assets, current
205 2
220 2
Derivative Asset, Noncurrent
274 2
272 2
Long-term derivative liabilities
(85)2
(119)2
Derivative Liability, Current
(88)2
(110)2
Derivative Liability
(419)3
(478)3
Derivative Asset
694 3
697 3
Interest Rate Hedging Instruments
 
 
Derivative Instruments Subject to Master Netting Arrangement [Line Items]
 
 
Derivative assets, current
2
2
Derivative Asset, Noncurrent
10 2
28 2
Long-term derivative liabilities
(18)2
(30)2
Derivative Liability, Current
(25)2
(28)2
Derivative Liability
(52)
(58)
Derivative Asset
20 
29 
Fair Value, Inputs, Level 3 [Member]
 
 
Derivative Instruments Subject to Master Netting Arrangement [Line Items]
 
 
Margin/Cash (Received) Posted Subject to Master Netting Arrangement
14 
17 
Fair Value, Inputs, Level 3 [Member] |
Future [Member]
 
 
Derivative Instruments Subject to Master Netting Arrangement [Line Items]
 
 
Derivative Liability
Derivative Asset
Fair Value, Inputs, Level 3 [Member] |
Forward Contracts [Member]
 
 
Derivative Instruments Subject to Master Netting Arrangement [Line Items]
 
 
Derivative Liability
(64)3
(67)3
Derivative Asset
332 3
466 3
Fair Value, Inputs, Level 3 [Member] |
Interest Rate Hedging Instruments
 
 
Derivative Instruments Subject to Master Netting Arrangement [Line Items]
 
 
Derivative Liability
Derivative Asset
Derivative Assets, Current [Member]
 
 
Derivative Instruments Subject to Master Netting Arrangement [Line Items]
 
 
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement
812 4
1,725 1
Derivative Asset, Collateral, Obligation to Return Cash, Offset
(606)4
(1,504)1
Derivative Assets, Current [Member] |
Future [Member]
 
 
Derivative Instruments Subject to Master Netting Arrangement [Line Items]
 
 
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement
472 
1,344 
Derivative Asset, Collateral, Obligation to Return Cash, Offset
(472)
(1,344)
Derivative Assets, Current [Member] |
Forward Contracts [Member]
 
 
Derivative Instruments Subject to Master Netting Arrangement [Line Items]
 
 
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement
338 
380 
Derivative Asset, Collateral, Obligation to Return Cash, Offset
(133)
(160)
Derivative Assets, Current [Member] |
Interest Rate Hedging Instruments
 
 
Derivative Instruments Subject to Master Netting Arrangement [Line Items]
 
 
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement
Derivative Asset, Collateral, Obligation to Return Cash, Offset
(1)
Derivative Assets, Non-current [Member]
 
 
Derivative Instruments Subject to Master Netting Arrangement [Line Items]
 
 
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement
507 4
543 1
Derivative Asset, Collateral, Obligation to Return Cash, Offset
(223)4
(243)1
Derivative Assets, Non-current [Member] |
Future [Member]
 
 
Derivative Instruments Subject to Master Netting Arrangement [Line Items]
 
 
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement
133 
198 
Derivative Asset, Collateral, Obligation to Return Cash, Offset
(133)
(198)
Derivative Assets, Non-current [Member] |
Forward Contracts [Member]
 
 
Derivative Instruments Subject to Master Netting Arrangement [Line Items]
 
 
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement
356 
317 
Derivative Asset, Collateral, Obligation to Return Cash, Offset
(82)
(45)
Derivative Assets, Non-current [Member] |
Interest Rate Hedging Instruments
 
 
Derivative Instruments Subject to Master Netting Arrangement [Line Items]
 
 
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement
18 
28 
Derivative Asset, Collateral, Obligation to Return Cash, Offset
(8)
Derivative Liabilities, Current [Member]
 
 
Derivative Instruments Subject to Master Netting Arrangement [Line Items]
 
 
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement
758 4
1,630 1
Derivative Liability, Collateral, Right to Reclaim Cash, Offset
645 4
1,492 1
Derivative Liabilities, Current [Member] |
Future [Member]
 
 
Derivative Instruments Subject to Master Netting Arrangement [Line Items]
 
 
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement
496 
1,327 
Derivative Liability, Collateral, Right to Reclaim Cash, Offset
496 
1,327 
Derivative Liabilities, Current [Member] |
Forward Contracts [Member]
 
 
Derivative Instruments Subject to Master Netting Arrangement [Line Items]
 
 
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement
236 
275 
Derivative Liability, Collateral, Right to Reclaim Cash, Offset
148 
165 
Derivative Liabilities, Current [Member] |
Interest Rate Hedging Instruments
 
 
Derivative Instruments Subject to Master Netting Arrangement [Line Items]
 
 
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement
26 
28 
Derivative Liability, Collateral, Right to Reclaim Cash, Offset
Derivative Liabilities, Non-current [Member]
 
 
Derivative Instruments Subject to Master Netting Arrangement [Line Items]
 
 
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement
369 4
476 1
Derivative Liability, Collateral, Right to Reclaim Cash, Offset
266 4
327 1
Derivative Liabilities, Non-current [Member] |
Future [Member]
 
 
Derivative Instruments Subject to Master Netting Arrangement [Line Items]
 
 
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement
160 
243 
Derivative Liability, Collateral, Right to Reclaim Cash, Offset
160 
243 
Derivative Liabilities, Non-current [Member] |
Forward Contracts [Member]
 
 
Derivative Instruments Subject to Master Netting Arrangement [Line Items]
 
 
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement
183 
203 
Derivative Liability, Collateral, Right to Reclaim Cash, Offset
98 
84 
Derivative Liabilities, Non-current [Member] |
Interest Rate Hedging Instruments
 
 
Derivative Instruments Subject to Master Netting Arrangement [Line Items]
 
 
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement
26 
30 
Derivative Liability, Collateral, Right to Reclaim Cash, Offset
Derivative Financial Instruments, Liabilities [Member]
 
 
Derivative Instruments Subject to Master Netting Arrangement [Line Items]
 
 
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement
1,127 
2,106 
Derivative Liability, Collateral, Right to Reclaim Cash, Offset
$ 911 
$ 1,819 
Derivative Instruments (Details 4) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Summary of Derivative Instruments by Risk Exposure [Abstract]
 
 
 
 
Gain (Loss) on Derivative Instruments, Net, Pretax
$ 13 1
$ 141 1
$ 60 1
$ 192 1
Gain (Loss) on Sale of Derivatives
(53)2 3
32 2 3
20 2 3
213 2 3
Mark-to-market gain (loss)
66 4
109 4
40 4
(21)4
Sales [Member]
 
 
 
 
Summary of Derivative Instruments by Risk Exposure [Abstract]
 
 
 
 
Gain (Loss) on Derivative Instruments, Net, Pretax
60 1 2 3
308 1 2 3
252 1 2 3
240 1 2 3
Cost of Sales [Member]
 
 
 
 
Summary of Derivative Instruments by Risk Exposure [Abstract]
 
 
 
 
Gain (Loss) on Derivative Instruments, Net, Pretax
(47)1 2 3
(167)1 2 3
(193)1 2 3
(49)1 2 3
Interest Expense [Member]
 
 
 
 
Summary of Derivative Instruments by Risk Exposure [Abstract]
 
 
 
 
Gain (Loss) on Derivative Instruments, Net, Pretax
1 5
1 5
1 5
1 5
Interest Rate Hedging Instruments
 
 
 
 
Summary of Derivative Instruments by Risk Exposure [Abstract]
 
 
 
 
Mark-to-market gain (loss)
4
4
4
4
Energy Related Derivative [Member]
 
 
 
 
Summary of Derivative Instruments by Risk Exposure [Abstract]
 
 
 
 
Gain (Loss) on Sale of Derivatives
(53)2 3
32 2 3
20 2 3
213 2 3
Mark-to-market gain (loss)
$ 66 4
$ 109 4
$ 39 4
$ (22)4
Derivative Instruments (Details 5) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net
$ 8 
$ 18 
$ (7)
$ 0 
Depreciation expense [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net
1 2
1 2
1 2
1 2
Interest Rate Hedging Instruments
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net
1 2
18 1 2
(12)1 2
1 2
Reclassification out of Accumulated Other Comprehensive Income [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net
(11)3
(11)3
(37)3
(33)3
Reclassification out of Accumulated Other Comprehensive Income [Member] |
Depreciation expense [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net
(1)1 2 3
1 2 3
(5)1 2 3
1 2 3
Reclassification out of Accumulated Other Comprehensive Income [Member] |
Interest Rate Hedging Instruments
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net
$ (10)1 2 3
$ (11)1 2 3
$ (32)1 2 3
$ (33)1 2 3
Derivative Instruments (Textuals) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Dec. 31, 2016
Sep. 30, 2017
Parent [Member]
Dec. 31, 2016
Parent [Member]
Sep. 30, 2017
Noncontrolling Interest [Member]
Dec. 31, 2016
Noncontrolling Interest [Member]
Mar. 31, 2017
2021 through 2022 [Member]
Interest Rate Hedging Instruments
Mar. 31, 2017
2020 [Member]
Interest Rate Hedging Instruments
Mar. 31, 2017
2018 through 2020 [Member]
Interest Rate Hedging Instruments
Mar. 31, 2017
2021 [Member]
Interest Rate Hedging Instruments
Derivatives, Fair Value [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Current Derivatives Assets, net of Collateral
$ (4)
 
$ (4)
 
$ (29)
 
 
 
 
 
 
 
 
Long-Term Derivative Assets, net of Collateral
(8)
 
(8)
 
(3)
 
 
 
 
 
 
 
 
Current Derivative Liabilities, net of Collateral
43 
 
43 
 
19 
 
 
 
 
 
 
 
 
Derivative, Collateral, Right to Reclaim Cash
115 
 
115 
 
262 
 
 
 
 
 
 
 
 
Derivative, Amount of Hedged Item
 
 
 
 
 
 
 
 
 
500 
2,500 
1,000 
1,250 
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Tax
 
 
 
 
 
 
 
 
 
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Effect Net of Tax
 
 
 
 
 
101 
90 
 
 
 
 
Summary of Derivative Instruments [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum length of time hedging using interest rate derivative instruments
 
 
8 years 
 
 
 
 
 
 
 
 
 
 
Derivative, Net Liability Position, Aggregate Fair Value
17 
 
17 
 
 
 
 
 
 
 
 
 
 
Collateral Already Posted, Aggregate Fair Value
 
 
 
 
 
 
 
 
 
 
 
Additional Collateral, Aggregate Fair Value
 
 
 
 
 
 
 
 
 
 
 
Cash Flow Hedge (Gain) Loss to be Reclassified within Twelve Months
 
 
35 
 
 
 
 
 
 
 
 
 
 
Long-term Derivative Liabilities, net of Collateral
$ 51 
 
$ 51 
 
$ 85 
 
 
 
 
 
 
 
 
Use of Collateral (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Financial Instruments Owned and Pledged as Collateral [Line Items]
 
 
Margin deposits
$ 216 1
$ 350 1
Natural gas and power prepayments
27 
25 
Total margin deposits and natural gas and power prepayments with our counterparties
243 2
375 2
Letters of credit issued
731 
798 
First priority liens under power and natural gas agreements
193 
206 
First priority liens under interest rate hedging instruments
41 
55 
Total letters of credit and first priority liens with our counterparties
965 
1,059 
Margin deposits held by us posted by our counterparties
19 1 3
16 1 3
Letters of credit posted with us by our counterparties
33 
43 
Total margin deposits and letters of credit posted with us by our counterparties
52 
59 
Current and Non-current Derivative Assets and Liabilities [Member]
 
 
Financial Instruments Owned and Pledged as Collateral [Line Items]
 
 
Total margin deposits and natural gas and power prepayments with our counterparties
85 2
78 2
Margin deposits held by us posted by our counterparties
Other Current Liabilities [Member]
 
 
Financial Instruments Owned and Pledged as Collateral [Line Items]
 
 
Margin deposits held by us posted by our counterparties
16 
10 
Prepaid Expenses and Other Current Assets [Member]
 
 
Financial Instruments Owned and Pledged as Collateral [Line Items]
 
 
Total margin deposits and natural gas and power prepayments with our counterparties
149 2
288 2
Other Assets [Member]
 
 
Financial Instruments Owned and Pledged as Collateral [Line Items]
 
 
Total margin deposits and natural gas and power prepayments with our counterparties
$ 9 2
$ 9 2
Income Taxes (Income Tax Expense (Benefit)) (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Dec. 31, 2016
Income Tax Contingency [Line Items]
 
 
 
 
 
Income tax (expense) benefit
$ 2,000,000 
$ 4,000,000 
$ 0 
$ (17,000,000)
 
Effective Income Tax Rate, Continuing Operations
(1.00%)
(1.00%)
0.00% 
20.00% 
 
Income Tax Uncertainties [Abstract]
 
 
 
 
 
Unrecognized Tax Benefits, Decrease Resulting from Prior Period Tax Positions
 
 
17,000,000 
 
 
Number of States for NOL Carryforwards
 
 
 
 
21 
Unrecognized Tax Benefits
48,000,000 
 
48,000,000 
 
 
Unrecognized Tax Benefits that Would Impact Effective Tax Rate
10,000,000 
 
10,000,000 
 
 
Unrecognized Tax Benefit Related to Deferred Tax Asset
38,000,000 
 
38,000,000 
 
 
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued
4,000,000 
 
4,000,000 
 
 
Minimum [Member]
 
 
 
 
 
Income Tax Contingency [Line Items]
 
 
 
 
 
Decrease in Unrecognized Tax Benefits is Reasonably Possible
 
 
 
Maximum [Member]
 
 
 
 
 
Income Tax Contingency [Line Items]
 
 
 
 
 
Decrease in Unrecognized Tax Benefits is Reasonably Possible
7,000,000 
 
7,000,000 
 
 
Expiration date 2024 through 2033 [Member]
 
 
 
 
 
Income Tax Uncertainties [Abstract]
 
 
 
 
 
Deferred Tax Assets, Operating Loss Carryforwards, Domestic
 
 
 
 
6,700,000,000 
Expiration date 2017 through 2036 [Member]
 
 
 
 
 
Income Tax Uncertainties [Abstract]
 
 
 
 
 
Deferred Tax Assets, Operating Loss Carryforwards, State and Local
 
 
 
 
3,700,000,000 
Expiration date 2025 through 2033 [Member]
 
 
 
 
 
Income Tax Uncertainties [Abstract]
 
 
 
 
 
Deferred Tax Assets, Operating Loss Carryforwards, Foreign
 
 
 
 
647,000,000 
Foreign Tax Authority [Member]
 
 
 
 
 
Income Tax Uncertainties [Abstract]
 
 
 
 
 
Deferred Tax Assets, Net of Valuation Allowance
 
 
 
 
161,000,000 
Deferred Tax Assets, Valuation Allowance
 
 
 
 
$ 101,000,000 
Earnings (Loss) per Share Reconciliation of Basic to Diluted Weighted Average Shares Outstanding (Details)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Earnings (Loss) per Share Reconciliation of Basic to Diluted Weighted Average Shares Outstanding [Abstract]
 
 
 
 
Weighted Average Number of Shares Outstanding, Basic
355,442 
354,215 
355,164 
353,929 
Share-based awards
3,402 
2,137 
2,051 
Weighted average shares outstanding (diluted)
358,844 
356,352 
355,164 
355,980 
Earnings (Loss) per Share (Details)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Earnings Per Share [Abstract]
 
 
 
 
Share-based awards
5,391 
1,679 
2,789 
1,610 
Stock-Based Compensation (Details) (USD $)
In Millions, except Share data, unless otherwise specified
9 Months Ended 12 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended
Sep. 30, 2017
Dec. 31, 2016
Sep. 30, 2017
Restricted Stock [Member]
Sep. 30, 2017
Restricted Stock [Member]
Dec. 31, 2016
Restricted Stock [Member]
Sep. 30, 2017
Restricted Stock Units (RSUs) [Member]
Sep. 30, 2017
Employee Stock Option [Member]
Sep. 30, 2017
Performance Shares [Member]
Sep. 30, 2016
Performance Shares [Member]
Sep. 30, 2017
Performance Shares [Member]
Sep. 30, 2016
Performance Shares [Member]
Dec. 31, 2016
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options
 
 
$ 28 
$ 28 
 
$ 7 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number
4,121,795 
2,697,136 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price
$ 12.89 
$ 13.59 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period
32,100 
 
 
 
 
 
 
 
 
 
 
 
Allocated Share Based Compensation Expense Liability Classified Share-Based Awards
 
 
 
 
 
 
 
(1)
 
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options
 
 
 
 
 
 
 
 
 
 
 
Employee service share-based compensation, Nonvested awards, Restricted Stock
 
 
1 year 6 months 0 days 
 
 
1 year 2 months 12 days 
 
 
 
 
 
 
Employee service share-based compensation, Nonvested awards, Stock Options
 
 
 
 
 
 
2 years 1 month 6 days 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number
 
 
6,255,141 1
6,255,141 1
4,869,648 
 
 
1,284,621 
 
1,284,621 
 
890,587 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value
 
 
$ 13.31 
$ 13.31 
$ 15.83 
 
 
$ 15.22 
 
$ 15.22 
 
$ 17.90 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period
 
 
 
3,606,816 
 
 
 
 
 
478,984 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value
 
 
 
$ 11.76 
 
 
 
 
 
$ 10.73 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period
 
 
 
546,585 
 
 
 
 
 
54,638 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value
 
 
 
$ 13.90 
 
 
 
 
 
$ 18.38 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period
 
 
 
1,674,738 
 
 
 
 
 
30,312 2
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value
 
 
 
$ 17.07 
 
 
 
 
 
$ 17.21 
 
 
Share-based Compensation Arrangements by Share-based Payment Award, Options, Expirations in Period, Weighted Average Exercise Price
$ 17.70 
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term
4 years 9 months 18 days 
3 years 0 months 0 days 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value
10 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross
1,476,480 
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price
$ 11.70 
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period
4,000 
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price
$ 9.49 
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period
15,721 
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangements by Share-based Payment Award, Options, Forfeitures in Period, Weighted Average Exercise Price
$ 11.69 
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number
2,661,036 
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price
$ 13.54 
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term
2 years 3 months 18 days 
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number
3,949,676 
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price
$ 12.94 
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term
4 years 7 months 6 days 
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value
$ 9 
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate
2.25% 3
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate
0.00% 4
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value
$ 5.38 
 
 
 
 
 
 
 
 
 
 
 
Stock-Based Compensation Equity Classified Share Based Awards (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
Vesting period for graded and cliff vesting options - minimum
 
 
1 year 
 
 
Vesting period for graded and cliff vesting options - maximum
 
 
5 years 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Award Expiration Minimum Range
 
 
5 years 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Award Expiration Maximum Range
 
 
10 years 
 
 
Allocated Share-based Compensation Expense
$ 9 
$ 7 
$ 26 
$ 22 
 
Restricted Stock [Member]
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number
6,255,141 1
 
6,255,141 1
 
4,869,648 
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options
28 
 
28 
 
 
Employee service share-based compensation, Nonvested awards, Restricted Stock
1 year 6 months 0 days 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Total Fair Value
 
 
20 
16 
 
Performance Shares [Member]
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number
1,284,621 
 
1,284,621 
 
890,587 
Allocated Share Based Compensation Expense Liability Classified Share-Based Awards
$ 2 
$ (1)
$ 5 
$ 1 
 
Director Plan [Member]
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number
63,075 
 
63,075 
 
 
Common Stock, Capital Shares Reserved for Future Issuance
300,000 
 
300,000 
 
 
Equity Plan [Member]
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number
6,192,066 
 
6,192,066 
 
 
Common Stock, Capital Shares Reserved for Future Issuance
21,865,106 
 
21,865,106 
 
 
Minimum [Member]
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term
 
 
7 years 3 months 18 days 2
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate
 
 
33.00% 3
 
 
Maximum [Member]
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term
 
 
10 years 0 months 0 days 2
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate
 
 
40.00% 3
 
 
Stock-Based Compensation Liability Classified Share Based Awards (Details) (Performance Shares [Member], USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Dec. 31, 2016
Performance Shares [Member]
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
Allocated Share Based Compensation Expense Liability Classified Share-Based Awards
$ 2 
$ (1)
$ 5 
$ 1 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number
1,284,621 
 
1,284,621 
 
890,587 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value
$ 15.22 
 
$ 15.22 
 
$ 17.90 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period
 
 
478,984 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value
 
 
$ 10.73 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period
 
 
54,638 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value
 
 
$ 18.38 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period
 
 
30,312 1
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value
 
 
$ 17.21 
 
 
Commitments and Contingencies Commitments and Contingencies (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Other Commitments [Line Items]
 
Guarantor Obligations, Current Carrying Value
$ 0 
Segment Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Operating revenues
$ 2,586 
$ 2,355 
$ 6,951 
$ 5,134 
Commodity Margin
864 
820 
2,069 
2,057 
Add: Mark-to-market commodity activity, net and other
1
63 1
(60)2
(63)2
Plant operating expense
228 
215 
812 
741 
Depreciation and amortization expense
179 
161 
542 
490 
Sales, general and other administrative expense
37 
33 
117 
106 
Other operating expenses
23 
18 
63 
55 
Impairment losses
12 
41 
13 
Gain on sale of assets, net
(27)
(Income) loss from unconsolidated investments in power plants
(7)
(6)
(17)
(16)
Income from operations
393 
462 
478 
605 
Interest expense, net of interest income
156 
158 
469 
472 
Debt Extinguishment Costs and Other (Income) Expense, Net
42 
33 
Income (loss) before income taxes
229 
297 
(33)
100 
Lease levelization
33 
40 
(13)
(2)
West [Member]
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Operating revenues
555 
525 
1,670 
1,163 
Commodity Margin
327 
298 
792 
749 
Add: Mark-to-market commodity activity, net and other
(40)1
11 1
(1)2
(5)2
Plant operating expense
83 
79 
291 
268 
Depreciation and amortization expense
63 
56 
189 
168 
Sales, general and other administrative expense
10 
31 
27 
Other operating expenses
13 
30 
23 
Impairment losses
 
28 
13 
Gain on sale of assets, net
 
 
 
(Income) loss from unconsolidated investments in power plants
Income from operations
118 
157 
222 
245 
Texas [Member]
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Operating revenues
1,131 
1,070 
2,735 
2,139 
Commodity Margin
201 
198 
516 
511 
Add: Mark-to-market commodity activity, net and other
88 1
110 1
28 2
2
Plant operating expense
77 
65 
282 
236 
Depreciation and amortization expense
61 
53 
187 
159 
Sales, general and other administrative expense
16 
13 
54 
43 
Other operating expenses
12 
Impairment losses
12 
 
13 
Gain on sale of assets, net
 
 
 
(Income) loss from unconsolidated investments in power plants
Income from operations
117 
175 
(4)
74 
East [Member]
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Operating revenues
908 
766 
2,568 
1,855 
Commodity Margin
336 
324 
761 
797 
Add: Mark-to-market commodity activity, net and other
(39)1
(51)1
(65)2
(44)2
Plant operating expense
75 
78 
260 
258 
Depreciation and amortization expense
55 
52 
166 
163 
Sales, general and other administrative expense
10 
12 
31 
36 
Other operating expenses
23 
27 
Impairment losses
 
Gain on sale of assets, net
 
 
(27)
 
(Income) loss from unconsolidated investments in power plants
(7)
(6)
(17)
(16)
Income from operations
158 
130 
260 
285 
Consolidation, Eliminations [Member]
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Operating revenues
(8)
(6)
(22)
(23)
Commodity Margin
Add: Mark-to-market commodity activity, net and other
(8)1
(7)1
(22)2
(21)2
Plant operating expense
(7)
(7)
(21)
(21)
Depreciation and amortization expense
Sales, general and other administrative expense
(1)
Other operating expenses
(2)
(2)
(1)
Impairment losses
 
Gain on sale of assets, net
 
 
 
(Income) loss from unconsolidated investments in power plants
Income from operations
Operating Segments [Member]
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Operating revenues
2,586 
2,355 
6,951 
5,134 
Operating Segments [Member] |
West [Member]
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Operating revenues
553 
524 
1,666 
1,159 
Operating Segments [Member] |
Texas [Member]
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Operating revenues
1,127 
1,067 
2,723 
2,129 
Operating Segments [Member] |
East [Member]
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Operating revenues
906 
764 
2,562 
1,846 
Operating Segments [Member] |
Consolidation, Eliminations [Member]
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Operating revenues
Intersegment Eliminations [Member]
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Operating revenues
Intersegment Eliminations [Member] |
West [Member]
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Operating revenues
Intersegment Eliminations [Member] |
Texas [Member]
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Operating revenues
12 
10 
Intersegment Eliminations [Member] |
East [Member]
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Operating revenues
Intersegment Eliminations [Member] |
Consolidation, Eliminations [Member]
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Operating revenues
(8)
(6)
(22)
(23)
Other Assets [Member]
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Amortization of Intangible Assets
$ 39 
$ 25 
$ 143 
$ 79