DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
Derivative Instruments - Our derivatives are comprised of over-the-counter natural gas fixed-price swaps and call options.
Swaps - At December 31, 2025, we held over-the-counter natural gas fixed-price swaps for the heating season ending March 2026 with a total notional amount of 5.02 Bcf. At December 31, 2024, we held over-the-counter natural gas fixed-price swaps for the heating season ending March 2025 with a total notional amount of 6.20 Bcf.
Options - At December 31, 2025, we held purchased natural gas call options for the heating season ending March 2026 with total notional amount of 0.50 Bcf, for which we paid premiums of $0.5 million. At December 31, 2024, we held purchased natural gas call options for the heating season ending March 2025 with total notional amount of 0.60 Bcf, for which we paid premiums of $0.6 million.
We have not designated any of our derivative instruments as accounting hedges. These contracts are included in, and recoverable through, our purchased-gas cost adjustment mechanisms. Additionally, premiums paid, changes in fair value and any settlements received associated with these contracts are deferred as part of our unrecovered purchased-gas costs in our consolidated balance sheets. There were no transfers between levels for the periods presented.
Other Financial Instruments - The approximate fair value of cash and cash equivalents, restricted cash and cash equivalents, accounts receivable, and accounts payable is equal to book value, due to the short-term nature of these items. The fair value of our commercial paper was determined using quoted prices in an active market.
The following tables summarize, by level within the fair value hierarchy, our derivative and other assets and liabilities that were accounted for at fair value on a recurring basis at December 31, 2025 and 2024:
| | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2025 |
| Level 1 | | Level 2 | | Netting (c) | | Total |
| (Thousands of dollars) |
| Assets: | | | | | | | |
| | | | | | | |
| | | | | | | |
| United States treasury notes (b) | $ | 9,329 | | | $ | — | | | $ | — | | | $ | 9,329 | |
| Corporate bonds (b) | — | | | 18,643 | | | — | | | 18,643 | |
| Marketable equity securities (d) | 2,627 | | | — | | | — | | | 2,627 | |
| Total assets | $ | 11,956 | | | $ | 18,643 | | | $ | — | | | $ | 30,599 | |
| Liabilities: | | | | | | | |
| Derivative instruments - swaps (a) | $ | — | | | $ | 7,309 | | | $ | — | | | $ | 7,309 | |
(a) The fair value is included in other current assets and other current liabilities in our consolidated balance sheets.
(b) The fair value is included in other current and noncurrent assets in our consolidated balance sheets.
(c) Our over-the-counter natural gas fixed-price swaps are presented on a net basis when the right of offset exists.
(d) The fair value is included in other current assets in our consolidated balance sheets.
| | | | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2024 | | |
| Level 1 | | Level 2 | | Netting (c) | | Total | | |
| (Thousands of dollars) | | |
| Assets: | | | | | | | | | |
| Derivative instruments - swaps (a) | $ | — | | | $ | 25 | | | $ | (25) | | | $ | — | | | |
| United States treasury notes (b) | 8,721 | | | — | | | — | | | 8,721 | | | |
| Corporate bonds (b) | — | | | 13,171 | | | — | | | 13,171 | | | |
| Total assets | $ | 8,721 | | | $ | 13,196 | | | $ | (25) | | | $ | 21,892 | | | |
| Liabilities: | | | | | | | | | |
| Derivative instruments - swaps (a) | $ | — | | | $ | 3,238 | | | $ | (25) | | | $ | 3,213 | | | |
(a) The fair value is included in other current assets and other current liabilities in our consolidated balance sheets.
(b) The fair value is included in other current and noncurrent assets in our consolidated balance sheets.
(c) Our over-the-counter natural gas fixed-price swaps are presented on a net basis when the right of offset exists.
The estimated fair value of our long-term debt, including current maturities, was $2.5 billion and $2.2 billion at December 31, 2025 and December 31, 2024, respectively. The estimated fair value of our long-term debt was determined using quoted market prices and is classified as Level 2.