COVER PAGE
COVER PAGE | 3 Months Ended |
Mar. 31, 2021shares | |
Cover [Abstract] | |
Document type | 10-Q |
Document Quarterly Report | true |
Document period end date | Mar. 31, 2021 |
Document Transition Report | false |
Entity File Number | 001-03016 |
Entity registrant name | WISCONSIN PUBLIC SERVICE CORPORATION |
Entity Tax Identification Number | 39-0715160 |
Entity Incorporation, State or Country Code | WI |
Entity Address, Address Line One | 2830 South Ashland Avenue |
Entity Address, Address Line Two | P.O. Box 19001 |
Entity Address, City or Town | Green Bay |
Entity Address, State or Province | WI |
Entity Address, Postal Zip Code | 54307-9001 |
City Area Code | 800 |
Local Phone Number | 450-7260 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity filer category | Non-accelerated Filer |
Small business | false |
Emerging growth company | false |
Entity Shell Company | false |
Entity common stock, shares outstanding | 23,896,962 |
Entity central index key | 0000107833 |
Amendment flag | false |
Current fiscal year end date | --12-31 |
Document fiscal year focus | 2021 |
Document fiscal period focus | Q1 |
CONDENSED INCOME STATEMENTS
CONDENSED INCOME STATEMENTS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Operating revenues | $ 405.3 | $ 369.4 |
Operating expenses | ||
Cost of sales | 168.1 | 131.7 |
Other operation and maintenance | 95.4 | 91.8 |
Depreciation and amortization | 46 | 43 |
Property and revenue taxes | 10.2 | 10 |
Total operating expenses | 319.7 | 276.5 |
Operating income | 85.6 | 92.9 |
Other income, net | 8.6 | 8.3 |
Interest expense | 16.2 | 16.3 |
Other expense | (7.6) | (8) |
Income before income taxes | 78 | 84.9 |
Income tax expense | 8.7 | 16.7 |
Net income | $ 69.3 | $ 68.2 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 2.5 | $ 2.7 |
Accounts receivable and unbilled revenues, net of reserves of $17.5 and $18.3, respectively | 191 | 190.8 |
Accounts receivable from related parties | 32.1 | 27.6 |
Materials, supplies, and inventories | 76.4 | 92.7 |
Prepaid taxes | 36.6 | 39 |
Other | 24.4 | 12.2 |
Current assets | 363 | 365 |
Long-term assets | ||
Property, plant, and equipment, net of accumulated depreciation and amortization of $1,776.1 and $1,750.7, respectively | 4,908.3 | 4,885.9 |
Regulatory assets | 441.5 | 449.4 |
Goodwill | 36.4 | 36.4 |
Pension and OPEB assets | 166.5 | 159.2 |
Other | 45.6 | 38 |
Long-term assets | 5,598.3 | 5,568.9 |
Total assets | 5,961.3 | 5,933.9 |
Current liabilities | ||
Short-term debt | 200.5 | 210.5 |
Current portion of long-term debt | 400 | 400 |
Accounts payable | 107.6 | 129.6 |
Accounts payable to related parties | 55.8 | 48.8 |
Accrued payroll and benefits | 19 | 22 |
Other | 46.4 | 59 |
Current liabilities | 829.3 | 869.9 |
Long-term liabilities | ||
Long-term debt | 1,247.1 | 1,244.8 |
Deferred income taxes | 711.4 | 682.7 |
Deferred ITCs | 51.5 | 41.3 |
Regulatory liabilities | 760.9 | 772.6 |
Environmental remediation liabilities | 88.3 | 88.3 |
Pension and OPEB obligations | 19 | 19.3 |
Other | 97.7 | 98.3 |
Long-term liabilities | 2,975.9 | 2,947.3 |
Commitments and contingencies (Note 15) | ||
Common shareholder's equity | ||
Common stock – $4 par value; 32,000,000 shares authorized; 23,896,962 shares issued and outstanding | 95.6 | 95.6 |
Additional paid in capital | 1,436.5 | 1,436.4 |
Retained earnings | 624 | 584.7 |
Common shareholders' equity | 2,156.1 | 2,116.7 |
Total liabilities and equity | $ 5,961.3 | $ 5,933.9 |
CONDENSED BALANCE SHEETS (PAREN
CONDENSED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Accounts receivable and unbilled revenues, reserves | $ 17.5 | $ 18.3 |
Property, plant, and equipment, accumulated depreciation and amortization | $ 1,776.1 | $ 1,750.7 |
Common stock, par value (in dollars per share) | $ 4 | $ 4 |
Common stock, shares authorized | 32,000,000 | 32,000,000 |
Common stock, shares issued | 23,896,962 | 23,896,962 |
Common stock, shares outstanding | 23,896,962 | 23,896,962 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating activities | ||
Net income | $ 69.3 | $ 68.2 |
Reconciliation to cash provided by operating activities | ||
Depreciation and amortization | 46 | 43 |
Deferred income taxes and ITCs, net | 23.3 | 10.9 |
Change in – | ||
Accounts receivable and unbilled revenues, net | (3.7) | 26.5 |
Materials, supplies, and inventories | 16.3 | 15.9 |
Prepaid taxes | 2.4 | 14.9 |
Amounts recoverable from customers | (16.8) | 0 |
Other current assets | 4.2 | 2.2 |
Accounts payable | (2.9) | (65) |
Other current liabilities | (14.3) | (2.3) |
Other, net | (6.8) | (6.9) |
Net cash provided by operating activities | 117 | 107.4 |
Investing activities | ||
Capital expenditures | (71.2) | (109.8) |
Proceeds from cash surrender value of life insurance | 0 | 7.1 |
Payments for assets transferred from affiliates | (5.1) | 0 |
Other, net | (0.9) | (0.5) |
Net cash used in investing activities | (77.2) | (103.2) |
Financing activities | ||
Change in short-term debt | (10) | (74.5) |
Payment of dividends to parent | (30) | (30) |
Equity contribution from parent | 0 | 100 |
Net cash used in financing activities | (40) | (4.5) |
Net change in cash and cash equivalents | (0.2) | (0.3) |
Cash and cash equivalents at beginning of period | 2.7 | 2.3 |
Cash and cash equivalents at end of period | $ 2.5 | $ 2 |
CONDENSED STATEMENTS OF EQUITY
CONDENSED STATEMENTS OF EQUITY - USD ($) $ in Millions | Total | Total common shareholder's equity | Common stock | Additional paid in capital | Retained earnings |
Balance at Dec. 31, 2019 | $ 1,939.8 | $ 95.6 | $ 1,221.1 | $ 623.1 | |
Statements of equity | |||||
Net income | $ 68.2 | 68.2 | 0 | 0 | 68.2 |
Equity contribution from parent | 100 | 100 | 0 | 100 | 0 |
Payment of dividends to parent | (30) | 0 | 0 | (30) | |
Stock-based compensation and other | 0.1 | 0 | 0.1 | 0 | |
Balance at Mar. 31, 2020 | 2,078.1 | 95.6 | 1,321.2 | 661.3 | |
Balance at Dec. 31, 2020 | 2,116.7 | 95.6 | 1,436.4 | 584.7 | |
Statements of equity | |||||
Net income | 69.3 | 69.3 | 0 | 0 | 69.3 |
Equity contribution from parent | $ 0 | ||||
Payment of dividends to parent | (30) | 0 | 0 | (30) | |
Stock-based compensation and other | 0.1 | 0 | 0.1 | 0 | |
Balance at Mar. 31, 2021 | $ 2,156.1 | $ 95.6 | $ 1,436.5 | $ 624 |
GENERAL INFORMATION
GENERAL INFORMATION | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GENERAL INFORMATION | GENERAL INFORMATION Wisconsin Public Service Corporation serves approximately 454,300 electric customers and 336,500 natural gas customers. As used in these notes, the term "financial statements" refers to the condensed financial statements. This includes the income statements, balance sheets, statements of cash flows, and statements of equity, unless otherwise noted. In this report, when we refer to "the Company," "us," "we," "our," or "ours," we are referring to Wisconsin Public Service Corporation. We have prepared the unaudited interim financial statements presented in this Form 10-Q pursuant to the rules and regulations of the SEC and GAAP. Accordingly, these financial statements do not include all of the information and footnotes required by GAAP for annual financial statements. These financial statements should be read in conjunction with the financial statements and footnotes in our Annual Report on Form 10-K for the year ended December 31, 2020. Financial results for an interim period may not give a true indication of results for the year. In particular, the results of operations for the three months ended March 31, 2021 are not necessarily indicative of expected results for 2021 due to seasonal variations and other factors, including any continuing financial impacts from the COVID-19 pandemic. In management's opinion, we have included all adjustments, normal and recurring in nature, necessary for a fair presentation of our financial results. |
OPERATING REVENUES
OPERATING REVENUES | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
OPERATING REVENUES | OPERATING REVENUES For more information about our operating revenues, see Note 1(d), Operating Revenues, in our 2020 Annual Report on Form 10-K. Disaggregation of Operating Revenues The following tables present our operating revenues disaggregated by revenue source for our utility segment. We do not have any revenues associated with our other segment. We disaggregate revenues into categories that depict how the nature, amount, timing, and uncertainty of revenues and cash flows are affected by economic factors. Revenues are further disaggregated by electric and natural gas operations and then by customer class. Each customer class within our electric and natural gas operations have different expectations of service, energy and demand requirements, and can be impacted differently by regulatory activities within their jurisdictions. Wisconsin Public Service Corporation Three Months Ended March 31 (in millions) 2021 2020 Electric utility $ 271.4 $ 271.3 Natural gas utility 132.3 96.9 Total revenues from contracts with customers 403.7 368.2 Other operating revenues 1.6 1.2 Total operating revenues $ 405.3 $ 369.4 Revenues from Contracts with Customers Electric Utility Operating Revenues The following table disaggregates electric utility operating revenues into customer class: Electric Utility Operating Revenues Three Months Ended March 31 (in millions) 2021 2020 Residential $ 101.9 $ 101.1 Small commercial and industrial 84.1 83.3 Large commercial and industrial 55.2 51.2 Other 2.1 2.1 Total retail revenues 243.3 237.7 Wholesale 18.9 22.4 Resale 5.9 5.3 Other utility revenues 3.3 5.9 Total electric utility operating revenues $ 271.4 $ 271.3 Natural Gas Utility Operating Revenues The following table disaggregates natural gas utility operating revenues into customer class: Natural Gas Utility Operating Revenues Three Months Ended March 31 (in millions) 2021 2020 Residential $ 67.3 $ 58.4 Commercial and industrial 38.7 33.1 Total retail revenues 106.0 91.5 Transportation 5.8 6.0 Other utility revenues (1) 20.5 (0.6) Total natural gas utility operating revenues $ 132.3 $ 96.9 (1) Includes revenues subject to collection from (refund to) customers for purchased gas adjustment costs. The increase primarily relates to the high natural gas costs that were incurred as a result of the extreme winter weather conditions in February 2021. See Note 17, Regulatory Environment, for more information. Other Operating Revenues Other operating revenues consist primarily of the following: Three Months Ended March 31 (in millions) 2021 2020 Late payment charges $ 1.1 $ 1.0 Alternative revenues 0.5 0.2 Total other operating revenues $ 1.6 $ 1.2 |
CREDIT LOSSES
CREDIT LOSSES | 3 Months Ended |
Mar. 31, 2021 | |
Credit Loss [Abstract] | |
CREDIT LOSSES | CREDIT LOSSES Our exposure to credit losses is related to our accounts receivable and unbilled revenue balances, which are generated from the sale of electricity and natural gas by our regulated utility operations. Our regulated utility operations are included in our utility segment. No accounts receivable and unbilled revenue balances were reported in the other segment at March 31, 2021 and December 31, 2020. We evaluate the collectability of our accounts receivable and unbilled revenue balances considering a combination of factors. For some of our larger customers and also in circumstances where we become aware of a specific customer's inability to meet its financial obligations to us, we record a specific allowance for credit losses against amounts due in order to reduce the net recognized receivable to the amount we reasonably believe will be collected. For all other customers, we use the accounts receivable aging method to calculate an allowance for credit losses. Using this method, we classify accounts receivable into different aging buckets and calculate a reserve percentage for each aging bucket based upon historical loss rates. The calculated reserve percentages are updated on at least an annual basis, in order to ensure recent macroeconomic, political, and regulatory trends are captured in the calculation, to the extent possible. Risks identified that we do not believe are reflected in the calculated reserve percentages, are assessed on a quarterly basis to determine whether further adjustments are required. We monitor our ongoing credit exposure through active review of counterparty accounts receivable balances against contract terms and due dates. Our activities include timely account reconciliation, dispute resolution and payment confirmation. To the extent possible, we work with customers with past due balances to negotiate payment plans, but will disconnect customers for non-payment as allowed by the PSCW, if necessary, and employ collection agencies and legal counsel to pursue recovery of defaulted receivables. For our larger customers, detailed credit review procedures may be performed in advance of any sales being made. We sometimes require letters of credit, parental guarantees, prepayments or other forms of credit assurance from our larger customers to mitigate credit risk. See Note 17, Regulatory Environment, for information on certain regulatory actions that were and/or are being taken for the purpose of ensuring that essential utility services are available to our customers during the COVID-19 pandemic. We have included a table below that shows our gross third-party receivable balances and related allowance for credit losses. (in millions) March 31, 2021 December 31, 2020 Accounts receivable and unbilled revenues $ 208.5 $ 209.1 Allowance for credit losses 17.5 18.3 Accounts receivable and unbilled revenues, net (1) $ 191.0 $ 190.8 Total accounts receivable, net – past due greater than 90 days (1) $ 10.8 $ 12.6 Past due greater than 90 days – collection risk mitigated by regulatory mechanisms (1) 96.1 % 94.4 % (1) Our exposure to credit losses for certain regulated utility customers is mitigated by a regulatory mechanism we have in place. Specifically, our residential tariffs include a mechanism for cost recovery or refund of uncollectible expense based on the difference between actual uncollectible write-offs and the amounts recovered in rates. As a result, at March 31, 2021, $82.3 million, or 43.1%, of our net accounts receivable and unbilled revenues balance had regulatory protections in place to mitigate the exposure to credit losses. In addition, we have received specific orders related to the deferral of certain costs (including credit losses) incurred as a result of the COVID-19 pandemic. The additional protections related to our accounts receivable and unbilled revenue balances provided by these orders are subject to prudency reviews and are still being assessed. They are not reflected in the percentage in the above table or this note. See Note 17, Regulatory Environment, for more information. A rollforward of the allowance for credit losses for the three months ended March 31, 2021 and 2020 is included below: Three Months Ended (in millions) March 31, 2021 March 31, 2020 Balance at December 31 $ 18.3 $ 4.2 Provision for credit losses 0.4 3.2 Provision for credit losses deferred for future recovery or refund (0.1) 3.1 Write-offs charged against the allowance (2.1) (2.7) Recoveries of amounts previously written off 1.0 1.0 Balance at March 31 $ 17.5 $ 8.8 |
REGULATORY ASSETS AND LIABILITI
REGULATORY ASSETS AND LIABILITIES | 3 Months Ended |
Mar. 31, 2021 | |
Regulatory Assets and Liabilities Disclosure [Abstract] | |
REGULATORY ASSETS AND LIABILITIES | REGULATORY ASSETS AND LIABILITIES The following regulatory assets and liabilities were reflected on our balance sheets at March 31, 2021 and December 31, 2020. For more information on our regulatory assets and liabilities, see Note 6, Regulatory Assets and Liabilities, in our 2020 Annual Report on Form 10-K. (in millions) March 31, 2021 December 31, 2020 Regulatory assets Pension and OPEB costs $ 155.6 $ 161.4 Environmental remediation costs 115.3 116.1 Plant retirements 56.8 58.5 Income tax related items 50.3 46.7 ReACT™ 17.5 18.2 Energy costs recoverable through rate adjustments (1) 16.8 — Asset retirement obligations 13.5 13.1 Uncollectible expense 12.4 12.5 Forward Wind Energy Center 8.4 10.3 Other, net 11.7 12.6 Total regulatory assets $ 458.3 $ 449.4 Balance sheet presentation Other current assets (1) $ 16.8 $ — Regulatory assets 441.5 449.4 Total regulatory assets $ 458.3 $ 449.4 (1) The increase in these regulatory assets primarily relates to the high natural gas costs that were incurred as a result of the extreme winter weather conditions in February 2021. See Note 17, Regulatory Environment, for more information. (in millions) March 31, 2021 December 31, 2020 Regulatory liabilities Income tax related items $ 386.7 $ 397.0 Removal costs 194.4 193.7 Pension and OPEB benefits 115.5 115.9 Earnings sharing mechanism 30.7 36.8 Electric transmission costs 16.6 16.8 Energy costs refundable through rate adjustments 10.6 9.7 Other, net 6.5 6.3 Total regulatory liabilities $ 761.0 $ 776.2 Balance sheet presentation Other current liabilities $ 0.1 $ 3.6 Regulatory liabilities 760.9 772.6 Total regulatory liabilities $ 761.0 $ 776.2 |
COMMON EQUITY
COMMON EQUITY | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
COMMON EQUITY | COMMON EQUITY Various financing arrangements and regulatory requirements impose certain restrictions on our ability to transfer funds to the sole holder of our common stock, Integrys, in the form of cash dividends, loans, or advances. In addition, Wisconsin law prohibits us from making loans to or guaranteeing obligations of WEC Energy Group, Integrys, or their subsidiaries. See Note 11, Common Equity, in our 2020 Annual Report on Form 10-K for additional information on these and other restrictions. We do not believe that these restrictions will materially affect our operations or limit any dividend payments in the foreseeable future. |
SHORT-TERM DEBT AND LINES OF CR
SHORT-TERM DEBT AND LINES OF CREDIT | 3 Months Ended |
Mar. 31, 2021 | |
Short-term Debt [Abstract] | |
SHORT-TERM DEBT AND LINES OF CREDIT | SHORT-TERM DEBT AND LINES OF CREDIT The following table shows our short-term borrowings and their corresponding weighted-average interest rates: (in millions, except percentages) March 31, 2021 December 31, 2020 Commercial paper Amount outstanding $ 200.5 $ 210.5 Weighted-average interest rate on amounts outstanding 0.16 % 0.18 % Our average amount of commercial paper borrowings based on daily outstanding balances during the three months ended March 31, 2021 was $207.3 million with a weighted-average interest rate during the period of 0.16%. The information in the table below relates to our revolving credit facility used to support our commercial paper borrowing program, including available capacity under this facility: (in millions) Maturity March 31, 2021 Revolving credit facility October 2022 $ 400.0 Less: Letters of credit issued inside credit facility $ 1.3 Commercial paper outstanding 200.5 Available capacity under existing credit facility $ 198.2 |
MATERIALS, SUPPLIES, AND INVENT
MATERIALS, SUPPLIES, AND INVENTORIES | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
MATERIALS, SUPPLIES, AND INVENTORIES | MATERIALS, SUPPLIES, AND INVENTORIES Our inventory consisted of: (in millions) March 31, 2021 December 31, 2020 Materials and supplies $ 47.9 $ 45.8 Fossil fuel 22.7 28.0 Natural gas in storage 5.8 18.9 Total $ 76.4 $ 92.7 Substantially all materials and supplies, fossil fuel inventories, and natural gas in storage are recorded using the weighted-average cost method of accounting. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The provision for income taxes differs from the amount of income tax determined by applying the applicable United States statutory federal income tax rate to income before income taxes as a result of the following: Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 (in millions) Amount Effective Tax Rate Amount Effective Tax Rate Statutory federal income tax $ 16.4 21.0 % $ 17.8 21.0 % State income taxes net of federal tax benefit 4.9 6.3 % 5.2 6.1 % Federal excess deferred tax amortization – Wisconsin unprotected (10.5) (13.4) % (4.0) (4.7) % Federal excess deferred tax amortization (1.6) (2.1) % (1.6) (1.9) % Other (0.5) (0.6) % (0.7) (0.8) % Total income tax expense $ 8.7 11.2 % $ 16.7 19.7 % The effective tax rates of 11.2% and 19.7% for the three months ended March 31, 2021 and 2020, respectively, differ from the United States statutory federal income tax rate of 21%, primarily due to the recognition of certain unprotected deferred tax benefits created as a result of the Tax Legislation. In accordance with the rate order received from the PSCW in December 2019, we are amortizing the unprotected deferred tax benefits over periods ranging from two years to four years, to reduce near-term rate impacts to our customers. In addition, as discussed in more detail below, the impact of the protected benefits associated with the Tax Legislation drove a decrease in the effective tax rate. These items were partially offset by state income taxes. The Tax Legislation required us to remeasure the deferred income taxes at our utility segment and we began to amortize the resulting excess protected deferred income taxes beginning in 2018 in accordance with normalization requirements (see federal excess deferred tax amortization line above). See Note 17, Regulatory Environment, for more information on unprotected tax credits. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Fair value accounting rules provide a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are defined as follows: Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 – Pricing inputs are observable, either directly or indirectly, but are not quoted prices included within Level 1. Level 2 includes those financial instruments that are valued using external inputs within models or other valuation methods. Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methods that result in management's best estimate of fair value. Level 3 instruments include those that may be more structured or otherwise tailored to customers' needs. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. We use a mid-market pricing convention (the mid-point price between bid and ask prices) as a practical measure for valuing certain derivative assets and liabilities. We primarily use a market approach for recurring fair value measurements and attempt to use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. When possible, we base the valuations of our derivative assets and liabilities on quoted prices for identical assets and liabilities in active markets. These valuations are classified in Level 1. The valuations of certain contracts not classified as Level 1 may be based on quoted market prices received from counterparties and/or observable inputs for similar instruments. Transactions valued using these inputs are classified in Level 2. Certain derivatives are categorized in Level 3 due to the significance of unobservable or internally-developed inputs. The following tables summarize our financial assets and liabilities that were accounted for at fair value on a recurring basis, categorized by level within the fair value hierarchy: March 31, 2021 (in millions) Level 1 Level 2 Level 3 Total Derivative assets Natural gas contracts $ 1.6 $ 0.6 $ — $ 2.2 FTRs — — 0.4 0.4 Coal contracts — 0.5 — 0.5 Total derivative assets $ 1.6 $ 1.1 $ 0.4 $ 3.1 Derivative liabilities Natural gas contracts $ 0.6 $ 0.1 $ — $ 0.7 Coal contracts — 0.3 — 0.3 Total derivative liabilities $ 0.6 $ 0.4 $ — $ 1.0 December 31, 2020 (in millions) Level 1 Level 2 Level 3 Total Derivative assets Natural gas contracts $ 1.6 $ 0.1 $ — $ 1.7 FTRs — — 1.2 1.2 Coal contracts — 0.4 — 0.4 Total derivative assets $ 1.6 $ 0.5 $ 1.2 $ 3.3 Derivative liabilities Natural gas contracts $ 1.6 $ 0.3 $ — $ 1.9 Coal contracts — 0.5 — 0.5 Total derivative liabilities $ 1.6 $ 0.8 $ — $ 2.4 The derivative assets and liabilities listed in the tables above include options, futures, physical commodity contracts, and other instruments used to manage market risks related to changes in commodity prices. They also include FTRs, which are used to manage electric transmission congestion costs in the MISO Energy and Operating Reserves Markets. The following table summarizes the changes to derivatives classified as Level 3 in the fair value hierarchy: Three Months Ended March 31 (in millions) 2021 2020 Balance at the beginning of the period $ 1.2 $ 1.3 Purchases 0.1 — Settlements (0.9) (0.8) Balance at the end of the period $ 0.4 $ 0.5 Fair Value of Financial Instruments The following table shows the financial instruments included on our balance sheets that were not recorded at fair value: March 31, 2021 December 31, 2020 (in millions) Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt, including current portion (1) $ 1,613.9 $ 1,779.9 $ 1,613.5 $ 1,935.9 (1) The carrying amount of long-term debt excludes finance lease obligations of $33.2 million and $31.3 million at March 31, 2021 and December 31, 2020, respectively. The fair value of our long-term debt is categorized within Level 2 of the fair value hierarchy. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS We use derivatives as part of our risk management program to manage the risks associated with the price volatility of purchased power, generation, and natural gas costs for the benefit of our customers. Our approach is non-speculative and designed to mitigate risk. Our regulated hedging programs are approved by the PSCW. We record derivative instruments on our balance sheets as an asset or liability measured at fair value unless they qualify for the normal purchases and sales exception and are so designated. We continually assess our contracts designated as normal and will discontinue the treatment of these contracts as normal if the required criteria are no longer met. Changes in the derivative's fair value are recognized currently in earnings unless specific hedge accounting criteria are met or we receive regulatory treatment for the derivative. For most energy-related physical and financial contracts in our regulated operations that qualify as derivatives, the PSCW allows the effects of fair value accounting to be offset to regulatory assets and liabilities. The following table shows our derivative assets and derivative liabilities, along with their classification on our balance sheets. None of our derivatives are designated as hedging instruments. March 31, 2021 December 31, 2020 (in millions) Derivative Assets Derivative Liabilities Derivative Assets Derivative Liabilities Other current Natural gas contracts $ 2.2 $ 0.6 $ 1.7 $ 1.7 FTRs 0.4 — 1.2 — Coal contracts 0.2 0.2 0.2 0.3 Total other current (1) 2.8 0.8 3.1 2.0 Other long-term Natural gas contracts — 0.1 — 0.2 Coal contracts 0.3 0.1 0.2 0.2 Total other long-term (1) 0.3 0.2 0.2 0.4 Total $ 3.1 $ 1.0 $ 3.3 $ 2.4 (1) On our balance sheets, we classify derivative assets and liabilities as other current or other long-term based on the maturities of the underlying contracts. Realized gains (losses) on derivatives are primarily recorded in cost of sales on the income statements. Our estimated notional sales volumes and realized gains (losses) were as follows: Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 (in millions) Volumes Gains (Losses) Volumes Gains (Losses) Natural gas contracts 13.6 Dth $ (1.7) 12.7 Dth $ (4.4) FTRs 2.7 MWh 0.9 1.9 MWh 0.4 Total $ (0.8) $ (4.0) On our balance sheets, the amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral are not offset against the fair value amounts recognized for derivative instruments executed with the same counterparty under the same master netting arrangement. At March 31, 2021 and December 31, 2020, we had posted cash collateral of $1.3 million and $3.7 million, respectively, in our margin accounts. These amounts were recorded on our balance sheets in other current assets. The following table shows derivative assets and derivative liabilities if derivative instruments by counterparty were presented net on our balance sheets: March 31, 2021 December 31, 2020 (in millions) Derivative Assets Derivative Liabilities Derivative Assets Derivative Liabilities Gross amount recognized on the balance sheet $ 3.1 $ 1.0 $ 3.3 $ 2.4 Gross amount not offset on the balance sheet (0.6) (0.6) (1.6) (1.6) Net amount $ 2.5 $ 0.4 $ 1.7 $ 0.8 |
GUARANTEES
GUARANTEES | 3 Months Ended |
Mar. 31, 2021 | |
Guarantees [Abstract] | |
GUARANTEES | GUARANTEESAs of March 31, 2021, we had $20.6 million of standby letters of credit issued by financial institutions for the benefit of third parties that extended credit to us which automatically renew each year unless proper termination notice is given. These amounts are not reflected on our balance sheets. |
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS | 3 Months Ended |
Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFITS | EMPLOYEE BENEFITS The following tables show the components of net periodic benefit cost (credit) for our benefit plans. Pension Benefits Three Months Ended March 31 (in millions) 2021 2020 Service cost $ 3.0 $ 2.6 Interest cost 5.5 6.2 Expected return on plan assets (12.9) (12.1) Amortization of net actuarial loss 6.9 5.8 Net periodic benefit cost $ 2.5 $ 2.5 OPEB Benefits Three Months Ended March 31 (in millions) 2021 2020 Service cost $ 1.2 $ 1.2 Interest cost 1.0 1.3 Expected return on plan assets (5.0) (4.6) Amortization of prior service credit (2.6) (2.6) Amortization of net actuarial (gain) loss (0.5) (0.3) Net periodic benefit credit $ (5.9) $ (5.0) During the three months ended March 31, 2021, we made contributions and payments of $0.2 million related to our pension plans and $0.3 million related to our OPEB plans. We expect to make contributions and payments of $0.5 million related to our pension plans and $0.6 million related to our OPEB plans during the remainder of 2021, dependent upon various factors affecting us, including our liquidity position and possible tax law changes. |
GOODWILL
GOODWILL | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | GOODWILLGoodwill represents the excess of the cost of an acquisition over the fair value of the identifiable net assets acquired. We had no changes to the carrying amount of goodwill during the three months ended March 31, 2021. We had no accumulated impairment losses related to our goodwill as of March 31, 2021. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION We use net income to measure segment profitability and to allocate resources to our businesses. At March 31, 2021, we reported two segments, which are described below. Our utility segment includes our electric and natural gas utility operations, which serve customers in northeastern and central Wisconsin. Our electric utility operations are engaged in the generation, distribution, and sale of electricity. Our natural gas utility operations are engaged in the purchase, distribution, and sale of natural gas to retail customers as well as the transportation of customer-owned natural gas. Our other segment primarily consists of equity earnings from our investment in Wisconsin River Power Company. The following tables show summarized financial information for the three months ended March 31, 2021 and 2020, related to our reportable segments: (in millions) Utility Other Wisconsin Public Service Corporation Three Months Ended March 31, 2021 Operating revenues $ 405.3 $ — $ 405.3 Other operation and maintenance 95.4 — 95.4 Depreciation and amortization 46.0 — 46.0 Other income, net 8.2 0.4 8.6 Interest expense 16.2 — 16.2 Income tax expense 8.6 0.1 8.7 Net income 69.0 0.3 69.3 (in millions) Utility Other Wisconsin Public Service Corporation Three Months Ended March 31, 2020 Operating revenues $ 369.4 $ — $ 369.4 Other operation and maintenance 91.8 — 91.8 Depreciation and amortization 43.0 — 43.0 Other income, net 7.9 0.4 8.3 Interest expense 16.3 — 16.3 Income tax expense 16.6 0.1 16.7 Net income 67.9 0.3 68.2 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES We have significant commitments and contingencies arising from our operations, including those related to unconditional purchase obligations, environmental matters, and enforcement and litigation matters. Unconditional Purchase Obligations We have obligations to distribute and sell electricity and natural gas to our customers and expect to recover costs related to these obligations in future customer rates. In order to meet these obligations, we routinely enter into long-term purchase and sale commitments for various quantities and lengths of time. Our minimum future commitments related to these purchase obligations as of March 31, 2021, were approximately $0.8 billion. Environmental Matters Consistent with other companies in the energy industry, we face significant ongoing environmental compliance and remediation obligations related to current and past operations. Specific environmental issues affecting us include, but are not limited to, current and future regulation of air emissions such as sulfur dioxide, NOx, fine particulates, mercury, and GHGs; water intake and discharges; management of coal combustion products such as fly ash; and remediation of impacted properties, including former manufactured gas plant sites. Air Quality National Ambient Air Quality Standards After completing its review of the 2008 ozone standard, the EPA released a final rule in October 2015, creating a more stringent standard than the 2008 NAAQS. The 2015 ozone standard lowered the 8-hour limit for ground-level ozone. In December 2020, the EPA completed its 5-year review of the ozone standard and issued a final decision to retain, without any changes, the existing 2015 standard. Under Executive Order 13990, the Biden Administration ordered that all agencies review existing regulations, orders, guidance documents, policies, and similar actions promulgated, issued or adopted between January 20, 2017 and January 20, 2021. Consequently, the December 2020 decision to retain the 2015 ozone standards with no changes is currently under review by the EPA. The EPA issued final nonattainment area designations for the 2015 ozone standard in April 2018. The following counties within our service territory were designated as partial nonattainment: Door and Manitowoc. This re-designation was challenged in the D.C. Circuit Court of Appeals in Clean Wisconsin et al. v. U.S. Environmental Protection Agency. A decision was issued in July 2020 remanding the rule to the EPA for further evaluation. Based on the 2017 to 2019 data, the EPA re-designated Door County as attainment/maintenance in June 2020. In February 2021, the Wisconsin Department of Natural Resources proposed draft revisions to the Wisconsin Administrative Code to adopt the 2015 ozone standard and incorporate by reference the federal air pollution monitoring requirements related to the NAAQS. The comment period for the proposed rule revisions ended April 15, 2021. We believe that we are well positioned to meet the requirements associated with the 2015 ozone standard and do not expect to incur significant costs to comply with associated state or federal rules. In addition to the 2015 ozone standard, in December 2020, the EPA completed its 5-year review of the 2012 standard for particulate matter, including fine particulate matter. The EPA determined that no revisions were necessary to the current standard. All counties within our service territory are in attainment with the 2012 standards. This determination is also subject to review under Executive Order 13990. Climate Change The ACE rule, effective since September 2019, was vacated by the D.C. Circuit Court of Appeals in January 2021. The ACE rule replaced the Clean Power Plan and provided existing coal-fired generating units with standards for achieving GHG emission reductions. In a memorandum issued to the EPA regional administrators in February 2021, the EPA stated that the D.C. Circuit Court decision meant no existing rule regulates GHG emissions from electric generating units. The EPA is currently reviewing its options for such regulations. In January 2021, the EPA finalized a rule to revise the New Source Performance Standards for GHG emissions from new, modified, and reconstructed fossil-fueled power plants. The rule became effective March 14, 2021; however, on March 17, 2021 the EPA asked the D.C. Circuit Court of Appeals to vacate and remand the final rule. Despite this uncertainty, WEC Energy Group continues to move forward on the ESG Progress Plan, which is heavily focused on reducing GHG emissions. The ESG Progress Plan includes the retirement of older, fossil-fueled generation, to be replaced with zero-carbon-emitting renewables and clean natural gas-fueled generation by 2025. By the end of 2020, WEC Energy Group was able to reduce CO 2 emissions from its electric generation fleet more than 50% below 2005 levels. As a result, WEC Energy Group announced new goals in May 2021. WEC Energy Group is committing to a 60% reduction in carbon emissions from its electric generation fleet by 2025 and an 80% reduction by the end of 2030, both from a 2005 baseline. WEC Energy Group expects to achieve these goals by making operating refinements, retiring less efficient generating units, and executing its capital plan. Over the longer term, the target for WEC Energy Group's generation fleet is net-zero carbon emissions by 2050. We have already retired approximately 300 MW of coal-fired generation since the beginning of 2018. As part of the ESG Progress Plan, WEC Energy Group expects to retire approximately 1,800 MW of additional fossil-fueled generation by 2025, which includes the planned retirements in 2023-2024 of the jointly-owned Columbia Units 1-2. WEC Energy Group continues to reduce methane emissions by improving its natural gas distribution system. WEC Energy Group's initial 2030 goal called for a 30% reduction in methane emissions from a 2011 baseline. Given advancements with renewable natural gas, WEC Energy Group is setting a new target across its natural gas distribution operations to achieve net-zero methane emissions by the end of 2030. We are required to report our CO 2 equivalent emissions from the electric generating facilities we operate under the EPA Greenhouse Gases Reporting Program. We reported CO 2 equivalent emissions of 5.4 million metric tonnes to the EPA for 2020. The level of CO 2 and other GHG emissions varies from year to year and is dependent on the level of electric generation and mix of fuel sources, which is determined primarily by demand, the availability of the generating units, the unit cost of fuel consumed, and how our units are dispatched by MISO. We are also required to report CO 2 equivalent amounts related to the natural gas that our natural gas operations distribute and sell. We reported CO 2 equivalent emissions of 3.5 million metric tonnes to the EPA for 2020. Cross-State Air Pollution Rule Update Rule Revision In 2015, the EPA determined that several upwind states had failed to submit state implementation plans that addressed their "Good Neighbor" obligations (i.e., the states projected NOx emissions significantly contribute to a continuing downwind nonattainment and/or maintenance problem); therefore, by statute, the EPA was required to issue a federal implementation plan. In March 2021, the EPA finalized a CSAPR update rule revision that keeps nine of the 21 CSAPR affected states (including Wisconsin) as a Group 2 NOx ozone season trading program source and found that the prior CSAPR update is sufficient to meet its "Good Neighbor" obligations. No further NOx reductions would be needed within these nine states. This rule becomes effective June 29, 2021. We do not expect that the final rule will have a material impact on our financial condition or results of operations. Water Quality Steam Electric Effluent Limitation Guidelines The EPA's final 2015 ELG rule took effect in January 2016 and was modified in 2020 to revise the treatment technology requirements related to BATW at existing facilities. This rule created new requirements for several types of power plant wastewaters. The new requirement that affects us relates to discharge limits for BATW. Our Weston power plant facility already has advanced wastewater treatment technologies installed that meet many of the discharge limits established by this rule. There will, however, need to be facility modifications to meet the water permit requirements for the BATW systems at Weston Unit 3. Based on engineering cost estimates, we expect that compliance with the ELG rule will require approximately $10 million in capital investment. Land Quality Manufactured Gas Plant Remediation We have identified sites at which we or a predecessor company owned or operated a manufactured gas plant or stored manufactured gas. We have also identified other sites that may have been impacted by historical manufactured gas plant activities. We are responsible for the environmental remediation of these sites, some of which are in the EPA Superfund Alternative Approach Program. We are also working with various state jurisdictions in our investigation and remediation planning. These sites are at various stages of investigation, monitoring, remediation, and closure. In addition, we are coordinating the investigation and cleanup of some of these sites subject to the jurisdiction of the EPA under what is called a "multisite" program. This program involves prioritizing the work to be done at the sites, preparation and approval of documents common to all of the sites, and use of a consistent approach in selecting remedies. At this time, we cannot estimate future remediation costs associated with these sites beyond those described below. The future costs for detailed site investigation, future remediation, and monitoring are dependent upon several variables including, among other things, the extent of remediation, changes in technology, and changes in regulation. Historically, our regulators have allowed us to recover incurred costs, net of insurance recoveries and recoveries from potentially responsible parties, associated with the remediation of manufactured gas plant sites. Accordingly, we have established regulatory assets for costs associated with these sites. We have established the following regulatory assets and reserves for manufactured gas plant sites: (in millions) March 31, 2021 December 31, 2020 Regulatory assets $ 115.3 $ 116.1 Reserves for future environmental remediation 88.3 88.3 Enforcement and Litigation Matters We are involved in legal and administrative proceedings before various courts and agencies with respect to matters arising in the ordinary course of business. Although we are unable to predict the outcome of these matters, management believes that appropriate reserves have been established and that final settlement of these actions will not have a material impact on our financial condition or results of operations. Consent Decrees Weston and Pulliam Power Plants In November 2009, the EPA issued an NOV to us, which alleged violations of the CAA's New Source Review requirements relating to certain projects completed at the Weston and Pulliam power plants from 1994 to 2009. We entered into a Consent Decree with the EPA resolving this NOV. This Consent Decree was entered by the United States District Court for the Eastern District of Wisconsin in March 2013. With the retirement of Pulliam Units 7 and 8 in October 2018, we completed the mitigation projects required by the Consent Decree and received a completeness letter from the EPA in October 2018. We are working with the EPA on a closeout process for the Consent Decree. Joint Ownership Power Plants – Columbia and Edgewater In December 2009, the EPA issued an NOV to Wisconsin Power and Light Company, the operator of the Columbia and Edgewater plants, and the other joint owners of these plants, including Madison Gas and Electric, WE (former co-owner of an Edgewater unit), and us. The NOV alleged violations of the CAA's New Source Review requirements related to certain projects completed at those plants. We, along with Wisconsin Power and Light Company, Madison Gas and Electric, and WE, entered into a Consent Decree with the EPA resolving this NOV. This Consent Decree was entered by the United States District Court for the Western District of Wisconsin in June 2013. As a result of the continued implementation of the Consent Decree related to the jointly owned Columbia and Edgewater plants, the Edgewater 4 generating unit was retired in September 2018. Wisconsin Power and Light Company has started the process to close out this Consent Decree. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 3 Months Ended |
Mar. 31, 2021 | |
Supplemental Cash Flow Information [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION Three Months Ended March 31 (in millions) 2021 2020 Cash paid for interest, net of amount capitalized $ 4.3 $ 4.9 Significant non-cash investing and financing transactions: Accounts payable related to construction costs 11.6 17.6 |
REGULATORY ENVIRONMENT
REGULATORY ENVIRONMENT | 3 Months Ended |
Mar. 31, 2021 | |
Regulated Operations [Abstract] | |
REGULATORY ENVIRONMENT | REGULATORY ENVIRONMENT Recovery of Natural Gas Costs Due to the cold temperatures, wind, snow, and ice throughout the central part of the country during February 2021, the cost of gas purchased for our natural gas utility customers was temporarily driven significantly higher than our normal winter weather expectations. We have a regulatory mechanism in place for recovering all prudently incurred gas costs. On March 30, 2021, we filed our revised natural gas rate sheets with the PSCW reflecting approximately $28 million of natural gas costs in excess of the benchmark set in our gas cost recovery mechanism. We are authorized to recover these excess costs over a period of three months, beginning in April 2021. Coronavirus Disease – 2019 The global outbreak of COVID-19 was declared a pandemic by the WHO and the CDC. COVID-19 has spread globally, including throughout the United States and, in turn, our service territory. In response to the COVID-19 pandemic, Wisconsin declared a public health emergency and issued a shelter-in-place order, which has since been lifted. In March 2020, the PSCW issued two orders requiring certain actions to ensure that essential utility services were, and continue to be, available to our customers. The first order required all public utilities in the state of Wisconsin, including us, to temporarily suspend disconnections, the assessment of late fees, and deposit requirements for all customer classes. In addition, it required utilities to reconnect customers that were previously disconnected, offer deferred payment arrangements to all customers, and streamline the application process for customers applying for utility service. In the second order issued in March 2020, the PSCW authorized Wisconsin utilities to defer expenditures and certain foregone revenues resulting from compliance with the first order, and expenditures as otherwise incurred to ensure safe, reliable, and affordable access to utility services during the declared public health emergency. The PSCW has affirmed that this authorization for deferral includes the incremental increase in uncollectible expense above what is currently being recovered in rates. As we already have a cost recovery mechanism in place to recover uncollectible expense for residential customers, this new deferral only impacts the recovery of uncollectible expense for our commercial and industrial customers. See Note 3, Credit Losses, for information regarding changes to our allowance for credit losses. As of March 31, 2021, amounts deferred related to the COVID-19 pandemic were not significant. The PSCW will review the recoverability and examine the prudency of any deferred amounts in future rate proceedings. In June 2020, the PSCW issued a written order providing a timeline for the lifting of the temporary provisions required in the first March 2020 order. Utilities were allowed to disconnect commercial and industrial customers and require deposits for new service as of July 25, 2020 and July 31, 2020, respectively. After August 15, 2020, utilities were no longer required to offer deferred payment arrangements to all customers. Additionally, utilities were authorized to reinstate late fees except for the period between the first order and this supplemental order. We resumed charging late payment fees in late August 2020. Late payment fees were not charged on outstanding balances that were billed between the first order and late August 2020. Subsequent to the June 2020 order, the PSCW extended the moratorium on disconnections of residential customers until November 1, 2020. In accordance with Wisconsin regulations, utilities are generally not allowed to disconnect residential customers for non-payment during the winter moratorium, which began on November 1 and ended on April 15. Utilities were allowed to continue assessing late payment fees during the winter moratorium. On April 5, 2021, the PSCW issued a written order indicating that it would not extend the moratorium on disconnections further; therefore, utilities could begin disconnecting residential customers for non-payment after April 15, 2021. Utilities are required to offer a deferred payment arrangement to low-income residential customers prior to disconnecting service. The order also allows us to resume charging late payment fees on the full balance of all outstanding arrears, regardless of the associated dates the service was provided, after April 15, 2021. 2022 Rates On March 30, 2021, we filed an application with the PSCW for the approval of certain accounting treatments which, if approved, would allow us to maintain our current electric and natural gas base rates through 2022 and forego filing a rate case for one year. In connection with the request, we also entered into an agreement, dated March 23, 2021, with various stakeholders. Pursuant to the terms of the agreement, the stakeholders fully support the application, and we expect to file our next rate case by no later than May 1, 2022. The application filed with the PSCW includes the following key proposals: • We would amortize, in 2022, certain previously deferred balances to offset approximately half of our forecasted revenue deficiency. • We would be allowed to defer any increases in tax expense due to changes in tax law that occur in 2021 and/or 2022. • We would maintain our earnings sharing mechanism for 2022, with modification. The earnings sharing mechanism would be modified to authorize us to retain 100% of the first 15 basis points of earnings above our currently authorized ROE. This modification would expire on December 31, 2022. The earnings sharing mechanism would otherwise remain as currently authorized. We expect the PSCW to review and consider the application during the second quarter of 2021. 2020 and 2021 Rates In March 2019, we filed an application with the PSCW to increase our retail electric and natural gas rates, effective January 1, 2020. In August 2019, we filed an application with the PSCW for approval of a settlement agreement entered into with certain intervenors to resolve several outstanding issues in our rate case. In December 2019, the PSCW issued a written order that approved the settlement agreement without material modification and addressed the remaining outstanding issues that were not included in the settlement agreement. The new rates became effective January 1, 2020. The final order reflects the following: 2020 Effective rate increase Electric (1) (2) $ 15.8 million / 1.6% Gas (3) $ 4.3 million / 1.4% ROE 10.0% Common equity component average on a financial basis 52.5% (1) Amount is net of certain deferred tax benefits from the Tax Legislation that were utilized to reduce near-term rate impacts to our customers. The rate order reflects the majority of the unprotected deferred tax benefits from the Tax Legislation being amortized over two years. Approximately $11 million of tax benefits were amortized in 2020 and approximately $39 million are being amortized in 2021. Unprotected deferred tax benefits by their nature are eligible to be returned to customers in a manner and timeline determined to be appropriate by the PSCW. (2) The rate order is net of $21 million of refunds related to our 2018 earnings sharing mechanism. These refunds will be made to customers evenly over two years, with half returned in 2020 and the remainder being returned in 2021. (3) Amount is net of certain deferred tax benefits from the Tax Legislation that were utilized to reduce near-term rate impacts to our customers. The rate order reflects all of the unprotected deferred tax benefits from the Tax Legislation being amortized evenly over four years, which results in approximately $5 million of previously deferred tax benefits being amortized each year. Unprotected deferred tax benefits by their nature are eligible to be returned to customers in a manner and timeline determined to be appropriate by the PSCW. Our rate order allows us to collect the previously deferred revenue requirement for ReACT™ costs above the authorized $275.0 million level. The total cost of the ReACT™ project was $342 million. This regulatory asset will be collected from customers over eight years. We will continue having an earnings sharing mechanism through 2021. The earnings sharing mechanism was modified from its previous structure to one that is consistent with other Wisconsin investor-owned utilities. Under this earnings sharing mechanism, if we earn above our authorized ROE: (i) we retain 100.0% of earnings for the first 25 basis points above the authorized ROE; (ii) 50.0% of the next 50 basis points is refunded to customers; and (iii) 100.0% of any remaining excess earnings is refunded to customers. In addition, the rate order also requires us to maintain residential and small commercial electric and natural gas customer fixed charges at previously authorized rates and to maintain the status quo for our electric market-based rate programs for large industrial customers through 2021. |
NEW ACCOUNTING PRONOUCEMENTS
NEW ACCOUNTING PRONOUCEMENTS | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
NEW ACCOUNTING PRONOUNCEMENTS | NEW ACCOUNTING PRONOUNCEMENTS Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes. The new standard removes certain exceptions for performing intraperiod allocation and calculating income taxes in interim periods and also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. The guidance was effective for annual and interim periods beginning after December 15, 2020. The adoption of ASU 2019-12, effective January 1, 2021, did not have a significant impact on our financial statements and related disclosures. Reference Rate Reform In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments are effective for all entities as of March 12, 2020 through December 31, 2022. We are currently evaluating the impact this guidance may have on our financial statements and related disclosures. |
GENERAL INFORMATION (Policies)
GENERAL INFORMATION (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting policies | |
Basis of accounting | As used in these notes, the term "financial statements" refers to the condensed financial statements. This includes the income statements, balance sheets, statements of cash flows, and statements of equity, unless otherwise noted. In this report, when we refer to "the Company," "us," "we," "our," or "ours," we are referring to Wisconsin Public Service Corporation. We have prepared the unaudited interim financial statements presented in this Form 10-Q pursuant to the rules and regulations of the SEC and GAAP. Accordingly, these financial statements do not include all of the information and footnotes required by GAAP for annual financial statements. These financial statements should be read in conjunction with the financial statements and footnotes in our Annual Report on Form 10-K for the year ended December 31, 2020. Financial results for an interim period may not give a true indication of results for the year. In particular, the results of operations for the three months ended March 31, 2021 are not necessarily indicative of expected results for 2021 due to seasonal variations and other factors, including any continuing financial impacts from the COVID-19 pandemic. In management's opinion, we have included all adjustments, normal and recurring in nature, necessary for a fair presentation of our financial results. |
Credit losses | Our exposure to credit losses is related to our accounts receivable and unbilled revenue balances, which are generated from the sale of electricity and natural gas by our regulated utility operations. Our regulated utility operations are included in our utility segment. No accounts receivable and unbilled revenue balances were reported in the other segment at March 31, 2021 and December 31, 2020. We evaluate the collectability of our accounts receivable and unbilled revenue balances considering a combination of factors. For some of our larger customers and also in circumstances where we become aware of a specific customer's inability to meet its financial obligations to us, we record a specific allowance for credit losses against amounts due in order to reduce the net recognized |
Fair value measurement | Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Fair value accounting rules provide a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are defined as follows: Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 – Pricing inputs are observable, either directly or indirectly, but are not quoted prices included within Level 1. Level 2 includes those financial instruments that are valued using external inputs within models or other valuation methods. Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methods that result in management's best estimate of fair value. Level 3 instruments include those that may be more structured or otherwise tailored to customers' needs. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. We use a mid-market pricing convention (the mid-point price between bid and ask prices) as a practical measure for valuing certain derivative assets and liabilities. We primarily use a market approach for recurring fair value measurements and attempt to use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. When possible, we base the valuations of our derivative assets and liabilities on quoted prices for identical assets and liabilities in active markets. These valuations are classified in Level 1. The valuations of certain contracts not classified as Level 1 may be based on quoted market prices received from counterparties and/or observable inputs for similar instruments. Transactions valued using these inputs are classified in Level 2. Certain derivatives are categorized in Level 3 due to the significance of unobservable or internally-developed inputs. |
Derivative instruments | We use derivatives as part of our risk management program to manage the risks associated with the price volatility of purchased power, generation, and natural gas costs for the benefit of our customers. Our approach is non-speculative and designed to mitigate risk. Our regulated hedging programs are approved by the PSCW. We record derivative instruments on our balance sheets as an asset or liability measured at fair value unless they qualify for the normal purchases and sales exception and are so designated. We continually assess our contracts designated as normal and will discontinue the treatment of these contracts as normal if the required criteria are no longer met. Changes in the derivative's fair value are recognized currently in earnings unless specific hedge accounting criteria are met or we receive regulatory treatment for the derivative. For most energy-related physical and financial contracts in our regulated operations that qualify as derivatives, the PSCW allows the effects of fair value accounting to be offset to regulatory assets and liabilities. |
New accounting pronouncements | Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes. The new standard removes certain exceptions for performing intraperiod allocation and calculating income taxes in interim periods and also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. The guidance was effective for annual and interim periods beginning after December 15, 2020. The adoption of ASU 2019-12, effective January 1, 2021, did not have a significant impact on our financial statements and related disclosures. Reference Rate Reform In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments are effective for all entities as of March 12, 2020 through December 31, 2022. We are currently evaluating the impact this guidance may have on our financial statements and related disclosures. |
OPERATING REVENUES (Tables)
OPERATING REVENUES (Tables) - Utility segment | 3 Months Ended |
Mar. 31, 2021 | |
Disaggregation of Operating Revenues | |
Operating revenues disaggregated by revenue source | The following tables present our operating revenues disaggregated by revenue source for our utility segment. We do not have any revenues associated with our other segment. We disaggregate revenues into categories that depict how the nature, amount, timing, and uncertainty of revenues and cash flows are affected by economic factors. Revenues are further disaggregated by electric and natural gas operations and then by customer class. Each customer class within our electric and natural gas operations have different expectations of service, energy and demand requirements, and can be impacted differently by regulatory activities within their jurisdictions. Wisconsin Public Service Corporation Three Months Ended March 31 (in millions) 2021 2020 Electric utility $ 271.4 $ 271.3 Natural gas utility 132.3 96.9 Total revenues from contracts with customers 403.7 368.2 Other operating revenues 1.6 1.2 Total operating revenues $ 405.3 $ 369.4 |
Revenues from contracts with customers | Electric | |
Disaggregation of Operating Revenues | |
Operating revenues disaggregated by revenue source | The following table disaggregates electric utility operating revenues into customer class: Electric Utility Operating Revenues Three Months Ended March 31 (in millions) 2021 2020 Residential $ 101.9 $ 101.1 Small commercial and industrial 84.1 83.3 Large commercial and industrial 55.2 51.2 Other 2.1 2.1 Total retail revenues 243.3 237.7 Wholesale 18.9 22.4 Resale 5.9 5.3 Other utility revenues 3.3 5.9 Total electric utility operating revenues $ 271.4 $ 271.3 |
Revenues from contracts with customers | Natural gas | |
Disaggregation of Operating Revenues | |
Operating revenues disaggregated by revenue source | The following table disaggregates natural gas utility operating revenues into customer class: Natural Gas Utility Operating Revenues Three Months Ended March 31 (in millions) 2021 2020 Residential $ 67.3 $ 58.4 Commercial and industrial 38.7 33.1 Total retail revenues 106.0 91.5 Transportation 5.8 6.0 Other utility revenues (1) 20.5 (0.6) Total natural gas utility operating revenues $ 132.3 $ 96.9 (1) Includes revenues subject to collection from (refund to) customers for purchased gas adjustment costs. The increase primarily relates to the high natural gas costs that were incurred as a result of the extreme winter weather conditions in February 2021. See Note 17, Regulatory Environment, for more information. |
Other operating revenues | |
Disaggregation of Operating Revenues | |
Operating revenues disaggregated by revenue source | Other operating revenues consist primarily of the following: Three Months Ended March 31 (in millions) 2021 2020 Late payment charges $ 1.1 $ 1.0 Alternative revenues 0.5 0.2 Total other operating revenues $ 1.6 $ 1.2 |
CREDIT LOSSES (Tables)
CREDIT LOSSES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Credit Loss [Abstract] | |
Schedule of gross receivables and related allowances for credit losses | We have included a table below that shows our gross third-party receivable balances and related allowance for credit losses. (in millions) March 31, 2021 December 31, 2020 Accounts receivable and unbilled revenues $ 208.5 $ 209.1 Allowance for credit losses 17.5 18.3 Accounts receivable and unbilled revenues, net (1) $ 191.0 $ 190.8 Total accounts receivable, net – past due greater than 90 days (1) $ 10.8 $ 12.6 Past due greater than 90 days – collection risk mitigated by regulatory mechanisms (1) 96.1 % 94.4 % |
Rollforward of the allowances for credit losses | A rollforward of the allowance for credit losses for the three months ended March 31, 2021 and 2020 is included below: Three Months Ended (in millions) March 31, 2021 March 31, 2020 Balance at December 31 $ 18.3 $ 4.2 Provision for credit losses 0.4 3.2 Provision for credit losses deferred for future recovery or refund (0.1) 3.1 Write-offs charged against the allowance (2.1) (2.7) Recoveries of amounts previously written off 1.0 1.0 Balance at March 31 $ 17.5 $ 8.8 |
REGULATORY ASSETS AND LIABILI_2
REGULATORY ASSETS AND LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Regulatory Assets and Liabilities Disclosure [Abstract] | |
Schedule of regulatory assets | (in millions) March 31, 2021 December 31, 2020 Regulatory assets Pension and OPEB costs $ 155.6 $ 161.4 Environmental remediation costs 115.3 116.1 Plant retirements 56.8 58.5 Income tax related items 50.3 46.7 ReACT™ 17.5 18.2 Energy costs recoverable through rate adjustments (1) 16.8 — Asset retirement obligations 13.5 13.1 Uncollectible expense 12.4 12.5 Forward Wind Energy Center 8.4 10.3 Other, net 11.7 12.6 Total regulatory assets $ 458.3 $ 449.4 Balance sheet presentation Other current assets (1) $ 16.8 $ — Regulatory assets 441.5 449.4 Total regulatory assets $ 458.3 $ 449.4 (1) The increase in these regulatory assets primarily relates to the high natural gas costs that were incurred as a result of the extreme winter weather conditions in February 2021. See Note 17, Regulatory Environment, for more information. |
Schedule of regulatory liabilities | (in millions) March 31, 2021 December 31, 2020 Regulatory liabilities Income tax related items $ 386.7 $ 397.0 Removal costs 194.4 193.7 Pension and OPEB benefits 115.5 115.9 Earnings sharing mechanism 30.7 36.8 Electric transmission costs 16.6 16.8 Energy costs refundable through rate adjustments 10.6 9.7 Other, net 6.5 6.3 Total regulatory liabilities $ 761.0 $ 776.2 Balance sheet presentation Other current liabilities $ 0.1 $ 3.6 Regulatory liabilities 760.9 772.6 Total regulatory liabilities $ 761.0 $ 776.2 |
SHORT-TERM DEBT AND LINES OF _2
SHORT-TERM DEBT AND LINES OF CREDIT (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Short-term Debt [Abstract] | |
Schedule of short-term borrowings and weighted-average interest rates | The following table shows our short-term borrowings and their corresponding weighted-average interest rates: (in millions, except percentages) March 31, 2021 December 31, 2020 Commercial paper Amount outstanding $ 200.5 $ 210.5 Weighted-average interest rate on amounts outstanding 0.16 % 0.18 % |
Schedule of revolving credit facility and remaining available capacity | The information in the table below relates to our revolving credit facility used to support our commercial paper borrowing program, including available capacity under this facility: (in millions) Maturity March 31, 2021 Revolving credit facility October 2022 $ 400.0 Less: Letters of credit issued inside credit facility $ 1.3 Commercial paper outstanding 200.5 Available capacity under existing credit facility $ 198.2 |
MATERIALS, SUPPLIES, AND INVE_2
MATERIALS, SUPPLIES, AND INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Our inventory consisted of: (in millions) March 31, 2021 December 31, 2020 Materials and supplies $ 47.9 $ 45.8 Fossil fuel 22.7 28.0 Natural gas in storage 5.8 18.9 Total $ 76.4 $ 92.7 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of effective income tax rate reconciliation | The provision for income taxes differs from the amount of income tax determined by applying the applicable United States statutory federal income tax rate to income before income taxes as a result of the following: Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 (in millions) Amount Effective Tax Rate Amount Effective Tax Rate Statutory federal income tax $ 16.4 21.0 % $ 17.8 21.0 % State income taxes net of federal tax benefit 4.9 6.3 % 5.2 6.1 % Federal excess deferred tax amortization – Wisconsin unprotected (10.5) (13.4) % (4.0) (4.7) % Federal excess deferred tax amortization (1.6) (2.1) % (1.6) (1.9) % Other (0.5) (0.6) % (0.7) (0.8) % Total income tax expense $ 8.7 11.2 % $ 16.7 19.7 % |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of assets and liabilities measured on a recurring basis categorized by level within the fair value hierarchy | The following tables summarize our financial assets and liabilities that were accounted for at fair value on a recurring basis, categorized by level within the fair value hierarchy: March 31, 2021 (in millions) Level 1 Level 2 Level 3 Total Derivative assets Natural gas contracts $ 1.6 $ 0.6 $ — $ 2.2 FTRs — — 0.4 0.4 Coal contracts — 0.5 — 0.5 Total derivative assets $ 1.6 $ 1.1 $ 0.4 $ 3.1 Derivative liabilities Natural gas contracts $ 0.6 $ 0.1 $ — $ 0.7 Coal contracts — 0.3 — 0.3 Total derivative liabilities $ 0.6 $ 0.4 $ — $ 1.0 December 31, 2020 (in millions) Level 1 Level 2 Level 3 Total Derivative assets Natural gas contracts $ 1.6 $ 0.1 $ — $ 1.7 FTRs — — 1.2 1.2 Coal contracts — 0.4 — 0.4 Total derivative assets $ 1.6 $ 0.5 $ 1.2 $ 3.3 Derivative liabilities Natural gas contracts $ 1.6 $ 0.3 $ — $ 1.9 Coal contracts — 0.5 — 0.5 Total derivative liabilities $ 1.6 $ 0.8 $ — $ 2.4 |
Reconciliation of changes in the fair value of items categorized as level 3 measurements | The following table summarizes the changes to derivatives classified as Level 3 in the fair value hierarchy: Three Months Ended March 31 (in millions) 2021 2020 Balance at the beginning of the period $ 1.2 $ 1.3 Purchases 0.1 — Settlements (0.9) (0.8) Balance at the end of the period $ 0.4 $ 0.5 |
Schedule of carrying value and estimated fair value of financial instruments not recorded at fair value | The following table shows the financial instruments included on our balance sheets that were not recorded at fair value: March 31, 2021 December 31, 2020 (in millions) Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt, including current portion (1) $ 1,613.9 $ 1,779.9 $ 1,613.5 $ 1,935.9 (1) The carrying amount of long-term debt excludes finance lease obligations of $33.2 million and $31.3 million at March 31, 2021 and December 31, 2020, respectively. |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivative assets and liabilities | The following table shows our derivative assets and derivative liabilities, along with their classification on our balance sheets. None of our derivatives are designated as hedging instruments. March 31, 2021 December 31, 2020 (in millions) Derivative Assets Derivative Liabilities Derivative Assets Derivative Liabilities Other current Natural gas contracts $ 2.2 $ 0.6 $ 1.7 $ 1.7 FTRs 0.4 — 1.2 — Coal contracts 0.2 0.2 0.2 0.3 Total other current (1) 2.8 0.8 3.1 2.0 Other long-term Natural gas contracts — 0.1 — 0.2 Coal contracts 0.3 0.1 0.2 0.2 Total other long-term (1) 0.3 0.2 0.2 0.4 Total $ 3.1 $ 1.0 $ 3.3 $ 2.4 (1) On our balance sheets, we classify derivative assets and liabilities as other current or other long-term based on the maturities of the underlying contracts. |
Schedule of estimated notional volumes and realized gains (losses) | Our estimated notional sales volumes and realized gains (losses) were as follows: Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 (in millions) Volumes Gains (Losses) Volumes Gains (Losses) Natural gas contracts 13.6 Dth $ (1.7) 12.7 Dth $ (4.4) FTRs 2.7 MWh 0.9 1.9 MWh 0.4 Total $ (0.8) $ (4.0) |
Schedule of net derivative instruments | The following table shows derivative assets and derivative liabilities if derivative instruments by counterparty were presented net on our balance sheets: March 31, 2021 December 31, 2020 (in millions) Derivative Assets Derivative Liabilities Derivative Assets Derivative Liabilities Gross amount recognized on the balance sheet $ 3.1 $ 1.0 $ 3.3 $ 2.4 Gross amount not offset on the balance sheet (0.6) (0.6) (1.6) (1.6) Net amount $ 2.5 $ 0.4 $ 1.7 $ 0.8 |
EMPLOYEE BENEFITS (Tables)
EMPLOYEE BENEFITS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
Schedule of net benefit cost (credit) | The following tables show the components of net periodic benefit cost (credit) for our benefit plans. Pension Benefits Three Months Ended March 31 (in millions) 2021 2020 Service cost $ 3.0 $ 2.6 Interest cost 5.5 6.2 Expected return on plan assets (12.9) (12.1) Amortization of net actuarial loss 6.9 5.8 Net periodic benefit cost $ 2.5 $ 2.5 OPEB Benefits Three Months Ended March 31 (in millions) 2021 2020 Service cost $ 1.2 $ 1.2 Interest cost 1.0 1.3 Expected return on plan assets (5.0) (4.6) Amortization of prior service credit (2.6) (2.6) Amortization of net actuarial (gain) loss (0.5) (0.3) Net periodic benefit credit $ (5.9) $ (5.0) |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of information related to reportable segments | The following tables show summarized financial information for the three months ended March 31, 2021 and 2020, related to our reportable segments: (in millions) Utility Other Wisconsin Public Service Corporation Three Months Ended March 31, 2021 Operating revenues $ 405.3 $ — $ 405.3 Other operation and maintenance 95.4 — 95.4 Depreciation and amortization 46.0 — 46.0 Other income, net 8.2 0.4 8.6 Interest expense 16.2 — 16.2 Income tax expense 8.6 0.1 8.7 Net income 69.0 0.3 69.3 (in millions) Utility Other Wisconsin Public Service Corporation Three Months Ended March 31, 2020 Operating revenues $ 369.4 $ — $ 369.4 Other operation and maintenance 91.8 — 91.8 Depreciation and amortization 43.0 — 43.0 Other income, net 7.9 0.4 8.3 Interest expense 16.3 — 16.3 Income tax expense 16.6 0.1 16.7 Net income 67.9 0.3 68.2 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of regulatory assets and reserves related to manufactured gas plant sites | We have established the following regulatory assets and reserves for manufactured gas plant sites: (in millions) March 31, 2021 December 31, 2020 Regulatory assets $ 115.3 $ 116.1 Reserves for future environmental remediation 88.3 88.3 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of supplemental cash flow information | Three Months Ended March 31 (in millions) 2021 2020 Cash paid for interest, net of amount capitalized $ 4.3 $ 4.9 Significant non-cash investing and financing transactions: Accounts payable related to construction costs 11.6 17.6 |
REGULATORY ENVIRONMENT (Tables)
REGULATORY ENVIRONMENT (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Regulated Operations [Abstract] | |
Schedule of decisions in regulatory order | The final order reflects the following: 2020 Effective rate increase Electric (1) (2) $ 15.8 million / 1.6% Gas (3) $ 4.3 million / 1.4% ROE 10.0% Common equity component average on a financial basis 52.5% (1) Amount is net of certain deferred tax benefits from the Tax Legislation that were utilized to reduce near-term rate impacts to our customers. The rate order reflects the majority of the unprotected deferred tax benefits from the Tax Legislation being amortized over two years. Approximately $11 million of tax benefits were amortized in 2020 and approximately $39 million are being amortized in 2021. Unprotected deferred tax benefits by their nature are eligible to be returned to customers in a manner and timeline determined to be appropriate by the PSCW. (2) The rate order is net of $21 million of refunds related to our 2018 earnings sharing mechanism. These refunds will be made to customers evenly over two years, with half returned in 2020 and the remainder being returned in 2021. (3) Amount is net of certain deferred tax benefits from the Tax Legislation that were utilized to reduce near-term rate impacts to our customers. The rate order reflects all of the unprotected deferred tax benefits from the Tax Legislation being amortized evenly over four years, which results in approximately $5 million of previously deferred tax benefits being amortized each year. Unprotected deferred tax benefits by their nature are eligible to be returned to customers in a manner and timeline determined to be appropriate by the PSCW. |
GENERAL INFORMATION - GENERAL (
GENERAL INFORMATION - GENERAL (Details) | Mar. 31, 2021customer |
Electric | |
Product Information [Line Items] | |
Number Of Customers | 454,300 |
Natural gas | |
Product Information [Line Items] | |
Number Of Customers | 336,500 |
OPERATING REVENUES - DISAGGREGA
OPERATING REVENUES - DISAGGREGATION OF OPERATING REVENUES FOR UTILITY SEGMENT (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Operating Revenues | ||
Total operating revenues | $ 405.3 | $ 369.4 |
Utility segment | ||
Disaggregation of Operating Revenues | ||
Total operating revenues | 405.3 | 369.4 |
Utility segment | Other operating revenues | ||
Disaggregation of Operating Revenues | ||
Other operating revenues | 1.6 | 1.2 |
Utility segment | Transferred over time | Revenues from contracts with customers | ||
Disaggregation of Operating Revenues | ||
Revenues from contracts with customers | 403.7 | 368.2 |
Utility segment | Electric | Transferred over time | Revenues from contracts with customers | ||
Disaggregation of Operating Revenues | ||
Revenues from contracts with customers | 271.4 | 271.3 |
Utility segment | Natural gas | Transferred over time | Revenues from contracts with customers | ||
Disaggregation of Operating Revenues | ||
Revenues from contracts with customers | $ 132.3 | $ 96.9 |
OPERATING REVENUES - DISAGGRE_2
OPERATING REVENUES - DISAGGREGATION OF ELECTRIC UTILITY OPERATING REVENUES BY CUSTOMER CLASS (Details) - Revenues from contracts with customers - Utility segment - Transferred over time - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Operating Revenues | ||
Revenues from contracts with customers | $ 403.7 | $ 368.2 |
Electric | ||
Disaggregation of Operating Revenues | ||
Revenues from contracts with customers | 271.4 | 271.3 |
Electric | Total retail | ||
Disaggregation of Operating Revenues | ||
Revenues from contracts with customers | 243.3 | 237.7 |
Electric | Residential | ||
Disaggregation of Operating Revenues | ||
Revenues from contracts with customers | 101.9 | 101.1 |
Electric | Small commercial and industrial | ||
Disaggregation of Operating Revenues | ||
Revenues from contracts with customers | 84.1 | 83.3 |
Electric | Large commercial and industrial customers | ||
Disaggregation of Operating Revenues | ||
Revenues from contracts with customers | 55.2 | 51.2 |
Electric | Other | ||
Disaggregation of Operating Revenues | ||
Revenues from contracts with customers | 2.1 | 2.1 |
Electric | Wholesale | ||
Disaggregation of Operating Revenues | ||
Revenues from contracts with customers | 18.9 | 22.4 |
Electric | Resale | ||
Disaggregation of Operating Revenues | ||
Revenues from contracts with customers | 5.9 | 5.3 |
Electric | Other utility | ||
Disaggregation of Operating Revenues | ||
Revenues from contracts with customers | $ 3.3 | $ 5.9 |
OPERATING REVENUES - DISAGGRE_3
OPERATING REVENUES - DISAGGREGATION OF NATURAL GAS UTILITY OPERATING REVENUES BY CUSTOMER CLASS (Details) - Revenues from contracts with customers - Utility segment - Transferred over time - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Operating Revenues | ||
Revenues from contracts with customers | $ 403.7 | $ 368.2 |
Natural gas | ||
Disaggregation of Operating Revenues | ||
Revenues from contracts with customers | 132.3 | 96.9 |
Natural gas | Total retail | ||
Disaggregation of Operating Revenues | ||
Revenues from contracts with customers | 106 | 91.5 |
Natural gas | Residential | ||
Disaggregation of Operating Revenues | ||
Revenues from contracts with customers | 67.3 | 58.4 |
Natural gas | Commercial and industrial | ||
Disaggregation of Operating Revenues | ||
Revenues from contracts with customers | 38.7 | 33.1 |
Natural gas | Transportation | ||
Disaggregation of Operating Revenues | ||
Revenues from contracts with customers | 5.8 | 6 |
Natural gas | Other utility | ||
Disaggregation of Operating Revenues | ||
Revenues from contracts with customers | $ 20.5 | $ (0.6) |
OPERATING REVENUES OTHER OPERAT
OPERATING REVENUES OTHER OPERATING REVENUES (Details) - Utility segment - Other operating revenues - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Operating Revenues | ||
Other operating revenues | $ 1.6 | $ 1.2 |
Late payment charges | ||
Disaggregation of Operating Revenues | ||
Other operating revenues | 1.1 | 1 |
Alternative revenues | ||
Disaggregation of Operating Revenues | ||
Other operating revenues | $ 0.5 | $ 0.2 |
CREDIT LOSSES - GROSS RECEIVABL
CREDIT LOSSES - GROSS RECEIVABLES AND RELATED ALLOWANCES (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Utility segment | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accounts receivable and unbilled revenues | $ 208.5 | $ 209.1 | ||
Allowance for credit losses | 17.5 | 18.3 | $ 8.8 | $ 4.2 |
Accounts receivable and unbilled revenues, net | 191 | 190.8 | ||
Total accounts receivable, net - past due greater than 90 days | $ 10.8 | $ 12.6 | ||
Past due greater than 90 days - collection risk mitigated by regulatory mechanisms | 96.10% | 94.40% | ||
Amount of net accounts receivable with regulatory protections | $ 82.3 | |||
Percent of net accounts receivable with regulatory protections | 43.10% | |||
Other | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accounts receivable and unbilled revenues | $ 0 | $ 0 |
CREDIT LOSSES - ROLLFORWARD OF
CREDIT LOSSES - ROLLFORWARD OF ALLOWANCES (Details) - Utility segment - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance at December 31 | $ 18.3 | $ 4.2 |
Provision for credit losses | 0.4 | 3.2 |
Write-offs charged against the allowance | (2.1) | (2.7) |
Recovery of amounts previously written off | 1 | 1 |
Balance at March 31 | 17.5 | 8.8 |
Uncollectible expense | ||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Provision for credit losses deferred for future recovery or refund | $ (0.1) | $ 3.1 |
REGULATORY ASSETS AND LIABILI_3
REGULATORY ASSETS AND LIABILITIES - REGULATORY ASSETS (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Regulatory assets | ||
Other current assets | $ 16.8 | $ 0 |
Regulatory assets | 441.5 | 449.4 |
Total regulatory assets | 458.3 | 449.4 |
Pension and OPEB costs | ||
Regulatory assets | ||
Total regulatory assets | 155.6 | 161.4 |
Environmental remediation costs | ||
Regulatory assets | ||
Total regulatory assets | 115.3 | 116.1 |
Plant retirements | ||
Regulatory assets | ||
Total regulatory assets | 56.8 | 58.5 |
Income tax related items | ||
Regulatory assets | ||
Total regulatory assets | 50.3 | 46.7 |
ReACT | ||
Regulatory assets | ||
Total regulatory assets | 17.5 | 18.2 |
Energy costs recoverable through rate adjustments | ||
Regulatory assets | ||
Total regulatory assets | 16.8 | 0 |
Asset retirement obligations | ||
Regulatory assets | ||
Total regulatory assets | 13.5 | 13.1 |
Uncollectible expense | ||
Regulatory assets | ||
Total regulatory assets | 12.4 | 12.5 |
Forward Wind Energy Center | ||
Regulatory assets | ||
Total regulatory assets | 8.4 | 10.3 |
Other, net | ||
Regulatory assets | ||
Total regulatory assets | $ 11.7 | $ 12.6 |
REGULATORY ASSETS AND LIABILI_4
REGULATORY ASSETS AND LIABILITIES - REGULATORY LIABILITIES (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Regulatory liabilities | ||
Other current liabilities | $ 0.1 | $ 3.6 |
Regulatory liabilities | 760.9 | 772.6 |
Total regulatory liabilities | 761 | 776.2 |
Income tax related items | ||
Regulatory liabilities | ||
Total regulatory liabilities | 386.7 | 397 |
Removal costs | ||
Regulatory liabilities | ||
Total regulatory liabilities | 194.4 | 193.7 |
Pension and OPEB benefits | ||
Regulatory liabilities | ||
Total regulatory liabilities | 115.5 | 115.9 |
Earnings sharing mechanism | ||
Regulatory liabilities | ||
Total regulatory liabilities | 30.7 | 36.8 |
Electric transmission costs | ||
Regulatory liabilities | ||
Total regulatory liabilities | 16.6 | 16.8 |
Energy costs refundable through rate adjustments | ||
Regulatory liabilities | ||
Total regulatory liabilities | 10.6 | 9.7 |
Other, net | ||
Regulatory liabilities | ||
Total regulatory liabilities | $ 6.5 | $ 6.3 |
SHORT-TERM DEBT AND LINES OF _3
SHORT-TERM DEBT AND LINES OF CREDIT - SHORT-TERM BORROWINGS (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Short-term borrowings | ||
Commercial paper outstanding | $ 200.5 | $ 210.5 |
Commercial paper | ||
Short-term borrowings | ||
Commercial paper outstanding | $ 200.5 | $ 210.5 |
Weighted-average interest rate on amounts outstanding | 0.16% | 0.18% |
Average amount outstanding during the period | $ 207.3 | |
Weighted-average interest rate during the period | 0.16% |
SHORT-TERM DEBT AND LINES OF _4
SHORT-TERM DEBT AND LINES OF CREDIT - REVOLVING CREDIT FACILITIES (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Revolving credit facility | ||
Commercial paper outstanding | $ 200.5 | $ 210.5 |
Available capacity under existing credit facility | 198.2 | |
Revolving credit facility maturing October 2022 | ||
Revolving credit facility | ||
Revolving credit facility | 400 | |
Commercial paper | ||
Revolving credit facility | ||
Commercial paper outstanding | 200.5 | $ 210.5 |
Letter of credit | ||
Revolving credit facility | ||
Letters of credit issued inside credit facility | $ 1.3 |
MATERIALS, SUPPLIES, AND INVE_3
MATERIALS, SUPPLIES, AND INVENTORIES (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Materials and supplies | $ 47.9 | $ 45.8 |
Fossil fuel | 22.7 | 28 |
Natural gas in storage | 5.8 | 18.9 |
Total | $ 76.4 | $ 92.7 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Effective Income Tax Rate Reconciliation, Amount | ||
Statutory federal income tax, amount | $ 16.4 | $ 17.8 |
State income taxes net of federal tax benefit,amount | 4.9 | 5.2 |
Federal excess deferred tax amortization - Wisconsin unprotected, amount | (10.5) | (4) |
Federal excess deferred tax amortization, amount | (1.6) | (1.6) |
Other, amount | (0.5) | (0.7) |
Total income tax expense | $ 8.7 | $ 16.7 |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||
Statutory federal income tax, percent | 21.00% | 21.00% |
State income taxes net of federal tax benefit, percent | 6.30% | 6.10% |
Federal excess deferred tax amortization - WI Unprotected, percent | (13.40%) | (4.70%) |
Federal excess deferred tax amortization, percent | (2.10%) | (1.90%) |
Other, percent | (0.60%) | (0.80%) |
Total income tax expense, percent | 11.20% | 19.70% |
INCOME TAXES - WI 2020 AND 2021
INCOME TAXES - WI 2020 AND 2021 RATES (Details) - Public Service Commission of Wisconsin (PSCW) - 2020 and 2021 rates - Tax Cuts and Jobs Act of 2017 | 1 Months Ended |
Dec. 31, 2019 | |
Electric rates | |
Income Taxes [Line Items] | |
Amortization period | 2 years |
Natural gas rates | |
Income Taxes [Line Items] | |
Amortization period | 4 years |
FAIR VALUE MEASUREMENTS - ASSET
FAIR VALUE MEASUREMENTS - ASSETS AND LIABILITIES MEASURED ON A RECURRING BASIS (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Derivative assets | $ 3.1 | $ 3.3 |
Liabilities | ||
Derivative liabilities | 1 | 2.4 |
Fair value measurements on a recurring basis | ||
Assets | ||
Derivative assets | 3.1 | 3.3 |
Liabilities | ||
Derivative liabilities | 1 | 2.4 |
Fair value measurements on a recurring basis | Level 1 | ||
Assets | ||
Derivative assets | 1.6 | 1.6 |
Liabilities | ||
Derivative liabilities | 0.6 | 1.6 |
Fair value measurements on a recurring basis | Level 2 | ||
Assets | ||
Derivative assets | 1.1 | 0.5 |
Liabilities | ||
Derivative liabilities | 0.4 | 0.8 |
Fair value measurements on a recurring basis | Level 3 | ||
Assets | ||
Derivative assets | 0.4 | 1.2 |
Liabilities | ||
Derivative liabilities | 0 | 0 |
Fair value measurements on a recurring basis | Natural gas contracts | ||
Assets | ||
Derivative assets | 2.2 | 1.7 |
Liabilities | ||
Derivative liabilities | 0.7 | 1.9 |
Fair value measurements on a recurring basis | Natural gas contracts | Level 1 | ||
Assets | ||
Derivative assets | 1.6 | 1.6 |
Liabilities | ||
Derivative liabilities | 0.6 | 1.6 |
Fair value measurements on a recurring basis | Natural gas contracts | Level 2 | ||
Assets | ||
Derivative assets | 0.6 | 0.1 |
Liabilities | ||
Derivative liabilities | 0.1 | 0.3 |
Fair value measurements on a recurring basis | Natural gas contracts | Level 3 | ||
Assets | ||
Derivative assets | 0 | 0 |
Liabilities | ||
Derivative liabilities | 0 | 0 |
Fair value measurements on a recurring basis | FTRs | ||
Assets | ||
Derivative assets | 0.4 | 1.2 |
Fair value measurements on a recurring basis | FTRs | Level 1 | ||
Assets | ||
Derivative assets | 0 | 0 |
Fair value measurements on a recurring basis | FTRs | Level 2 | ||
Assets | ||
Derivative assets | 0 | 0 |
Fair value measurements on a recurring basis | FTRs | Level 3 | ||
Assets | ||
Derivative assets | 0.4 | 1.2 |
Fair value measurements on a recurring basis | Coal contracts | ||
Assets | ||
Derivative assets | 0.5 | 0.4 |
Liabilities | ||
Derivative liabilities | 0.3 | 0.5 |
Fair value measurements on a recurring basis | Coal contracts | Level 1 | ||
Assets | ||
Derivative assets | 0 | 0 |
Liabilities | ||
Derivative liabilities | 0 | 0 |
Fair value measurements on a recurring basis | Coal contracts | Level 2 | ||
Assets | ||
Derivative assets | 0.5 | 0.4 |
Liabilities | ||
Derivative liabilities | 0.3 | 0.5 |
Fair value measurements on a recurring basis | Coal contracts | Level 3 | ||
Assets | ||
Derivative assets | 0 | 0 |
Liabilities | ||
Derivative liabilities | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - LEVEL
FAIR VALUE MEASUREMENTS - LEVEL 3 RECONCILIATION (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Level 3 rollforward | ||
Balance at the beginning of the period | $ 1.2 | $ 1.3 |
Purchases | 0.1 | 0 |
Settlements | (0.9) | (0.8) |
Balance at the end of the period | $ 0.4 | $ 0.5 |
FAIR VALUE MEASUREMENTS - FINAN
FAIR VALUE MEASUREMENTS - FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Carrying amount | ||
Financial instruments | ||
Long-term debt | $ 1,613.9 | $ 1,613.5 |
Finance lease obligations | 33.2 | 31.3 |
Fair value | ||
Financial instruments | ||
Long-term debt | $ 1,779.9 | $ 1,935.9 |
DERIVATIVE INSTRUMENTS - DERIVA
DERIVATIVE INSTRUMENTS - DERIVATIVE ASSETS AND LIABILITIES (Details) $ in Millions | Mar. 31, 2021USD ($)Instruments | Dec. 31, 2020USD ($) |
Derivative assets | ||
Other current derivative assets | $ 2.8 | $ 3.1 |
Other long-term derivative assets | 0.3 | 0.2 |
Total derivative assets | 3.1 | 3.3 |
Derivative liabilities | ||
Other current derivative liabilities | 0.8 | 2 |
Other long-term derivative liabilities | 0.2 | 0.4 |
Total derivative liabilities | 1 | 2.4 |
Natural gas contracts | ||
Derivative assets | ||
Other current derivative assets | 2.2 | 1.7 |
Other long-term derivative assets | 0 | 0 |
Derivative liabilities | ||
Other current derivative liabilities | 0.6 | 1.7 |
Other long-term derivative liabilities | 0.1 | 0.2 |
FTRs | ||
Derivative assets | ||
Other current derivative assets | 0.4 | 1.2 |
Derivative liabilities | ||
Other current derivative liabilities | 0 | 0 |
Coal contracts | ||
Derivative assets | ||
Other current derivative assets | 0.2 | 0.2 |
Other long-term derivative assets | 0.3 | 0.2 |
Derivative liabilities | ||
Other current derivative liabilities | 0.2 | 0.3 |
Other long-term derivative liabilities | $ 0.1 | $ 0.2 |
Derivatives designated as hedging instruments | ||
Derivative instruments | ||
Number of derivative instruments | Instruments | 0 |
DERIVATIVE INSTRUMENTS - GAINS
DERIVATIVE INSTRUMENTS - GAINS (LOSSES) AND NOTIONAL VOLUMES (Details) MWh in Millions, MMBTU in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2021USD ($)MWhMMBTU | Mar. 31, 2020USD ($)MMBTUMWh | |
Realized gains (losses) | ||
Gains (losses) | $ (0.8) | $ (4) |
Natural gas contracts | ||
Realized gains (losses) | ||
Gains (losses) | $ (1.7) | $ (4.4) |
Notional sales volumes | ||
Notional sales volumes | MMBTU | 13.6 | 12.7 |
FTRs | ||
Realized gains (losses) | ||
Gains (losses) | $ 0.9 | $ 0.4 |
Notional sales volumes | ||
Notional sales volumes | MWh | 2.7 | 1.9 |
DERIVATIVE INSTRUMENTS - BALANC
DERIVATIVE INSTRUMENTS - BALANCE SHEET OFFSETTING (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Cash collateral | ||
Cash collateral posted in margin accounts | $ 1.3 | $ 3.7 |
Offsetting derivative assets | ||
Gross amount recognized on the balance sheet | 3.1 | 3.3 |
Gross amount not offset on the balance sheet | (0.6) | (1.6) |
Net amount | 2.5 | 1.7 |
Offsetting derivative liabilities | ||
Gross amount recognized on balance sheet | 1 | 2.4 |
Gross amount not offset on balance sheet | (0.6) | (1.6) |
Net amount | $ 0.4 | $ 0.8 |
GUARANTEES (Details)
GUARANTEES (Details) $ in Millions | Mar. 31, 2021USD ($) |
Standby letters of credit | |
Guarantees | |
Guarantees with expiration over 3 years | $ 20.6 |
EMPLOYEE BENEFITS-COSTS AND CON
EMPLOYEE BENEFITS-COSTS AND CONTRIBUTIONS (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Pension Benefits | ||
Components of net periodic benefit cost | ||
Service cost | $ 3 | $ 2.6 |
Interest cost | 5.5 | 6.2 |
Expected return on plan assets | (12.9) | (12.1) |
Amortization of net actuarial (gain) loss | 6.9 | 5.8 |
Net periodic benefit (credit) cost | 2.5 | 2.5 |
Contributions and payments related to pension and OPEB plans | 0.2 | |
Defined Benefit Plan, Expected Future Benefit Payment, Remainder of Fiscal Year | 0.5 | |
Other Postretirement Benefits | ||
Components of net periodic benefit cost | ||
Service cost | 1.2 | 1.2 |
Interest cost | 1 | 1.3 |
Expected return on plan assets | (5) | (4.6) |
Amortization of prior service credit | (2.6) | (2.6) |
Amortization of net actuarial (gain) loss | (0.5) | (0.3) |
Net periodic benefit (credit) cost | (5.9) | $ (5) |
Contributions and payments related to pension and OPEB plans | 0.3 | |
Defined Benefit Plan, Expected Future Benefit Payment, Remainder of Fiscal Year | $ 0.6 |
GOODWILL (Details)
GOODWILL (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes to the carrying amount of goodwill | $ 0 |
Accumulated impairment loss | $ 0 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2021USD ($)segment | Mar. 31, 2020USD ($) | |
Segment Reporting [Abstract] | ||
Number of reportable segments | segment | 2 | |
Segment reporting information | ||
Operating revenues | $ 405.3 | $ 369.4 |
Other operation and maintenance | 95.4 | 91.8 |
Depreciation and amortization | 46 | 43 |
Other income, net | 8.6 | 8.3 |
Interest expense | 16.2 | 16.3 |
Income tax expense | 8.7 | 16.7 |
Net income | 69.3 | 68.2 |
Utility | ||
Segment reporting information | ||
Operating revenues | 405.3 | 369.4 |
Other operation and maintenance | 95.4 | 91.8 |
Depreciation and amortization | 46 | 43 |
Other income, net | 8.2 | 7.9 |
Interest expense | 16.2 | 16.3 |
Income tax expense | 8.6 | 16.6 |
Net income | 69 | 67.9 |
Other | ||
Segment reporting information | ||
Operating revenues | 0 | 0 |
Other operation and maintenance | 0 | 0 |
Depreciation and amortization | 0 | 0 |
Other income, net | 0.4 | 0.4 |
Interest expense | 0 | 0 |
Income tax expense | 0.1 | 0.1 |
Net income | $ 0.3 | $ 0.3 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - UNCONDITIONAL PURCHASE OBLIGATIONS (Details) $ in Billions | Mar. 31, 2021USD ($) |
Minimum future commitments for purchase obligations | |
Purchase obligations | $ 0.8 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - ENVIRONMENTAL MATTERS (Details) T in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | 15 Months Ended |
Mar. 31, 2021USD ($)Statesperformance_obligationscompliance_optionMW | Dec. 31, 2020USD ($)T | Mar. 31, 2019MW | |
Manufactured gas plant remediation | |||
Regulatory assets | $ 458.3 | $ 449.4 | |
Environmental remediation costs | |||
Manufactured gas plant remediation | |||
Regulatory assets | $ 115.3 | $ 116.1 | |
National Ambient Air Quality Standards | Electric | |||
Air quality | |||
Number of changes to the 2015 ozone standards | performance_obligations | 0 | ||
Number of revisions necessary to the 2012 standard for particulate matter | performance_obligations | 0 | ||
Climate Change | Electric | |||
Air quality | |||
Number of rules that regulate GHG emissions from electric generating units | compliance_option | 0 | ||
Company goal percentage met by the end of 2020 for carbon dioxide emissions reduction below 2005 levels | 50.00% | ||
Company goal for percent of carbon dioxide emission reduction below 2005 levels by 2025 | 60.00% | ||
Company goal for percentage of carbon dioxide emission reduction below 2005 levels by 2030 | 80.00% | ||
Capacity of coal-fired generation retired, in megawatts | MW | 300 | ||
Capacity of fossil-fueled generation to be retired by 2025, in megawatts | MW | 1,800 | ||
Carbon dioxide emissions | T | 5.4 | ||
Climate Change | Natural gas | |||
Air quality | |||
Initial 2030 percentage goal for a reduction of methane emissions from a 2011 baseline | 30.00% | ||
Carbon dioxide emissions | T | 3.5 | ||
Cross State Air Pollution Rule Update Rule Revision | Electric | |||
Air quality | |||
Number of states in group 2 for CSAPR update rule revision | States | 9 | ||
Number of states affected by the CSAPR update rule revision | States | 21 | ||
Amount of further NOx reductions needed within the nine effected states | performance_obligations | 0 | ||
Steam Electric Effluent Limitation Guidelines | Electric | |||
Water quality | |||
Expected capital investment to achieve required discharge limits | $ 10 | ||
Manufactured Gas Plant Remediation | Natural gas | |||
Manufactured gas plant remediation | |||
Reserves for future environmental remediation | 88.3 | $ 88.3 | |
Manufactured Gas Plant Remediation | Natural gas | Environmental remediation costs | |||
Manufactured gas plant remediation | |||
Regulatory assets | $ 115.3 | $ 116.1 |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Supplemental Cash Flow Information [Abstract] | ||
Cash paid for interest, net of amount capitalized | $ 4.3 | $ 4.9 |
Significant non-cash investing and financing transactions: | ||
Accounts payable related to construction costs | $ 11.6 | $ 17.6 |
REGULATORY ENVIRONMENT - RECOVE
REGULATORY ENVIRONMENT - RECOVERY OF NATURAL GAS COSTS (Details) - USD ($) $ in Millions | Mar. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Public Utilities, General Disclosures [Line Items] | |||
Amounts recoverable from customers | $ 16.8 | $ 0 | |
Public Service Commission of Wisconsin (PSCW) | Excess Natural Gas Costs | |||
Public Utilities, General Disclosures [Line Items] | |||
Amounts recoverable from customers | $ 28 | ||
Recovery period of excess natural gas costs | 3 months |
REGULATORY ENVIRONMENT - COVID-
REGULATORY ENVIRONMENT - COVID-19 (Details) | 1 Months Ended |
Mar. 31, 2020order | |
Public Service Commission of Wisconsin (PSCW) | |
Public Utilities, General Disclosures [Line Items] | |
Number of orders issued in response to COVID-19 | 2 |
REGULATORY ENVIRONMENT - 2022 R
REGULATORY ENVIRONMENT - 2022 RATES (Details) - Public Service Commission of Wisconsin (PSCW) - 2022 Rates | Mar. 30, 2021 |
Public Utilities, General Disclosures [Line Items] | |
Period to forego filing a rate case | 1 year |
Percentage of first 15 basis points of additional earnings retained by the utility | 100.00% |
Return on equity in excess of authorized amount (as a percent) | 0.15% |
REGULATORY ENVIRONMENT - 2020 a
REGULATORY ENVIRONMENT - 2020 and 2021 RATES (Details) - Public Service Commission of Wisconsin (PSCW) $ in Millions | 1 Months Ended |
Dec. 31, 2019USD ($) | |
2020 rates | Electric rates | |
Public Utilities, General Disclosures [Line Items] | |
Approved rate increase | $ 15.8 |
Approved rate increase (as a percent) | 1.60% |
2020 rates | Electric rates | Tax Cuts and Jobs Act of 2017 | |
Public Utilities, General Disclosures [Line Items] | |
Amortization of regulatory liabilities | $ 11 |
2020 rates | Natural gas rates | |
Public Utilities, General Disclosures [Line Items] | |
Approved rate increase | $ 4.3 |
Approved rate increase (as a percent) | 1.40% |
2020 rates | Natural gas rates | Tax Cuts and Jobs Act of 2017 | |
Public Utilities, General Disclosures [Line Items] | |
Amortization of regulatory liabilities | $ 5 |
2021 rates | Electric rates | Tax Cuts and Jobs Act of 2017 | |
Public Utilities, General Disclosures [Line Items] | |
Amortization of regulatory liabilities | 39 |
2021 rates | Natural gas rates | Tax Cuts and Jobs Act of 2017 | |
Public Utilities, General Disclosures [Line Items] | |
Amortization of regulatory liabilities | $ 5 |
2020 and 2021 rates | |
Public Utilities, General Disclosures [Line Items] | |
Approved return on equity (as a percent) | 10.00% |
Approved common equity component average (as a percent) | 52.50% |
Percentage of first 25 basis points of additional earnings retained by the utility | 100.00% |
Return on equity in excess of authorized amount (as a percent) | 0.25% |
Percentage of additional earnings between 25 and 75 basis points refunded to customers | 50.00% |
Return on equity in excess of first 25 basis points above authorized amount (as a percent) | 0.50% |
Percentage of earnings in excess of 75 basis points refunded to customers | 100.00% |
2020 and 2021 rates | Electric rates | |
Public Utilities, General Disclosures [Line Items] | |
Authorized revenue requirement for ReACT | $ 275 |
Cost of the ReACT project | $ 342 |
2020 and 2021 rates | Electric rates | ReACT | |
Public Utilities, General Disclosures [Line Items] | |
Collection of ReACT regulatory asset in years | 8 years |
2020 and 2021 rates | Electric rates | Tax Cuts and Jobs Act of 2017 | |
Public Utilities, General Disclosures [Line Items] | |
Amortization period | 2 years |
2020 and 2021 rates | Electric rates | Earnings sharing mechanisms | |
Public Utilities, General Disclosures [Line Items] | |
Amortization of regulatory liabilities | $ 21 |
Amortization period | 2 years |
2020 and 2021 rates | Natural gas rates | Tax Cuts and Jobs Act of 2017 | |
Public Utilities, General Disclosures [Line Items] | |
Amortization period | 4 years |