DOCUMENT_AND_ENTITY_INFORMATIO
DOCUMENT AND ENTITY INFORMATION | 9 Months Ended | |
Sep. 30, 2014 | Nov. 04, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'WISCONSIN PUBLIC SERVICE CORP | ' |
Entity Central Index Key | '0000107833 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 23,896,962 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Income Statement [Abstract] | ' | ' | ' | ' |
Operating revenues | $370.40 | $371.90 | $1,284.90 | $1,173.10 |
Cost of fuel, natural gas, and purchased power | 138.8 | 151.3 | 595.4 | 528.2 |
Operating and maintenance expense | 113.9 | 115.9 | 366.6 | 340.1 |
Depreciation and amortization expense | 28.7 | 27.6 | 84.6 | 78.8 |
Taxes other than income taxes | 11.1 | 11.9 | 36.3 | 36.5 |
Operating income | 77.9 | 65.2 | 202 | 189.5 |
Miscellaneous income | 5.6 | 6 | 19.5 | 16.9 |
Interest expense | 14.6 | 10.7 | 42.9 | 31.9 |
Other expense | -9 | -4.7 | -23.4 | -15 |
Income before taxes | 68.9 | 60.5 | 178.6 | 174.5 |
Provision for income taxes | 26 | 22.8 | 66.7 | 64.7 |
Net income | 42.9 | 37.7 | 111.9 | 109.8 |
Preferred stock dividend requirements | -0.7 | -0.7 | -2.3 | -2.3 |
Net income attributed to common shareholder | $42.20 | $37 | $109.60 | $107.50 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Assets | ' | ' |
Cash and cash equivalents | $3.60 | $5.70 |
Accounts receivable and accrued unbilled revenues, net of reserves of $3.8 and $2.5, respectively | 164.4 | 209.8 |
Receivables from related parties | 1.6 | 5.2 |
Inventories | ' | ' |
Fuel and gas | 82.9 | 60 |
Materials and supplies, at average cost | 38.2 | 34.9 |
Regulatory assets | 30 | 46.2 |
Prepaid taxes | 28.7 | 63.6 |
Other current assets | 14 | 16.7 |
Current assets | 363.4 | 442.1 |
Property, plant, and equipment, net of accumulated depreciation of $1,547.4 and $1,483.1, respectively | 3,053.80 | 2,887.70 |
Regulatory assets | 343.9 | 342.5 |
Goodwill | 36.4 | 36.4 |
Pension and other postretirement benefit assets | 224 | 145.1 |
Other long-term assets | 108.2 | 107.5 |
Total assets | 4,129.70 | 3,961.30 |
Liabilities and Shareholders' Equity | ' | ' |
Short-term debt | 63 | 25.6 |
Current portion of long-term debt to parent | 2.1 | 0 |
Accounts payable | 143.1 | 131.8 |
Payables to related parties | 11.4 | 13.8 |
Regulatory liabilities | 8.8 | 38 |
Accrued interest | 21.5 | 6 |
Other current liabilities | 66.5 | 66 |
Current liabilities | 316.4 | 281.2 |
Long-term debt to parent | 3.6 | 6.3 |
Long-term debt | 1,174.50 | 1,174.50 |
Deferred income taxes | 672.5 | 619.5 |
Deferred investment tax credits | 7.8 | 8.1 |
Regulatory liabilities | 337.5 | 286.3 |
Environmental remediation liabilities | 76 | 64.4 |
Pension and other postretirement benefit obligations | 33.8 | 76.4 |
Payables to related parties | 5.6 | 6.1 |
Other long-term liabilities | 67.5 | 71.9 |
Long-term liabilities | 2,378.80 | 2,313.50 |
Commitments and contingencies | ' | ' |
Preferred stock - $100 par value; 1,000,000 shares authorized; 511,882 shares issued and outstanding | 51.2 | 51.2 |
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 | 765.9 | 723.5 |
Retained earnings | 521.8 | 496.3 |
Total liabilities and shareholders’ equity | $4,129.70 | $3,961.30 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ' | ' |
Accounts receivable and accrued unbilled revenues, reserves (in dollars) | $3.80 | $2.50 |
Property, plant, and equipment, accumulated depreciation (in dollars) | $1,547.40 | $1,483.10 |
Preferred stock, par value (in dollars per share) | $100 | ' |
Preferred stock, shares authorized | 1,000,000 | ' |
Preferred stock, shares issued | 511,882 | ' |
Preferred stock, shares outstanding | 511,882 | ' |
Common stock, par value (in dollars per share) | $4 | ' |
Common stock, shares authorized | 32,000,000 | ' |
Common stock, shares, issued | 23,896,962 | ' |
Common stock, shares outstanding | 23,896,962 | ' |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CAPITALIZATION (USD $) | 9 Months Ended | |
In Millions, except Share data, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Schedule of Capitalization | ' | ' |
Common stock – $4 par value; 32,000,000 shares authorized; 23,896,962 shares outstanding | $95.60 | $95.60 |
Additional paid-in capital | 765.9 | 723.5 |
Retained earnings | 521.8 | 496.3 |
Total common stock equity | 1,383.30 | 1,315.40 |
Preferred stock, shares outstanding | 511,882 | ' |
Preferred stock - $100 par value; 1,000,000 shares authorized; 511,882 shares issued and outstanding | 51.2 | 51.2 |
Total long-term debt to parent (including current portion) | 5.7 | 6.3 |
Current portion of long-term debt to parent | -2.1 | 0 |
Long-term debt to parent | 3.6 | 6.3 |
Total First Mortgage Bonds and Senior Notes | 1,175.10 | 1,175.10 |
Unamortized discount on long-term debt | -0.6 | -0.6 |
Total long-term debt | 1,174.50 | 1,174.50 |
Total capitalization | 2,612.60 | 2,547.40 |
Long Term debt to parent, 8.76% Series, Year Due, 2015 | ' | ' |
Schedule of Capitalization | ' | ' |
Interest rate (as a percent) | 8.76% | ' |
Total long-term debt to parent (including current portion) | 2.1 | 2.4 |
Long Term debt to parent, 7.35% Series, Year Due, 2016 | ' | ' |
Schedule of Capitalization | ' | ' |
Interest rate (as a percent) | 7.35% | ' |
Total long-term debt to parent (including current portion) | 3.6 | 3.9 |
Long Term debt, 7.125% Series, Year Due, 2023 | ' | ' |
Schedule of Capitalization | ' | ' |
Interest rate (as a percent) | 7.13% | ' |
First Mortgage Bonds | 0.1 | 0.1 |
Long Term debt, 6.375% Series, Year Due, 2015 | ' | ' |
Schedule of Capitalization | ' | ' |
Interest rate (as a percent) | 6.38% | ' |
Senior Notes | 125 | 125 |
Long Term debt, 5.65% Series, Year Due, 2017 | ' | ' |
Schedule of Capitalization | ' | ' |
Interest rate (as a percent) | 5.65% | ' |
Senior Notes | 125 | 125 |
Long Term debt, 6.08% Series, Year Due, 2028 | ' | ' |
Schedule of Capitalization | ' | ' |
Interest rate (as a percent) | 6.08% | ' |
Senior Notes | 50 | 50 |
Long Term debt, 5.55% Series, Year Due, 2036 | ' | ' |
Schedule of Capitalization | ' | ' |
Interest rate (as a percent) | 5.55% | ' |
Senior Notes | 125 | 125 |
Long Term Debt 3.671% Series, Year Due, 2042 | ' | ' |
Schedule of Capitalization | ' | ' |
Interest rate (as a percent) | 3.67% | ' |
Senior Notes | 300 | 300 |
Long Term debt 4.752% Series, Year Due 2044 | ' | ' |
Schedule of Capitalization | ' | ' |
Interest rate (as a percent) | 4.75% | ' |
Senior Notes | 450 | 450 |
Preferred stock, 5.00% Series | ' | ' |
Schedule of Capitalization | ' | ' |
Preferred stock, dividend rate, (as a percent) | 5.00% | ' |
Preferred stock, shares outstanding | 131,916 | ' |
Preferred stock - $100 par value; 1,000,000 shares authorized; 511,882 shares issued and outstanding | 13.2 | 13.2 |
Preferred stock, 5.04% Series | ' | ' |
Schedule of Capitalization | ' | ' |
Preferred stock, dividend rate, (as a percent) | 5.04% | ' |
Preferred stock, shares outstanding | 29,983 | ' |
Preferred stock - $100 par value; 1,000,000 shares authorized; 511,882 shares issued and outstanding | 3 | 3 |
Preferred stock, 5.08% Series | ' | ' |
Schedule of Capitalization | ' | ' |
Preferred stock, dividend rate, (as a percent) | 5.08% | ' |
Preferred stock, shares outstanding | 49,983 | ' |
Preferred stock - $100 par value; 1,000,000 shares authorized; 511,882 shares issued and outstanding | 5 | 5 |
Preferred stock, 6.76% Series | ' | ' |
Schedule of Capitalization | ' | ' |
Preferred stock, dividend rate, (as a percent) | 6.76% | ' |
Preferred stock, shares outstanding | 150,000 | ' |
Preferred stock - $100 par value; 1,000,000 shares authorized; 511,882 shares issued and outstanding | 15 | 15 |
Preferred stock, 6.88% Series | ' | ' |
Schedule of Capitalization | ' | ' |
Preferred stock, dividend rate, (as a percent) | 6.88% | ' |
Preferred stock, shares outstanding | 150,000 | ' |
Preferred stock - $100 par value; 1,000,000 shares authorized; 511,882 shares issued and outstanding | $15 | $15 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CAPITALIZATION (Parenthetical) (USD $) | Sep. 30, 2014 |
CONDENSED CONSOLIDATED STATEMENTS OF CAPITALIZATION | ' |
Common stock, par value (in dollars per share) | $4 |
Common stock, shares authorized | 32,000,000 |
Common stock, shares outstanding | 23,896,962 |
Preferred stock, par value (in dollars per share) | $100 |
Preferred stock, shares authorized | 1,000,000 |
CONDENSED_CONSOLIDATED_STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Operating Activities | ' | ' |
Net income | $111.90 | $109.80 |
Adjustments to reconcile net income to net cash provided by operating activities | ' | ' |
Depreciation and amortization expense | 84.6 | 78.8 |
Recoveries and refunds of regulatory assets and liabilities | 2.6 | -9.9 |
Bad debt expense | 5.2 | 3.4 |
Pension and other postretirement (credit) expense | -4.4 | 16.9 |
Pension and other postretirement contributions | -46.7 | -38.1 |
Deferred income taxes and investment tax credits | 52.1 | 60.3 |
Termination of tolling agreement with Fox Energy Company LLC | 0 | -50 |
Deferrals to regulatory assets and liabilities | -17.8 | 6.8 |
Other | -10.5 | -5.7 |
Changes in working capital | ' | ' |
Accounts receivable and accrued unbilled revenues | 43.6 | 25.5 |
Inventories | -26.5 | 0.9 |
Prepaid taxes | 34.9 | 15.6 |
Other current assets | 1.3 | 2.8 |
Accounts payable | -10.3 | -27.5 |
Other current liabilities | 8 | 22.7 |
Net cash provided by operating activities | 228 | 212.3 |
Investing Activities | ' | ' |
Capital expenditures | -222.9 | -172.8 |
Acquisition of Fox Energy Company LLC | 0 | -391.6 |
Grant received related to Crane Creek wind project | 0 | 69 |
Other | 4.3 | 4.1 |
Net cash used for investing activities | -218.6 | -491.3 |
Financing Activities | ' | ' |
Short-term debt, net | 37.4 | 19 |
Borrowing on term credit facility | 0 | 200 |
Repayment of long-term debt | 0 | -22 |
Repayment of long-term debt to parent | -0.6 | -0.6 |
Payment of dividends to parent | -83.9 | -81.5 |
Equity contribution from parent | 40 | 200 |
Return of capital to parent | 0 | 35 |
Preferred stock dividend requirements | -2.3 | -2.3 |
Other | -2.1 | 1.3 |
Net cash (used for) provided by financing activities | -11.5 | 278.9 |
Net change in cash and cash equivalents | -2.1 | -0.1 |
Cash and cash equivalents at beginning of period | 5.7 | 6.5 |
Cash and cash equivalents at end of period | 3.6 | 6.4 |
Supplemental Cash Flow Information | ' | ' |
Cash paid for interest | 27.9 | 22.7 |
Cash received for income taxes | ($5.10) | ($2.40) |
BASIS_OF_PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
FINANCIAL INFORMATION | ' |
Basis of Presentation | |
As used in these notes, the term "financial statements" refers to the condensed consolidated financial statements. This includes the condensed consolidated statements of income, condensed consolidated balance sheets, condensed consolidated statements of capitalization, and condensed consolidated statements of cash flows, unless otherwise noted. In this report, when we refer to "us," "we," "our," or "ours," we are referring to WPS. | |
We prepare our financial statements in conformity with the rules and regulations of the SEC for Quarterly Reports on Form 10-Q and in accordance with 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 consolidated financial statements and footnotes in our Annual Report on Form 10-K for the year ended December 31, 2013. Financial results for an interim period may not give a true indication of results for the year. | |
In management’s opinion, these unaudited financial statements include all adjustments necessary for a fair presentation of financial results. All adjustments are normal and recurring, unless otherwise noted. All intercompany transactions have been eliminated in consolidation. |
PROPOSED_MERGER_OF_PARENT_COMP
PROPOSED MERGER OF PARENT COMPANY WITH WISCONSIN ENERGY CORPORATION | 9 Months Ended |
Sep. 30, 2014 | |
Business Combinations [Abstract] | ' |
PROPOSED MERGER OF PARENT COMPANY WITH WISCONSIN ENERGY CORPORATION | ' |
Proposed Merger of Parent Company with Wisconsin Energy Corporation | |
In June 2014, our parent company, Integrys Energy Group, entered into an Agreement and Plan of Merger with Wisconsin Energy Corporation. This transaction was approved unanimously by the Boards of Directors of both companies. It is subject to various approvals, including the FERC, Federal Communications Commission, PSCW, and other regulatory commissions. In addition, this transaction is subject to the approval of the shareholders of both companies, for which special shareholder meetings will be held on November 21, 2014. On October 24, 2014, the Department of Justice closed its review of the transaction and the Federal Trade Commission granted early termination of the waiting period under the Hart-Scott-Rodino Act. The transaction is also subject to other customary closing conditions. The transaction is expected to close in the summer of 2015. |
ACQUISITION_OF_FOX_ENERGY_CENT
ACQUISITION OF FOX ENERGY CENTER | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Business Combinations [Abstract] | ' | ||||
ACQUISITION OF FOX ENERGY CENTER | ' | ||||
Acquisition of Fox Energy Center | |||||
In March 2013, we acquired all of the equity interests in Fox Energy Company LLC for $391.6 million. Fox Energy Company LLC was dissolved immediately after the purchase. | |||||
The purchase included the Fox Energy Center, a 593-megawatt combined-cycle electric generating facility located in Wisconsin, along with associated contracts. Fox Energy Center is a dual-fuel facility, equipped to use fuel oil, but being run primarily on natural gas. This plant gives us a more balanced mix of owned electric generation, including coal, natural gas, hydroelectric, wind, and other renewable sources. In giving its approval for the purchase, the PSCW stated that the purchase price was reasonable and will benefit ratepayers. | |||||
The purchase price was allocated based on the estimated fair values of the assets acquired and the liabilities assumed at the date of acquisition, as follows: | |||||
(Millions) | |||||
Assets acquired (1) | |||||
Inventories - materials and supplies | $ | 3 | |||
Other current assets | 0.4 | ||||
Property, plant, and equipment | 374.4 | ||||
Other long-term assets (2) | 15.6 | ||||
Total assets acquired | $ | 393.4 | |||
Liabilities assumed | |||||
Accounts payable | $ | 1.8 | |||
Total liabilities assumed | $ | 1.8 | |||
(1) | Relates to the electric utility segment. | ||||
(2) | Intangible assets recorded for contractual services agreements. See Note 6, Goodwill and Other Intangible Assets, for more information. | ||||
Prior to the purchase, we supplied natural gas for the facility and purchased 500 megawatts of capacity and the associated energy output under a tolling arrangement. We paid $50.0 million for the early termination of the tolling arrangement. This amount was recorded as a regulatory asset, as we are authorized recovery by the PSCW. The amount is being amortized over a nine-year period that began on January 1, 2014. | |||||
We received regulatory approval to defer incremental costs incurred in 2013 associated with the purchase of the facility. These costs are included in our 2015 proposed retail electric rate increase. See Note 15, Regulatory Environment, for more information. Our rate order effective January 1, 2014, included the costs of operating the Fox Energy Center. | |||||
Pro forma adjustments to our revenues and earnings prior to the date of acquisition would not be meaningful or material. Prior to the acquisition, the Fox Energy Center was a nonregulated plant and sold all of its output to third parties, with most of the output purchased by us. The plant is now part of our regulated fleet, used to serve our customers. |
CASH_AND_CASH_EQUIVALENTS
CASH AND CASH EQUIVALENTS | 9 Months Ended |
Sep. 30, 2014 | |
Cash and Cash Equivalents [Abstract] | ' |
CASH AND CASH EQUIVALENTS | ' |
Cash and Cash Equivalents | |
Short-term investments with an original maturity of three months or less are reported as cash equivalents. | |
Construction costs funded through accounts payable totaled $56.2 million at September 30, 2014, and $29.5 million at September 30, 2013. These costs were treated as noncash investing activities. |
RISK_MANAGEMENT_ACTIVITIES
RISK MANAGEMENT ACTIVITIES | 9 Months Ended | ||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ||||||||||||||||||
RISK MANAGEMENT ACTIVITIES | ' | ||||||||||||||||||
Risk Management Activities | |||||||||||||||||||
We use physical and financial derivative contracts to manage commodity costs. None of these derivatives are designated as hedges for accounting purposes. The electric and natural gas utility segments use financial derivative contracts to manage the risks associated with the market price volatility of natural gas supply costs. The electric utility segment also uses financial derivative contracts to reduce price risk related to coal transportation costs and financial transmission rights (FTRs) to manage electric transmission congestion costs. | |||||||||||||||||||
The tables below show our assets and liabilities from risk management activities: | |||||||||||||||||||
September 30, 2014 | |||||||||||||||||||
(Millions) | Balance Sheet Presentation * | Assets | Liabilities | ||||||||||||||||
Natural gas contracts | Other Current | $ | 1.4 | $ | 0.4 | ||||||||||||||
FTRs | Other Current | 3.4 | 0.4 | ||||||||||||||||
Petroleum product contracts | Other Current | — | 0.3 | ||||||||||||||||
Coal contracts | Other Current | — | 2.3 | ||||||||||||||||
Coal contracts | Other Long-term | 2.4 | 0.1 | ||||||||||||||||
Other Current | 4.8 | 3.4 | |||||||||||||||||
Other Long-term | 2.4 | 0.1 | |||||||||||||||||
Total | $ | 7.2 | $ | 3.5 | |||||||||||||||
* | We classify assets and liabilities from risk management activities as current or long-term based upon the maturities of the underlying contracts. | ||||||||||||||||||
December 31, 2013 | |||||||||||||||||||
(Millions) | Balance Sheet Presentation * | Assets | Liabilities | ||||||||||||||||
Natural gas contracts | Other Current | $ | 0.6 | $ | 0.1 | ||||||||||||||
FTRs | Other Current | 1.5 | 0.3 | ||||||||||||||||
Petroleum product contracts | Other Current | 0.1 | — | ||||||||||||||||
Coal contracts | Other Current | — | 1.9 | ||||||||||||||||
Coal contracts | Other Long-term | 0.2 | 0.8 | ||||||||||||||||
Other Current | 2.2 | 2.3 | |||||||||||||||||
Other Long-term | 0.2 | 0.8 | |||||||||||||||||
Total | $ | 2.4 | $ | 3.1 | |||||||||||||||
* | We classify assets and liabilities from risk management activities as current or long-term based upon the maturities of the underlying contracts. | ||||||||||||||||||
The following tables show the potential effect on our financial position of netting arrangements for recognized derivative assets and liabilities: | |||||||||||||||||||
September 30, 2014 | |||||||||||||||||||
(Millions) | Gross Amount | Potential Effects of Netting, Including Cash Collateral | Net Amount | ||||||||||||||||
Derivative assets subject to master netting or similar arrangements | $ | 4.8 | $ | 1.1 | $ | 3.7 | |||||||||||||
Derivative assets not subject to master netting or similar arrangements | 2.4 | 2.4 | |||||||||||||||||
Total risk management assets | $ | 7.2 | $ | 6.1 | |||||||||||||||
Derivative liabilities subject to master netting or similar arrangements | $ | 1.1 | $ | 1.1 | $ | — | |||||||||||||
Derivative liabilities not subject to master netting or similar arrangements | 2.4 | 2.4 | |||||||||||||||||
Total risk management liabilities | $ | 3.5 | $ | 2.4 | |||||||||||||||
31-Dec-13 | |||||||||||||||||||
(Millions) | Gross Amount | Potential Effects of Netting, Including Cash Collateral | Net Amount | ||||||||||||||||
Derivative assets subject to master netting or similar arrangements | $ | 2.2 | $ | 0.6 | $ | 1.6 | |||||||||||||
Derivative assets not subject to master netting or similar arrangements | 0.2 | 0.2 | |||||||||||||||||
Total risk management assets | $ | 2.4 | $ | 1.8 | |||||||||||||||
Derivative liabilities subject to master netting or similar arrangements | $ | 0.4 | $ | 0.4 | $ | — | |||||||||||||
Derivative liabilities not subject to master netting or similar arrangements | 2.7 | 2.7 | |||||||||||||||||
Total risk management liabilities | $ | 3.1 | $ | 2.7 | |||||||||||||||
Our master netting and similar arrangements have conditional rights of setoff that can be enforced under a variety of situations, including counterparty default or credit rating downgrade below investment grade. We have trade receivables and trade payables, subject to master netting or similar arrangements, that are not included in the above tables. These amounts may offset (or conditionally offset) the net amounts presented in the above tables. | |||||||||||||||||||
Financial collateral received or provided is restricted to the extent that it is required per the terms of the related agreements. The following table shows our cash collateral positions: | |||||||||||||||||||
(Millions) | September 30, 2014 | 31-Dec-13 | |||||||||||||||||
Cash collateral provided to others related to contracts under master netting or similar arrangements * | $ | 4.3 | $ | 3.1 | |||||||||||||||
Cash collateral received from others related to contracts under master netting or similar arrangements * | — | 0.2 | |||||||||||||||||
* | Cash collateral provided to others is reflected in other current assets and cash collateral received from others is reflected in other current liabilities on the balance sheets. | ||||||||||||||||||
The following table shows the unrealized gains (losses) recorded related to derivative contracts: | |||||||||||||||||||
Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||||
(Millions) | Financial Statement Presentation | 2014 | 2013 | 2014 | 2013 | ||||||||||||||
Natural gas | Balance Sheet — Regulatory assets (current) | $ | (0.3 | ) | $ | (0.2 | ) | $ | (0.4 | ) | $ | 0.3 | |||||||
Natural gas | Balance Sheet — Regulatory liabilities (current) | 0.5 | — | 0.4 | (0.1 | ) | |||||||||||||
FTRs | Balance Sheet — Regulatory assets (current) | 0.7 | 0.8 | (0.2 | ) | — | |||||||||||||
FTRs | Balance Sheet — Regulatory liabilities (current) | (0.3 | ) | — | 0.7 | (0.3 | ) | ||||||||||||
Petroleum | Balance Sheet — Regulatory assets (current) | (0.4 | ) | 0.1 | (0.4 | ) | — | ||||||||||||
Petroleum | Balance Sheet — Regulatory liabilities (current) | (0.1 | ) | — | (0.1 | ) | — | ||||||||||||
Petroleum | Income Statement — Operating and maintenance expense | — | (0.1 | ) | — | (0.1 | ) | ||||||||||||
Coal | Balance Sheet — Regulatory assets (current) | (0.9 | ) | (0.6 | ) | (1.0 | ) | 2.1 | |||||||||||
Coal | Balance Sheet — Regulatory assets (long-term) | 0.1 | 0.2 | 0.7 | 4.2 | ||||||||||||||
Coal | Balance Sheet — Regulatory liabilities (current) | — | — | — | (0.3 | ) | |||||||||||||
Coal | Balance Sheet — Regulatory liabilities (long-term) | (0.2 | ) | 1.5 | 2.3 | (0.7 | ) | ||||||||||||
We had the following notional volumes of outstanding derivative contracts: | |||||||||||||||||||
(Millions) | September 30, 2014 | 31-Dec-13 | |||||||||||||||||
Commodity | Purchases | Sales | Other Transactions | Purchases | Sales | Other Transactions | |||||||||||||
Natural gas (therms) | 1,479.90 | — | N/A | 2,242.50 | 7 | N/A | |||||||||||||
FTRs (kilowatt-hours) | N/A | N/A | 5,644.00 | N/A | N/A | 3,427.00 | |||||||||||||
Petroleum products (barrels) | 0.1 | — | N/A | 0.1 | — | N/A | |||||||||||||
Coal contract (tons) | 3.4 | — | N/A | 4.8 | — | N/A | |||||||||||||
GOODWILL_AND_OTHER_INTANGIBLE_
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | ' | ||||||||||||||||||||||||
Goodwill and Other Intangible Assets | |||||||||||||||||||||||||
We had no changes to the carrying amount of goodwill during the nine months ended September 30, 2014, and 2013. In the second quarter of 2014, we completed our annual goodwill impairment test, and no impairment resulted from this test. | |||||||||||||||||||||||||
Our intangible assets listed below consist of contractual service agreements that provide for major maintenance and protection against unforeseen maintenance costs related to the combustion turbine generators at the Fox Energy Center. These contractual service agreements were included in other long-term assets on the balance sheets. | |||||||||||||||||||||||||
September 30, 2014 | December 31, 2013 | ||||||||||||||||||||||||
(Millions) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||
Amortized intangible assets | |||||||||||||||||||||||||
Contractual service agreements | $ | 15.6 | $ | (3.5 | ) | $ | 12.1 | $ | 15.6 | $ | (1.8 | ) | $ | 13.8 | |||||||||||
In October 2014, we received approval from the PSCW to upgrade the combustion turbine generators at the Fox Energy Center earlier than planned. As a result of this approval, we shortened the amortization period of one of our service agreements. The remaining weighted-average amortization period for these intangible assets at September 30, 2014, was approximately four years. Since we have approval from the PSCW to recover the value of our service agreements from customers over seven years, the increase in amortization due to the shorter amortization period will be recorded to a regulatory asset. This regulatory asset will be amortized to reflect the seven-year recovery period. | |||||||||||||||||||||||||
The table below shows our amortization expense recognized in the statements of income: | |||||||||||||||||||||||||
Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||||||||||
(Millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
Amortization recorded in depreciation and amortization expense | $ | 0.5 | $ | 0.6 | $ | 1.7 | $ | 1.2 | |||||||||||||||||
The following table shows our estimated amortization expense for the next five years, including amounts recorded through September 30, 2014: | |||||||||||||||||||||||||
For the Year Ending December 31 | |||||||||||||||||||||||||
(Millions) | 2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||||||
Amortization to be recorded in depreciation and amortization expense | $ | 2.2 | $ | 2.2 | $ | 2.2 | $ | 1.7 | $ | 1.2 | |||||||||||||||
Amortization to be recorded in regulatory assets | 0.3 | 1 | 1 | 0.5 | — | ||||||||||||||||||||
SHORTTERM_DEBT_AND_LINES_OF_CR
SHORT-TERM DEBT AND LINES OF CREDIT | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Short-term Debt [Abstract] | ' | ||||||||||
SHORT-TERM DEBT AND LINES OF CREDIT | ' | ||||||||||
Short-Term Debt and Lines of Credit | |||||||||||
Our outstanding short-term borrowings were as follows: | |||||||||||
(Millions, except percentages) | September 30, 2014 | 31-Dec-13 | |||||||||
Commercial paper | $ | 63 | $ | 25.6 | |||||||
Average interest rate on commercial paper | 0.18 | % | 0.14 | % | |||||||
The commercial paper outstanding at September 30, 2014, had maturity dates ranging from October 1, 2014, through October 7, 2014. | |||||||||||
Our average amount of commercial paper borrowings based on daily outstanding balances during the nine months ended September 30, 2014, and 2013, was $25.7 million and $88.4 million, respectively. | |||||||||||
We manage our liquidity by maintaining adequate external financing commitments. The information in the table below relates to our revolving credit facilities used to support our commercial paper borrowing program, including remaining available capacity under these facilities: | |||||||||||
(Millions) | Maturity | September 30, 2014 | 31-Dec-13 | ||||||||
Revolving credit facility (1) | 5/17/14 | $ | — | $ | 135 | ||||||
Revolving credit facility (2) | 5/7/15 | 135 | — | ||||||||
Revolving credit facility | 6/13/17 | 115 | 115 | ||||||||
Total short-term credit capacity | $ | 250 | $ | 250 | |||||||
Less: | |||||||||||
Commercial paper outstanding | 63 | 25.6 | |||||||||
Available capacity under existing agreements | $ | 187 | $ | 224.4 | |||||||
(1) | This credit facility was terminated and replaced with a new credit facility in May 2014. | ||||||||||
(2) | We requested approval from the PSCW to extend this facility through May 8, 2019. |
INCOME_TAXES
INCOME TAXES | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||
INCOME TAXES | ' | ||||||||||||
Income Taxes | |||||||||||||
We calculate our interim period provision for income taxes based on our projected annual effective tax rate as adjusted for certain discrete items. | |||||||||||||
The table below shows our effective tax rates: | |||||||||||||
Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
Effective tax rate | 37.7 | % | 37.7 | % | 37.3 | % | 37.1 | % | |||||
Our effective tax rate normally differs from the federal statutory tax rate of 35% due to additional provision for state income tax obligations. No other items had a significant impact on our effective tax rates during the three and nine months ended September 30, 2014, and 2013. | |||||||||||||
During the three and nine months ended September 30, 2014, there was not a significant change in our liability for unrecognized tax benefits. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended | ||||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | ' | ||||||||||||||||||||||||||||||
Commitments and Contingencies | |||||||||||||||||||||||||||||||
(a) Unconditional Purchase Obligations and Purchase Order Commitments | |||||||||||||||||||||||||||||||
We routinely enter into long-term purchase and sale commitments for various quantities and lengths of time. 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. The following table shows our minimum future commitments related to these purchase obligations as of September 30, 2014. | |||||||||||||||||||||||||||||||
Payments Due By Period | |||||||||||||||||||||||||||||||
(Millions) | Year Contracts Extend Through | Total Amounts Committed | 2014 | 2015 | 2016 | 2017 | 2018 | Later Years | |||||||||||||||||||||||
Electric utility | |||||||||||||||||||||||||||||||
Purchased power | 2029 | $ | 944 | $ | 19.1 | $ | 118.9 | $ | 42.3 | $ | 52.8 | $ | 55.8 | $ | 655.1 | ||||||||||||||||
Coal supply and transportation | 2018 | 124.9 | 15.6 | 45.1 | 21.1 | 22.2 | 20.9 | — | |||||||||||||||||||||||
Natural gas utility supply and transportation | 2024 | 255.6 | 12.1 | 45.4 | 43.4 | 43 | 42.5 | 69.2 | |||||||||||||||||||||||
Total | $ | 1,324.50 | $ | 46.8 | $ | 209.4 | $ | 106.8 | $ | 118 | $ | 119.2 | $ | 724.3 | |||||||||||||||||
We also had commitments of $384.8 million in the form of purchase orders issued to various vendors at September 30, 2014, that relate to normal business operations, including construction projects. | |||||||||||||||||||||||||||||||
(b) Environmental Matters | |||||||||||||||||||||||||||||||
Air Permitting Violation Claims | |||||||||||||||||||||||||||||||
Weston and Pulliam Clean Air Act (CAA) Issues: | |||||||||||||||||||||||||||||||
In November 2009, the EPA issued a Notice of Violation (NOV) to us alleging violations of the CAA's New Source Review requirements relating to certain projects completed at the Weston and Pulliam plants from 1994 to 2009. We reached a settlement agreement with the EPA regarding this NOV and signed a Consent Decree. This Consent Decree was approved by the U.S. District Court (Court) in March 2013, after a public comment period. The final Consent Decree includes: | |||||||||||||||||||||||||||||||
• | the installation of emission control technology, including ReACT™, on Weston 3, | ||||||||||||||||||||||||||||||
• | changed operating conditions (including refueling, repowering, and/or retirement of units), | ||||||||||||||||||||||||||||||
• | limitations on plant emissions, | ||||||||||||||||||||||||||||||
• | beneficial environmental projects totaling $6.0 million, and | ||||||||||||||||||||||||||||||
• | a civil penalty of $1.2 million. | ||||||||||||||||||||||||||||||
As mentioned above, the Consent Decree contains a requirement to refuel, repower, and/or retire certain Weston and Pulliam units. We announced that certain Weston and Pulliam units mentioned in the Consent Decree will be retired early, in June 2015. In July 2014, we filed for approval from the PSCW to reclassify the undepreciated book value of the retired units to a regulatory asset in 2015, with recovery of a full return, and for future amortization at current depreciable rates. We believe that we will receive approval of this treatment from the PSCW. | |||||||||||||||||||||||||||||||
We received approval from the PSCW in our 2014 rate order to recover prudently incurred 2014 costs as a result of complying with the terms of the Consent Decree, with the exception of the civil penalty. We also believe that prudently incurred costs after 2014 will be recoverable from customers based on past precedent with the PSCW. | |||||||||||||||||||||||||||||||
The majority of the beneficial environmental projects that we proposed have been approved by the EPA. Amounts have been accrued and recorded to regulatory assets, excluding costs associated with capital projects. | |||||||||||||||||||||||||||||||
In May 2010, we received from the Sierra Club a Notice of Intent to file a civil lawsuit based on allegations that we violated the CAA at the Weston and Pulliam plants. We entered into a Standstill Agreement with the Sierra Club by which the parties agreed to negotiate as part of the EPA NOV process, rather than litigate. The Standstill Agreement ended in October 2012, but no further action has been taken by the Sierra Club as of September 30, 2014. It is unknown whether the Sierra Club will take further action in the future. | |||||||||||||||||||||||||||||||
Columbia and Edgewater CAA Issues: | |||||||||||||||||||||||||||||||
In December 2009, the EPA issued an NOV to Wisconsin Power and Light (WP&L), the operator of the Columbia and Edgewater plants, and the other joint owners of these plants, including Madison Gas and Electric and us. The NOV alleges violations of the CAA's New Source Review requirements related to certain projects completed at those plants. We, WP&L, and Madison Gas and Electric reached a settlement agreement with the EPA regarding this NOV and signed a Consent Decree. This Consent Decree was approved by the Court in June 2013, after a public comment period. The final Consent Decree includes: | |||||||||||||||||||||||||||||||
• | the installation of emission control technology, including scrubbers at the Columbia plant, | ||||||||||||||||||||||||||||||
• | changed operating conditions (including refueling, repowering, and/or retirement of units), | ||||||||||||||||||||||||||||||
• | limitations on plant emissions, | ||||||||||||||||||||||||||||||
• | beneficial environmental projects, with our portion totaling $1.3 million, and | ||||||||||||||||||||||||||||||
• | our portion of a civil penalty and legal fees totaling $0.4 million. | ||||||||||||||||||||||||||||||
As mentioned above, the Consent Decree contains a requirement to refuel, repower, and/or retire certain of the Columbia and Edgewater units. As of September 30, 2014, no decision had been made on how to address this requirement. Therefore, retirement of the Columbia and Edgewater units mentioned in the Consent Decree was not considered probable. | |||||||||||||||||||||||||||||||
We believe that significant costs prudently incurred as a result of complying with the terms of the Consent Decree, with the exception of the civil penalty, will be recoverable from customers. | |||||||||||||||||||||||||||||||
All of the beneficial environmental projects that we proposed have been approved by the EPA. Amounts have been accrued and recorded to regulatory assets, excluding costs associated with capital projects. | |||||||||||||||||||||||||||||||
Weston Title V Air Permit: | |||||||||||||||||||||||||||||||
In August 2013, the WDNR issued the Weston Title V air permit. In September 2013, we challenged various requirements in the permit by filing a contested case proceeding with the WDNR and also filed a Petition for Judicial Review in the Brown County Circuit Court. The Sierra Club and Clean Wisconsin also filed Petitions for Judicial Review and requests for contested case proceedings regarding various aspects of the permit. The WDNR granted all parties' requests for contested case proceedings. The Petitions for Judicial Review, by all parties, have been stayed pending the resolution of the contested cases. In May 2014, the WDNR referred the contested case to the administrative law judge, and a schedule was set for dispositive motions, which have now been fully briefed. We filed an application to amend some permit terms that, if accepted, would resolve many of the outstanding issues. In September 2014, the WDNR issued a draft permit that resolves several issues we raised in the contested case. If these permit terms are finalized, we will withdraw nine claims under the Petition. The new permit does raise an additional issue regarding the sorbent injection rate, which we will challenge and is discussed below. | |||||||||||||||||||||||||||||||
In May 2014, the WDNR issued an NOV alleging that we failed to maintain a minimum sorbent feed rate prior to the Continuous Emissions Monitoring System certification. We and the WDNR have begun discussing resolution of this matter. In May 2014, the WDNR issued a Notice of Inquiry (NOI) alleging that we failed to comply with excess emission summary reporting requirements in the 2013 Weston Title V permit. We believe that the requirements identified in the NOV and NOI are stayed pursuant to state law pending the outcome of the Weston Title V air permit contested case and have filed a motion with the administrative law judge requesting confirmation of the stay. Briefing has been completed on this issue and we anticipate a decision from the administrative law judge in the fourth quarter of 2014. | |||||||||||||||||||||||||||||||
We do not expect these matters to have a material impact on our financial statements. | |||||||||||||||||||||||||||||||
Mercury and Interstate Air Quality Rules | |||||||||||||||||||||||||||||||
Mercury: | |||||||||||||||||||||||||||||||
The State of Wisconsin's mercury rule requires a 40% reduction from historical baseline mercury emissions, beginning January 1, 2010, through the end of 2014. Beginning in 2015, electric generating units above 150 megawatts will be required to reduce mercury emissions from fuel combusted by a minimum of 90%, or meet certain mercury emission limits annually based on gigawatt-hours of electricity produced. Reductions can be phased in and the 90% target delayed until 2021 if additional sulfur dioxide and nitrogen oxide reductions are implemented. By 2015, electric generating units above 25 megawatts, but less than 150 megawatts, must reduce their mercury emissions to a level defined by the Best Available Control Technology rule. | |||||||||||||||||||||||||||||||
In December 2011, the EPA issued the final Utility Mercury and Air Toxics Standards (MATS), which will regulate emissions of mercury and other hazardous air pollutants beginning in 2015. The State of Wisconsin is in the process of revising the state mercury rule to be consistent with the MATS rule. Projects approved and initiated to address the State of Wisconsin mercury rule are expected to ensure compliance with the mercury limits in the MATS rule. | |||||||||||||||||||||||||||||||
We will be in compliance with the State of Wisconsin's mercury rule at the end of 2014. In addition, we are making progress toward compliance with the MATS rule in 2015. We estimated capital costs of approximately $9 million for our wholly owned plants to achieve the required reductions for MATS compliance, of which approximately $5 million has been expended as of September 30, 2014. The capital costs are expected to be recovered in future rates. | |||||||||||||||||||||||||||||||
Sulfur Dioxide and Nitrogen Oxide: | |||||||||||||||||||||||||||||||
In July 2011, the EPA issued a final rule known as the Cross State Air Pollution Rule (CSAPR), which numerous parties, including us, challenged in the United States Court of Appeals (Court of Appeals) for the District of Columbia Circuit (D.C. Circuit). The new rule was to become effective in January 2012. However, in December 2011, the CSAPR requirements were stayed by the D.C. Circuit and a previous rule, the Clean Air Interstate Rule (CAIR), was implemented during the stay period. In August 2012, the D.C. Circuit issued their ruling vacating and remanding CSAPR and simultaneously reinstating CAIR pending the issuance of a replacement rule by the EPA. The case was appealed to the United States Supreme Court (Supreme Court), and in April 2014, the Supreme Court upheld the CSAPR rule and remanded the case to the Court of Appeals for the D.C. Circuit. In June 2014, the EPA requested that the Court of Appeals lift the stay of CSAPR. Further, the EPA asked the Court of Appeals to change the CSAPR compliance deadlines by three years, so that Phase 1 emissions budgets would apply in 2015 and 2016, and Phase 2 emissions budgets would apply to 2017 and beyond. In October 2014, the Court of Appeals granted the EPA's request and lifted the stay on CSAPR. There are remaining issues before the Court of Appeals, and there will need to be additional changes before CSAPR is implemented. As a result, it is premature to speculate on what additional controls or other actions, if any, we may be required to implement. We expect to recover any future compliance costs in future rates. | |||||||||||||||||||||||||||||||
Under CAIR, units affected by the Best Available Retrofit Technology (BART) rule were considered in compliance with BART for sulfur dioxide and nitrogen oxide emissions if they were in compliance with CAIR. This determination was updated when CSAPR was issued (CSAPR satisfied BART). Although particulate emissions also contribute to visibility impairment, the WDNR's modeling for Pulliam Unit 8, the only unit covered by BART, has shown the impairment to be so insignificant that additional capital expenditures or controls may not be warranted. | |||||||||||||||||||||||||||||||
Manufactured Gas Plant Remediation | |||||||||||||||||||||||||||||||
We operated facilities in the past at multiple sites for the purpose of manufacturing and storing manufactured gas. In connection with these activities, waste materials were produced that may have resulted in soil and groundwater contamination at these sites. Under certain laws and regulations relating to the protection of the environment, we are required to undertake remedial action with respect to some of these materials. We are coordinating the investigation and cleanup of the sites subject to EPA jurisdiction 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. | |||||||||||||||||||||||||||||||
We are responsible for the environmental remediation of ten sites, of which seven have been transferred to the EPA Superfund Alternative Sites Program. Under the EPA's program, the remedy decisions at these sites will be made using risk-based criteria typically used at Superfund sites. Our balance sheets include liabilities of $76.0 million that we have estimated and accrued for as of September 30, 2014, for future undiscounted investigation and cleanup costs for all sites. We may adjust these estimates in the future due to remedial technology, regulatory requirements, remedy determinations, and any claims of natural resource damages. As of September 30, 2014, cash expenditures for environmental remediation not yet recovered in rates were $11.9 million. Our balance sheets include a regulatory asset of $87.9 million at September 30, 2014, which is net of insurance recoveries, related to the expected recovery through rates of both cash expenditures and estimated future expenditures. Under current PSCW policies, we may not recover carrying costs associated with the cleanup expenditures. | |||||||||||||||||||||||||||||||
Management believes that any costs incurred for environmental activities relating to former manufactured gas plant operations that are not recoverable through contributions from other entities or from insurance carriers are prudently incurred and are, therefore, recoverable through rates. Accordingly, we do not expect these costs to have a material impact on our financial statements. However, any changes in the approved rate mechanisms for recovery of these costs, or any adverse conclusions by the PSCW or the MPSC with respect to the prudence of costs actually incurred, could materially affect recovery of such costs through rates. |
EMPLOYEE_BENEFIT_PLANS
EMPLOYEE BENEFIT PLANS | 9 Months Ended | ||||||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | ||||||||||||||||||||||||||||||||
EMPLOYEE BENEFIT PLANS | ' | ||||||||||||||||||||||||||||||||
Employee Benefit Plans | |||||||||||||||||||||||||||||||||
The following table shows the components of net periodic benefit cost (including amounts capitalized to our balance sheets) for our benefit plans: | |||||||||||||||||||||||||||||||||
Pension Benefits | Other Postretirement Benefits | ||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||
30-Sep | 30-Sep | 30-Sep | 30-Sep | ||||||||||||||||||||||||||||||
(Millions) | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||
Service cost | $ | 2.2 | $ | 2.7 | $ | 6.5 | $ | 8.1 | $ | 1.9 | $ | 2.6 | $ | 5.8 | $ | 7.9 | |||||||||||||||||
Interest cost | 8.6 | 7.6 | 25.8 | 22.9 | 2.7 | 3.4 | 8.8 | 10.1 | |||||||||||||||||||||||||
Expected return on plan assets | (16.0 | ) | (14.3 | ) | (48.0 | ) | (42.9 | ) | (4.0 | ) | (3.7 | ) | (12.0 | ) | (11.1 | ) | |||||||||||||||||
Loss on plan settlement | — | — | 0.4 | — | — | — | — | — | |||||||||||||||||||||||||
Amortization of prior service cost (credit) | 0.1 | 0.9 | 0.4 | 2.7 | (2.3 | ) | (0.6 | ) | (5.7 | ) | (1.6 | ) | |||||||||||||||||||||
Amortization of net actuarial losses | 3.7 | 6 | 11.2 | 18 | 0.7 | 1.9 | 2 | 5.6 | |||||||||||||||||||||||||
Net periodic benefit cost (credit) | $ | (1.4 | ) | $ | 2.9 | $ | (3.7 | ) | $ | 8.8 | $ | (1.0 | ) | $ | 3.6 | $ | (1.1 | ) | $ | 10.9 | |||||||||||||
Prior service costs (credits), and net actuarial losses that have not yet been recognized as a component of net periodic benefit cost are recorded as net regulatory assets or liabilities. | |||||||||||||||||||||||||||||||||
In March 2014, we remeasured the obligations of certain other postretirement benefit plans in which we are both a sponsor and participant. The remeasurement was necessary because we will replace the current retiree medical plans for participants age 65 and older with a Medicare Advantage plan starting in 2015. | |||||||||||||||||||||||||||||||||
Our funding policy is to contribute at least the minimum amounts that are required to be funded under the Employee Retirement Income Security Act, but not more than the maximum amounts that are currently deductible for income tax purposes. During the nine months ended September 30, 2014, we contributed $46.6 million to our pension plans and $0.1 million to our other postretirement benefit plans. We do not expect to contribute any additional amounts to our pension plans during the remainder of 2014. We expect to contribute an additional $3.0 million to our other postretirement benefit plans during the remainder of 2014, dependent upon various factors affecting us, including our liquidity position and possible tax law changes. |
STOCKBASED_COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||
STOCK-BASED COMPENSATION | ' | ||||||||||||||||
Stock-Based Compensation | |||||||||||||||||
Our employees may be granted awards under Integrys Energy Group’s stock-based compensation plans. Compensation cost associated with these awards is allocated to us based on the percentages used for allocation of the award recipients’ labor costs. | |||||||||||||||||
The following table reflects the stock-based compensation expense and the related deferred income tax benefit recognized in income for the three and nine months ended September 30: | |||||||||||||||||
Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||
(Millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Stock options | $ | 0.1 | $ | 0.2 | $ | 0.4 | $ | 0.5 | |||||||||
Performance stock rights | 0.1 | 0.4 | 3.9 | 1.7 | |||||||||||||
Restricted share units | 0.7 | 0.8 | 2.7 | 2.6 | |||||||||||||
Total stock-based compensation expense | $ | 0.9 | $ | 1.4 | $ | 7 | $ | 4.8 | |||||||||
Deferred income tax benefit | $ | 0.4 | $ | 0.6 | $ | 2.8 | $ | 1.9 | |||||||||
No stock-based compensation cost was capitalized during the three and nine months ended September 30, 2014, and 2013. | |||||||||||||||||
Stock Options | |||||||||||||||||
The fair value of stock option awards granted is estimated using a binomial lattice model. The expected term of option awards is derived from the output of the binomial lattice model and represents the period of time that options are expected to be outstanding. The risk-free interest rate is based on the United States Treasury yield curve. The expected dividend yield incorporates the current and historical dividend rate of Integrys Energy Group's common stock. The expected stock price volatility is estimated using its 10-year historical volatility. The following table shows the assumptions incorporated into the valuation model: | |||||||||||||||||
February 2014 Grant | |||||||||||||||||
Expected term | 8 years | ||||||||||||||||
Risk-free interest rate | 0.12% – 2.88% | ||||||||||||||||
Expected dividend yield | 5.28% | ||||||||||||||||
Expected volatility | 18% | ||||||||||||||||
The weighted-average fair value per stock option granted during the nine months ended September 30, 2014, and 2013, was $6.70 and $6.03, respectively. | |||||||||||||||||
A summary of stock option activity for the nine months ended September 30, 2014, and information related to outstanding and exercisable stock options at September 30, 2014, is presented below: | |||||||||||||||||
Stock Options | Weighted-Average | Weighted-Average | Aggregate | ||||||||||||||
Exercise Price Per | Remaining Contractual | Intrinsic Value | |||||||||||||||
Share | Life (in Years) | (Millions) | |||||||||||||||
Outstanding at December 31, 2013 | 49,993 | $ | 53.03 | ||||||||||||||
Granted | 13,890 | 55.23 | |||||||||||||||
Exercised | (17,333 | ) | 51.48 | ||||||||||||||
Outstanding at September 30, 2014 | 46,550 | $ | 54.26 | 8.2 | $ | 0.5 | |||||||||||
Exercisable at September 30, 2014 | 9,270 | $ | 52.15 | 7.2 | $ | 0.1 | |||||||||||
The aggregate intrinsic value for outstanding and exercisable options in the above table represents the total pre-tax intrinsic value that would have been received by the option holders had they all exercised their options on September 30, 2014. This is calculated as the difference between Integrys Energy Group’s closing stock price on September 30, 2014, and the option exercise price, multiplied by the number of in-the-money stock options. The intrinsic value of options exercised during the nine months ended September 30, 2014, and 2013, was not significant. | |||||||||||||||||
Effective October 24, 2014, Integrys Energy Group's Board of Directors accelerated the vesting of all unvested stock options held by active employees in order to mitigate the tax impacts of Section 280G of the Internal Revenue Code on us and certain of our employees. All stock options awarded to active employees also became exercisable as of this date. As a result of this modification, an insignificant amount of unrecognized compensation expense related to unvested and outstanding stock options at September 30, 2014, will be recognized in the fourth quarter of 2014. | |||||||||||||||||
Performance Stock Rights | |||||||||||||||||
The fair values of performance stock rights are estimated using a Monte Carlo valuation model. The risk-free interest rate is based on the United States Treasury yield curve. The expected dividend yield incorporates the current and historical dividend rate of Integrys Energy Group's common stock. The expected volatility is estimated using one to three years of historical data. The table below reflects the assumptions used in the valuation of the outstanding grants at September 30: | |||||||||||||||||
2014 | |||||||||||||||||
Risk-free interest rate | 0.06% – 0.60% | ||||||||||||||||
Expected dividend yield | 5.28% – 5.33% | ||||||||||||||||
Expected volatility | 17% – 23% | ||||||||||||||||
A summary of the activity for the nine months ended September 30, 2014, related to performance stock rights accounted for as equity awards is presented below: | |||||||||||||||||
Performance | Weighted-Average | ||||||||||||||||
Stock Rights | Fair Value (2) | ||||||||||||||||
Outstanding at December 31, 2013 | 5,561 | $ | 45.16 | ||||||||||||||
Granted | 1,113 | 44.28 | |||||||||||||||
Award modifications (1) | 2,295 | 85.09 | |||||||||||||||
Adjustment for shares not distributed | (3,347 | ) | 41.9 | ||||||||||||||
Outstanding at September 30, 2014 | 5,622 | $ | 63.23 | ||||||||||||||
(1) | Six months prior to the end of the performance period, employees can no longer change their election to defer the value of their performance stock rights into the deferred compensation plan. As a result, any awards not elected for deferral at this point in the performance period will be settled in Integrys Energy Group's common stock. This changes the classification of these awards from a liability award to an equity award. The change in classification is accounted for as an award modification. | ||||||||||||||||
(2) | Reflects the weighted-average fair value used to measure equity awards. Equity awards are measured using the grant date fair value or the fair value on the modification date. | ||||||||||||||||
The weighted-average grant date fair value of performance stock rights awarded during the nine months ended September 30, 2014, and 2013, was $44.28 and $48.50 per performance stock right, respectively. | |||||||||||||||||
A summary of the activity for the nine months ended September 30, 2014, related to performance stock rights accounted for as liability awards is presented below: | |||||||||||||||||
Performance | |||||||||||||||||
Stock Rights | |||||||||||||||||
Outstanding at December 31, 2013 | 9,222 | ||||||||||||||||
Granted | 4,440 | ||||||||||||||||
Award modifications * | (2,295 | ) | |||||||||||||||
Adjustment for shares not distributed | (379 | ) | |||||||||||||||
Outstanding at September 30, 2014 | 10,988 | ||||||||||||||||
* | Six months prior to the end of the performance period, employees can no longer change their election to defer the value of their performance stock rights into the deferred compensation plan. As a result, any awards not elected for deferral at this point in the performance period will be settled in Integrys Energy Group's common stock. This changes the classification of these awards from a liability award to an equity award. The change in classification is accounted for as an award modification. | ||||||||||||||||
The weighted-average fair value of all outstanding performance stock rights accounted for as liability awards as of September 30, 2014, was $77.97 per performance stock right. | |||||||||||||||||
No shares of Integrys Energy Group's common stock were distributed for performance stock rights during the nine months ended September 30, 2014, because the performance percentage was below the threshold payout level for those rights that were eligible for distribution. The total intrinsic value of shares distributed during the nine months ended September 30, 2013, was not significant. | |||||||||||||||||
Effective October 24, 2014, Integrys Energy Group's Board of Directors approved the acceleration of the distribution of certain performance stock rights held by active employees. For those performance stock rights with a performance period ending December 31, 2014, a portion of the estimated distribution will be made in December 2014. This change was made to help mitigate the tax impacts of Section 280G of the Internal Revenue Code on us and certain of our employees. | |||||||||||||||||
As of September 30, 2014, $1.9 million of compensation cost related to unvested and outstanding performance stock rights (equity and liability awards) was expected to be recognized over a weighted-average period of 1.4 years. | |||||||||||||||||
Restricted Share Units | |||||||||||||||||
A summary of the activity related to all restricted share unit awards (equity and liability awards) for the nine months ended September 30, 2014, is presented below: | |||||||||||||||||
Restricted Share | Weighted-Average | ||||||||||||||||
Unit Awards | Grant Date Fair Value | ||||||||||||||||
Outstanding at December 31, 2013 | 67,741 | $ | 52.06 | ||||||||||||||
Granted | 28,725 | 55.23 | |||||||||||||||
Dividend equivalents | 2,262 | 54.46 | |||||||||||||||
Vested and released | (28,325 | ) | 49.5 | ||||||||||||||
Transfers | 332 | 54.55 | |||||||||||||||
Forfeited | (804 | ) | 54.64 | ||||||||||||||
Outstanding at September 30, 2014 | 69,931 | $ | 54.46 | ||||||||||||||
The weighted-average grant date fair value of restricted share units awarded during the nine months ended September 30, 2014, and 2013, was $55.23 and $56.05 per unit, respectively. | |||||||||||||||||
The total intrinsic value of restricted share unit awards vested and released during the nine months ended September 30, 2014, and 2013, was | |||||||||||||||||
$1.5 million and $1.6 million, respectively. The actual tax benefit realized for the tax deductions from the vesting and release of restricted share units during the nine months ended September 30, 2014, and 2013, was not significant. | |||||||||||||||||
As of September 30, 2014, $3.9 million of compensation cost related to unvested and outstanding restricted share units was expected to be recognized over a weighted-average period of 2.3 years. |
COMMON_EQUITY
COMMON EQUITY | 9 Months Ended |
Sep. 30, 2014 | |
Stockholders' Equity Note [Abstract] | ' |
COMMON EQUITY | ' |
Common Equity | |
Various laws, regulations, and financial covenants impose restrictions on our ability to pay dividends to the sole holder of our common stock, Integrys Energy Group. | |
The PSCW allows us to pay dividends on our common stock of no more than 103% of the previous year's common stock dividend. We may return capital to Integrys Energy Group if our average financial common equity ratio is at least 51% on a calendar year basis. We must obtain PSCW approval if a return of capital would cause our average financial common equity ratio to fall below this level. Integrys Energy Group's right to receive dividends on our common stock is also subject to the prior rights of our preferred shareholders and to provisions in our restated articles of incorporation, which limit the amount of common stock dividends that we may pay if our common stock and common stock surplus accounts constitute less than 25% of our total capitalization. | |
Our short-term debt obligations contain financial and other covenants, including but not limited to, a requirement to maintain a debt to total capitalization ratio not to exceed 65%. Failure to comply with these covenants could result in an event of default, which could result in the acceleration of outstanding debt obligations. | |
As of September 30, 2014, our total restricted retained earnings were $493.9 million. Our equity in undistributed earnings of 50% or less owned investees accounted for by the equity method was $31.2 million at September 30, 2014. | |
Except for the restrictions described above and subject to applicable law, we do not have any other significant dividend restrictions. | |
Integrys Energy Group may provide equity contributions to us or request a return of capital from us in order to maintain utility common equity levels consistent with those allowed by the PSCW. Wisconsin law prohibits us from making loans to or guaranteeing obligations of Integrys Energy Group or its other subsidiaries. During the nine months ended September 30, 2014, we paid common stock dividends of $83.9 million to Integrys Energy Group and received $40.0 million of equity contributions from Integrys Energy Group. |
FAIR_VALUE
FAIR VALUE | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||||||||||
FAIR VALUE | ' | ||||||||||||||||||||||||
Fair Value | |||||||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||||||
A fair value measurement is required to reflect the assumptions market participants would use in pricing an asset or liability based on the best available information. These assumptions include the risks inherent in a particular valuation technique (such as a pricing model) and the risks inherent in the inputs to the model. | |||||||||||||||||||||||||
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). 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. | |||||||||||||||||||||||||
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 methodologies. | |||||||||||||||||||||||||
Level 3 - Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management's best estimate of fair value. | |||||||||||||||||||||||||
Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. | |||||||||||||||||||||||||
We determine fair value using a market-based approach that uses observable market inputs where available, and internally developed inputs only when observable market data is not readily available. For the unobservable inputs, consideration is given to the assumptions that market participants would use in valuing the asset or liability. These factors include not only the credit standing of the counterparties involved, but also the impact of our nonperformance risk on our liabilities. | |||||||||||||||||||||||||
We have established a risk oversight committee whose primary responsibility includes directly or indirectly ensuring that all valuation methods are applied in accordance with predefined policies. The development and maintenance of our forward price curves has been assigned to our risk management department, which is part of the corporate treasury function. This department is separate and distinct from the trading function. To validate the reasonableness of our fair value inputs, our risk management department compares changes in valuation and researches any significant differences in order to determine the underlying cause. Changes to the fair value inputs are made if necessary. | |||||||||||||||||||||||||
We conduct a thorough review of fair value hierarchy classifications on a quarterly basis. | |||||||||||||||||||||||||
The following tables show assets and liabilities that were accounted for at fair value on a recurring basis, categorized by level within the fair value hierarchy: | |||||||||||||||||||||||||
September 30, 2014 | |||||||||||||||||||||||||
(Millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||
Risk management assets | |||||||||||||||||||||||||
Natural gas contracts | $ | 0.8 | $ | 0.6 | $ | — | $ | 1.4 | |||||||||||||||||
Financial transmission rights (FTRs) | — | — | 3.4 | 3.4 | |||||||||||||||||||||
Coal contracts | — | — | 2.4 | 2.4 | |||||||||||||||||||||
Total | $ | 0.8 | $ | 0.6 | $ | 5.8 | $ | 7.2 | |||||||||||||||||
Risk management liabilities | |||||||||||||||||||||||||
Natural gas contracts | $ | 0.4 | $ | — | $ | — | $ | 0.4 | |||||||||||||||||
FTRs | — | — | 0.4 | 0.4 | |||||||||||||||||||||
Petroleum product contracts | 0.3 | — | — | 0.3 | |||||||||||||||||||||
Coal contracts | — | — | 2.4 | 2.4 | |||||||||||||||||||||
Total | $ | 0.7 | $ | — | $ | 2.8 | $ | 3.5 | |||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||
(Millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||
Risk management assets | |||||||||||||||||||||||||
Natural gas contracts | $ | 0.6 | $ | — | $ | — | $ | 0.6 | |||||||||||||||||
FTRs | — | — | 1.5 | 1.5 | |||||||||||||||||||||
Petroleum product contracts | 0.1 | — | — | 0.1 | |||||||||||||||||||||
Coal contracts | — | — | 0.2 | 0.2 | |||||||||||||||||||||
Total | $ | 0.7 | $ | — | $ | 1.7 | $ | 2.4 | |||||||||||||||||
Risk management liabilities | |||||||||||||||||||||||||
Natural gas contracts | $ | 0.1 | $ | — | $ | — | $ | 0.1 | |||||||||||||||||
FTRs | — | — | 0.3 | 0.3 | |||||||||||||||||||||
Coal contracts | — | — | 2.7 | 2.7 | |||||||||||||||||||||
Total | $ | 0.1 | $ | — | $ | 3 | $ | 3.1 | |||||||||||||||||
The risk management assets and liabilities listed in the tables above include NYMEX futures and options, financial contracts used to manage transmission congestion costs in the MISO market, and physical commodity contracts. NYMEX contracts are valued using the NYMEX end-of-day settlement price, which is a Level 1 input. Over-the-counter natural gas contracts are valued based on quoted market prices received from counterparties and are classified as Level 2. The valuation of physical coal contracts is categorized in Level 3 as it is based on significant assumptions made to extrapolate prices from the last quoted period through the end of the transaction term. The valuation of FTRs is derived from historical data from MISO, which is also considered a Level 3 input. See Note 5, Risk Management Activities, for more information. | |||||||||||||||||||||||||
There were no transfers between the levels of the fair value hierarchy during the three or nine months ended September 30, 2014, and 2013. | |||||||||||||||||||||||||
The amounts listed in the table below represent the range of unobservable inputs used in the valuations that individually had a significant impact on the fair value determination and caused a derivative to be classified as Level 3 at September 30, 2014: | |||||||||||||||||||||||||
Fair Value (Millions) | |||||||||||||||||||||||||
Assets | Liabilities | Valuation Technique | Unobservable Input | Average or Range | |||||||||||||||||||||
FTRs | $ | 3.4 | $ | 0.4 | Market-based | Forward market prices ($/megawatt-month) (1) | $187.89 | ||||||||||||||||||
Coal contracts | 2.4 | 2.4 | Market-based | Forward market prices ($/ton) (2) | $12.31 – $15.50 | ||||||||||||||||||||
(1) | Represents forward market prices developed using historical cleared pricing data from MISO. | ||||||||||||||||||||||||
(2) | Represents third-party forward market pricing. | ||||||||||||||||||||||||
Significant changes in historical settlement prices and forward coal prices would result in a directionally similar significant change in fair value. | |||||||||||||||||||||||||
The following tables set forth a reconciliation of changes in the fair value of items categorized as Level 3 measurements: | |||||||||||||||||||||||||
Three Months Ended September 30, 2014 | Nine Months Ended September 30, 2014 | ||||||||||||||||||||||||
(Millions) | FTRs | Coal Contracts | Total | FTRs | Coal Contracts | Total | |||||||||||||||||||
Balance at the beginning of period | $ | 4 | $ | 0.9 | $ | 4.9 | $ | 1.2 | $ | (2.5 | ) | $ | (1.3 | ) | |||||||||||
Net realized gains included in earnings | 0.2 | — | 0.2 | 1 | — | 1 | |||||||||||||||||||
Net unrealized gains (losses) recorded as regulatory assets or liabilities | 0.4 | (1.0 | ) | (0.6 | ) | 0.5 | 2 | 2.5 | |||||||||||||||||
Purchases | — | — | — | 4.3 | — | 4.3 | |||||||||||||||||||
Settlements | (1.6 | ) | 0.1 | (1.5 | ) | (4.0 | ) | 0.5 | (3.5 | ) | |||||||||||||||
Balance at the end of period | $ | 3 | $ | — | $ | 3 | $ | 3 | $ | — | $ | 3 | |||||||||||||
Three Months Ended September 30, 2013 | Nine Months Ended September 30, 2013 | ||||||||||||||||||||||||
(Millions) | FTRs | Coal Contracts | Total | FTRs | Coal Contracts | Total | |||||||||||||||||||
Balance at the beginning of period | $ | 2.1 | $ | (2.3 | ) | $ | (0.2 | ) | $ | 1.1 | $ | (6.5 | ) | $ | (5.4 | ) | |||||||||
Net realized gains included in earnings | 1.5 | — | 1.5 | 2.5 | — | 2.5 | |||||||||||||||||||
Net unrealized gains (losses) recorded as regulatory assets or liabilities | 0.8 | (4.5 | ) | (3.7 | ) | (0.3 | ) | 2.2 | 1.9 | ||||||||||||||||
Purchases | — | — | — | 3.2 | — | 3.2 | |||||||||||||||||||
Sales | — | — | — | (0.1 | ) | — | (0.1 | ) | |||||||||||||||||
Settlements | (2.6 | ) | 5.6 | 3 | (4.6 | ) | 3.1 | (1.5 | ) | ||||||||||||||||
Balance at the end of period | $ | 1.8 | $ | (1.2 | ) | $ | 0.6 | $ | 1.8 | $ | (1.2 | ) | $ | 0.6 | |||||||||||
Unrealized gains and losses on FTRs and coal contracts are deferred as regulatory assets or liabilities. Therefore, these fair value measurements have no impact on earnings. Realized gains and losses on FTRs, as well as the related transmission congestion costs, are recorded in cost of fuel, natural gas, and purchased power on the statements of income. | |||||||||||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||||||||||
The following table shows the financial instruments included on our balance sheets that are not recorded at fair value: | |||||||||||||||||||||||||
September 30, 2014 | 31-Dec-13 | ||||||||||||||||||||||||
(Millions) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||||||||||
Long-term debt | $ | 1,174.50 | $ | 1,250.10 | $ | 1,174.50 | $ | 1,176.50 | |||||||||||||||||
Long-term debt to parent | 5.7 | 6 | 6.3 | 7.1 | |||||||||||||||||||||
Preferred stock | 51.2 | 57.1 | 51.2 | 61.4 | |||||||||||||||||||||
The fair values of long-term debt are estimated based on the quoted market price for the same or similar issues, or on the current rates offered to us for debt of the same remaining maturity. The fair values of preferred stock are estimated based on quoted market prices, when available, or by using a perpetual dividend discount model. The fair values of long-term debt instruments and preferred stock are categorized within Level 2 of the fair value hierarchy. | |||||||||||||||||||||||||
Due to the short-term nature of cash and cash equivalents, accounts receivable, accounts payable, and outstanding commercial paper, the carrying amount for each such item approximates fair value. |
MISCELLANEOUS_INCOME
MISCELLANEOUS INCOME | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Other Income and Expenses [Abstract] | ' | ||||||||||||||||
MISCELLANEOUS INCOME | ' | ||||||||||||||||
Miscellaneous Income | |||||||||||||||||
Total miscellaneous income was as follows: | |||||||||||||||||
Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||
(Millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Equity portion of AFUDC | $ | 2.2 | $ | 2.9 | $ | 8.5 | $ | 6.6 | |||||||||
Earnings from equity method investments | 2.9 | 2.8 | 8.5 | 8.6 | |||||||||||||
Key executive life insurance for retired employees | 0.1 | 0.1 | 1.5 | 1 | |||||||||||||
Other | 0.4 | 0.2 | 1 | 0.7 | |||||||||||||
Total miscellaneous income | $ | 5.6 | $ | 6 | $ | 19.5 | $ | 16.9 | |||||||||
REGULATORY_ENVIRONMENT
REGULATORY ENVIRONMENT | 9 Months Ended |
Sep. 30, 2014 | |
Regulated Operations [Abstract] | ' |
REGULATORY ENVIRONMENT | ' |
Regulatory Environment | |
Wisconsin | |
2015 Rate Case | |
In April 2014, we filed an application with the PSCW to increase retail electric rates $76.8 million and to decrease natural gas rates $1.6 million, with rates expected to be effective January 1, 2015. Our request reflects a 10.60% return on common equity and a target common equity ratio of 50.51% in our regulatory capital structure. In May 2014, we filed our proposed electric and natural gas rate designs with the PSCW. These rate designs include significantly higher fixed charges, which better matches the related fixed costs of providing service. The PSCW is reviewing the new rate design as part of the rate-setting process. | |
The proposed retail electric rate increase is primarily driven by the completion of a partial refund to customers of the 2013 fuel cost over-collections in 2014 rates, which kept rates flat in 2014, as well as a reduction in refunds associated with decoupling. In 2015, fuel and purchased power costs are expected to increase, as are transmission costs and general inflation. The proposed retail electric rate increase also includes our request to recover deferred costs over four years related to the 2013 acquisition of the Fox Energy Center. Finally, capital costs associated with both previously approved environmental upgrades at the Columbia plant as well as our efforts to improve electric reliability by converting historically low performance overhead distribution lines to underground are also contributing to the requested increase in retail electric rates. The requested increase in retail electric rates was partially offset by the refund of a portion of the remaining 2013 fuel cost over-collections to customers. However, in July 2014, the PSCW authorized us to refund the remaining 2013 fuel cost over-collections to customers, all in 2014 rates, which differed from the original application to refund them in 2015 and 2016 rates. | |
The proposed retail natural gas rate decrease is being driven by 2013 decoupling over-collections, which will be refunded to customers in 2015. An increase in non-fuel operating and maintenance costs, including the impact of general inflation, and an increase in return on equity partially offset the effect of the 2013 decoupling over-collections. | |
In August 2014, the PSCW staff submitted testimony and recommended a rate increase of $28.7 million for retail electric and a rate decrease of $13.6 million for retail natural gas, which reflected a 10.20% return on common equity. PSCW staff recommended a common equity ratio of 50.27% for our regulatory capital structure. The PSCW held both technical and public hearings in September 2014. In October 2014, we issued an initial brief revising our requested retail electric rate increase to approximately $48 million. The requested retail natural gas rate decrease was also revised to a decrease of approximately $8 million. The revised request is lower than the initial application and is primarily driven by certain PSCW staff adjustments, but does not include adjustments for the contested issues of incentive compensation and the customer billing system project. The revised request reflects a 10.20% return on common equity and a common equity ratio of 50.27% in our regulatory capital structure. A final decision by the PSCW on the 2015 rates is expected before December 31, 2014. | |
2014 Rates | |
In December 2013, the PSCW issued a final written order, effective January 1, 2014. It authorized a net retail electric rate decrease of $12.8 million and a net retail natural gas rate increase of $4.0 million, reflecting a 10.20% return on common equity. The order also included a common equity ratio of 50.14% in our regulatory capital structure. The retail electric rate impact consisted of a rate increase, including recovery of the difference between the 2012 fuel refund and the 2013 rate increase discussed below, entirely offset by a portion of estimated fuel cost over-collections from customers in 2013. Retail electric rates were further decreased by 2012 decoupling over-collections to be returned to customers in 2014. The retail natural gas rate impact consisted of a rate decrease, which was more than offset by the positive impact of 2012 decoupling under-collections to be recovered from customers in 2014. Both the retail electric and retail natural gas rate changes included the recovery of pension and other employee benefit increases that were deferred in the 2013 rate case, as discussed below. The PSCW also authorized the recovery of prudently incurred 2014 environmental mitigation project costs related to compliance with a Consent Decree signed in January 2013 related to the Pulliam and Weston sites. See Note 9, Commitments and Contingencies, for more information. Additionally, the order required us to terminate our decoupling mechanism, beginning January 1, 2014. | |
2013 Rates | |
In December 2012, the PSCW issued a final written order, effective January 1, 2013. The order included a $28.5 million retail electric rate increase, partially offset by the 2012 fuel refund of $20.5 million. The difference between the 2012 fuel refund and the rate increase was deferred for recovery in 2014 rates. As a result, there was no change to customers' 2013 retail electric rates. The order also included a $3.4 million retail natural gas rate decrease. The order reflected a 10.30% return on common equity and a common equity ratio of 51.61% in our regulatory capital structure. The rate changes included deferrals of $7.3 million for retail electric and $2.1 million for retail natural gas of pension and other employee benefit costs that are being recovered in 2014 rates. In addition, we were authorized recovery of $5.9 million related to income tax amounts previously expensed due to the Federal Health Care Reform Act. As a result, this amount was recorded as a regulatory asset in 2012, and recovery from customers began in 2013. The order also authorized the recovery of direct Cross State Air Pollution Rule costs incurred through the end of 2012. Lastly, the order authorized us to switch from production tax credits to Section 1603 Grants for the Crane Creek wind project. | |
A decoupling mechanism for natural gas and electric residential and small commercial and industrial customers was approved on a pilot basis as part of the order. The mechanism was based on total rate case-approved margins, rather than being calculated on a per-customer basis. The mechanism did not cover all customer classes, and it included an annual $14.0 million cap for electric service and an annual $8.0 million cap for natural gas service. Amounts recoverable from or refundable to customers are subject to these caps. | |
Michigan | |
2015 Rate Case | |
In October 2014, we filed an application with the MPSC to increase retail electric rates $5.7 million, with interim rates expected to be effective in April 2015. Our request reflects a 10.60% return on common equity and a target common equity ratio of 50.48% in our regulatory capital structure. The proposed retail electric rate increase is primarily driven by the 2013 acquisition of the Fox Energy Center as well as other capital investments associated with the Crane Creek wind farm and environmental upgrades at generating plants. Expenses are expected to increase for line clearance, customer relations, uncollectible expenses, injuries and damages, and general inflation. The proposal includes annual rate increases to be implemented over a three-year period. |
SEGMENTS_OF_BUSINESS
SEGMENTS OF BUSINESS | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||||||||||
SEGMENTS OF BUSINESS | ' | ||||||||||||||||||||||||
Segments of Business | |||||||||||||||||||||||||
At September 30, 2014, we reported three segments. We manage our reportable segments separately due to their different operating and regulatory environments. Our principal business segments are our regulated electric utility operations and our regulated natural gas utility operations. Our other segment includes nonutility activities, as well as equity earnings from our investments in WRPC and WPS Investments, LLC, which holds an interest in ATC. | |||||||||||||||||||||||||
The tables below present information related to our reportable segments: | |||||||||||||||||||||||||
Regulated Utilities | |||||||||||||||||||||||||
(Millions) | Electric | Natural Gas Utility | Total | Other | Reconciling | WPS | |||||||||||||||||||
Utility | Utility | Eliminations | Consolidated | ||||||||||||||||||||||
Three Months Ended September 30, 2014 | |||||||||||||||||||||||||
External revenues | $ | 327.4 | $ | 43 | $ | 370.4 | $ | — | $ | — | $ | 370.4 | |||||||||||||
Intersegment revenues | — | 3.4 | 3.4 | 0.3 | (3.7 | ) | — | ||||||||||||||||||
Depreciation and amortization expense | 24.6 | 4.1 | 28.7 | 0.1 | (0.1 | ) | 28.7 | ||||||||||||||||||
Miscellaneous income | 2.1 | — | 2.1 | 3.5 | — | 5.6 | |||||||||||||||||||
Interest expense | 11.4 | 2.6 | 14 | 0.6 | — | 14.6 | |||||||||||||||||||
Provision (benefit) for income taxes | 27.3 | (2.3 | ) | 25 | 1 | — | 26 | ||||||||||||||||||
Preferred stock dividend requirements | (0.7 | ) | — | (0.7 | ) | — | — | (0.7 | ) | ||||||||||||||||
Net income (loss) attributed to common shareholder | 43.1 | (3.0 | ) | 40.1 | 2.1 | — | 42.2 | ||||||||||||||||||
Regulated Utilities | |||||||||||||||||||||||||
(Millions) | Electric | Natural Gas Utility | Total | Other | Reconciling | WPS | |||||||||||||||||||
Utility | Utility | Eliminations | Consolidated | ||||||||||||||||||||||
Three Months Ended September 30, 2013 | |||||||||||||||||||||||||
External revenues | $ | 331.7 | $ | 40.2 | $ | 371.9 | $ | — | $ | — | $ | 371.9 | |||||||||||||
Intersegment revenues | — | 4.1 | 4.1 | 0.5 | (4.6 | ) | — | ||||||||||||||||||
Depreciation and amortization expense | 23.6 | 3.9 | 27.5 | 0.2 | (0.1 | ) | 27.6 | ||||||||||||||||||
Miscellaneous income | 2.8 | — | 2.8 | 3.2 | — | 6 | |||||||||||||||||||
Interest expense | 7.9 | 2.1 | 10 | 0.7 | — | 10.7 | |||||||||||||||||||
Provision (benefit) for income taxes | 23.8 | (2.0 | ) | 21.8 | 1 | — | 22.8 | ||||||||||||||||||
Preferred stock dividend requirements | (0.6 | ) | (0.1 | ) | (0.7 | ) | — | — | (0.7 | ) | |||||||||||||||
Net income (loss) attributed to common shareholder | 38.3 | (3.0 | ) | 35.3 | 1.7 | — | 37 | ||||||||||||||||||
Regulated Utilities | |||||||||||||||||||||||||
(Millions) | Electric | Natural Gas Utility | Total | Other | Reconciling | WPS | |||||||||||||||||||
Utility | Utility | Eliminations | Consolidated | ||||||||||||||||||||||
Nine Months Ended September 30, 2014 | |||||||||||||||||||||||||
External revenues | $ | 940.2 | $ | 344.7 | $ | 1,284.90 | $ | — | $ | — | $ | 1,284.90 | |||||||||||||
Intersegment revenues | — | 10.5 | 10.5 | 1 | (11.5 | ) | — | ||||||||||||||||||
Depreciation and amortization expense | 72.3 | 12.2 | 84.5 | 0.5 | (0.4 | ) | 84.6 | ||||||||||||||||||
Miscellaneous income | 8.4 | 0.1 | 8.5 | 11 | — | 19.5 | |||||||||||||||||||
Interest expense | 33.5 | 7.8 | 41.3 | 1.6 | — | 42.9 | |||||||||||||||||||
Provision for income taxes | 52.5 | 11.2 | 63.7 | 3 | — | 66.7 | |||||||||||||||||||
Preferred stock dividend requirements | (2.0 | ) | (0.3 | ) | (2.3 | ) | — | — | (2.3 | ) | |||||||||||||||
Net income attributed to common shareholder | 85.2 | 17.6 | 102.8 | 6.8 | — | 109.6 | |||||||||||||||||||
Regulated Utilities | |||||||||||||||||||||||||
(Millions) | Electric | Natural Gas Utility | Total | Other | Reconciling | WPS | |||||||||||||||||||
Utility | Utility | Eliminations | Consolidated | ||||||||||||||||||||||
Nine Months Ended September 30, 2013 | |||||||||||||||||||||||||
External revenues | $ | 946 | $ | 227.1 | $ | 1,173.10 | $ | — | $ | — | $ | 1,173.10 | |||||||||||||
Intersegment revenues | — | 8.3 | 8.3 | 1.1 | (9.4 | ) | — | ||||||||||||||||||
Depreciation and amortization expense | 66.9 | 11.8 | 78.7 | 0.5 | (0.4 | ) | 78.8 | ||||||||||||||||||
Miscellaneous income | 6.5 | 0.1 | 6.6 | 10.3 | — | 16.9 | |||||||||||||||||||
Interest expense | 23.8 | 6.4 | 30.2 | 1.7 | — | 31.9 | |||||||||||||||||||
Provision for income taxes | 52.9 | 8.9 | 61.8 | 2.9 | — | 64.7 | |||||||||||||||||||
Preferred stock dividend requirements | (1.9 | ) | (0.4 | ) | (2.3 | ) | — | — | (2.3 | ) | |||||||||||||||
Net income attributed to common shareholder | 87.1 | 14.4 | 101.5 | 6 | — | 107.5 | |||||||||||||||||||
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Related Party Transactions [Abstract] | ' | ||||||||||||||||
RELATED PARTY TRANSACTIONS | ' | ||||||||||||||||
Related Party Transactions | |||||||||||||||||
We and our subsidiary, WPS Leasing, routinely enter into transactions with related parties, including Integrys Energy Group, its subsidiaries, and other entities in which we have material interests. | |||||||||||||||||
Effective January 1, 2014, after approval by the PSCW and other state commissions, a new affiliated interest agreement (Non-IBS AIA) went into effect and replaced certain prior agreements. It governs the provision and receipt of services by Integrys Energy Group subsidiaries, except that IBS will continue to provide services only under the existing IBS affiliated interest agreement (IBS AIA). Services under the Non-IBS AIA are subject to various pricing methodologies. All services provided by any regulated subsidiary to another regulated subsidiary are priced at cost. All services provided by any regulated subsidiary to any nonregulated subsidiary are priced at the greater of cost or fair market value. All services provided by any nonregulated subsidiary to any regulated subsidiary are priced at the lesser of cost or fair market value. All services provided by any regulated or nonregulated subsidiary to IBS are priced at cost. | |||||||||||||||||
We provide services to ATC for its transmission facilities under several agreements approved by the PSCW. Services are billed to ATC under this agreement at our fully allocated cost. | |||||||||||||||||
We provide services to WRPC under an operating agreement approved by the PSCW. We are also under a service agreement with WRPC under which either party may be a service provider. Services are billed to WRPC under these agreements at our fully allocated cost. | |||||||||||||||||
The table below includes information summarizing transactions entered into with related parties as of: | |||||||||||||||||
(Millions) | September 30, 2014 | 31-Dec-13 | |||||||||||||||
Notes payable * | |||||||||||||||||
Integrys Energy Group | $ | 5.7 | $ | 6.3 | |||||||||||||
Accounts Payable | |||||||||||||||||
ATC | 8.2 | 10.4 | |||||||||||||||
Liability related to income tax allocation | |||||||||||||||||
Integrys Energy Group | 6.2 | 6.7 | |||||||||||||||
* | WPS Leasing, our consolidated subsidiary, has a note payable to our parent company, Integrys Energy Group. At September 30, 2014, the current portion of the note payable was $2.1 million. | ||||||||||||||||
The following table shows activity associated with related party transactions: | |||||||||||||||||
Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||
(Millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Electric transactions | |||||||||||||||||
Sales to UPPCO (1) | $ | 4.1 | $ | 6.4 | $ | 15.3 | $ | 17.7 | |||||||||
Sales to Integrys Transportation Fuels, LLC | 0.1 | — | 0.1 | — | |||||||||||||
Natural gas transactions | |||||||||||||||||
Sales to IES | 0.3 | 0.1 | 0.5 | 0.3 | |||||||||||||
Purchases from IES | 0.1 | 0.2 | 2.5 | 0.6 | |||||||||||||
Interest expense (2) | |||||||||||||||||
Integrys Energy Group | 0.2 | 0.1 | 0.4 | 0.4 | |||||||||||||
Transactions with equity method investees | |||||||||||||||||
Charges from ATC for network transmission services | 24.7 | 24.6 | 74.2 | 73.8 | |||||||||||||
Charges to ATC for services and construction | 2.4 | 1.9 | 7.5 | 6 | |||||||||||||
Purchases of energy from WRPC | 0.9 | 1 | 3 | 3 | |||||||||||||
Charges to WRPC for operations | 0.3 | 0.2 | 1 | 0.7 | |||||||||||||
Equity earnings from WPS Investments, LLC (3) | 2.6 | 2.5 | 7.7 | 7.6 | |||||||||||||
(1) | Includes sales through the date of the sale of UPPCO in August 2014, by Integrys Energy Group. | ||||||||||||||||
(2) | WPS Leasing, our consolidated subsidiary, has a note payable to our parent company, Integrys Energy Group. | ||||||||||||||||
(3) | WPS Investments, LLC is a consolidated subsidiary of Integrys Energy Group that is jointly owned by Integrys Energy Group and us. At September 30, 2014, we had an 11.05% interest in WPS Investments accounted for under the equity method. Our ownership percentage has continued to decrease as additional equity contributions are made by Integrys Energy Group to WPS Investments. |
NEW_ACCOUNTING_PRONOUCEMENTS
NEW ACCOUNTING PRONOUCEMENTS | 9 Months Ended |
Sep. 30, 2014 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ' |
NEW ACCOUNTING PRONOUNCEMENTS | ' |
New Accounting Pronouncements | |
Recently Issued Accounting Guidance Not Yet Effective | |
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, "Revenue from Contracts with Customers." This ASU supersedes the revenue recognition requirements in Topic 605 of the FASB's Accounting Standards Codification and most industry-specific guidance throughout the Codification. The guidance is based on the principle that revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows from customer contracts. The guidance is effective for us for the reporting period ending March 31, 2017. The standard requires either retrospective application by restating each prior period presented in the financial statements, or modified retrospective application by recording the cumulative effect of prior reporting periods to beginning retained earnings in the year that the standard becomes effective. Management is currently evaluating the impact that the adoption of this standard will have on our financial statements. |
BASIS_OF_PRESENTATION_Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
Accounting policies | ' |
Consolidation | ' |
As used in these notes, the term "financial statements" refers to the condensed consolidated financial statements. This includes the condensed consolidated statements of income, condensed consolidated balance sheets, condensed consolidated statements of capitalization, and condensed consolidated statements of cash flows, unless otherwise noted. In this report, when we refer to "us," "we," "our," or "ours," we are referring to WPS. | |
Basis of accounting | ' |
We prepare our financial statements in conformity with the rules and regulations of the SEC for Quarterly Reports on Form 10-Q and in accordance with 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 consolidated financial statements and footnotes in our Annual Report on Form 10-K for the year ended December 31, 2013. Financial results for an interim period may not give a true indication of results for the year. | |
In management’s opinion, these unaudited financial statements include all adjustments necessary for a fair presentation of financial results. All adjustments are normal and recurring, unless otherwise noted. All intercompany transactions have been eliminated in consolidation. | |
Cash and cash equivalents | ' |
Short-term investments with an original maturity of three months or less are reported as cash equivalents. | |
Income taxes | ' |
We calculate our interim period provision for income taxes based on our projected annual effective tax rate as adjusted for certain discrete items. | |
Fair value measurements | ' |
A fair value measurement is required to reflect the assumptions market participants would use in pricing an asset or liability based on the best available information. These assumptions include the risks inherent in a particular valuation technique (such as a pricing model) and the risks inherent in the inputs to the model. | |
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). 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. | |
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 methodologies. | |
Level 3 - Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management's best estimate of fair value. | |
Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. | |
We determine fair value using a market-based approach that uses observable market inputs where available, and internally developed inputs only when observable market data is not readily available. For the unobservable inputs, consideration is given to the assumptions that market participants would use in valuing the asset or liability. These factors include not only the credit standing of the counterparties involved, but also the impact of our nonperformance risk on our liabilities. | |
We have established a risk oversight committee whose primary responsibility includes directly or indirectly ensuring that all valuation methods are applied in accordance with predefined policies. The development and maintenance of our forward price curves has been assigned to our risk management department, which is part of the corporate treasury function. This department is separate and distinct from the trading function. To validate the reasonableness of our fair value inputs, our risk management department compares changes in valuation and researches any significant differences in order to determine the underlying cause. Changes to the fair value inputs are made if necessary. | |
We conduct a thorough review of fair value hierarchy classifications on a quarterly basis. | |
New accounting pronouncements | ' |
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, "Revenue from Contracts with Customers." This ASU supersedes the revenue recognition requirements in Topic 605 of the FASB's Accounting Standards Codification and most industry-specific guidance throughout the Codification. The guidance is based on the principle that revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows from customer contracts. The guidance is effective for us for the reporting period ending March 31, 2017. The standard requires either retrospective application by restating each prior period presented in the financial statements, or modified retrospective application by recording the cumulative effect of prior reporting periods to beginning retained earnings in the year that the standard becomes effective. Management is currently evaluating the impact that the adoption of this standard will have on our financial statements. | |
Information related to share based awards | ' |
Stock-based compensation | ' |
Stock options | ' |
Information related to share based awards | ' |
Stock-based compensation | ' |
The fair value of stock option awards granted is estimated using a binomial lattice model. The expected term of option awards is derived from the output of the binomial lattice model and represents the period of time that options are expected to be outstanding. The risk-free interest rate is based on the United States Treasury yield curve. The expected dividend yield incorporates the current and historical dividend rate of Integrys Energy Group's common stock. The expected stock price volatility is estimated using its 10-year historical volatility. | |
Performance stock rights | ' |
Information related to share based awards | ' |
Stock-based compensation | ' |
The fair values of performance stock rights are estimated using a Monte Carlo valuation model. The risk-free interest rate is based on the United States Treasury yield curve. The expected dividend yield incorporates the current and historical dividend rate of Integrys Energy Group's common stock. The expected volatility is estimated using one to three years of historical data. |
ACQUISITION_OF_FOX_ENERGY_CENT1
ACQUISITION OF FOX ENERGY CENTER (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Business Combinations [Abstract] | ' | ||||
Schedule of purchase price allocation | ' | ||||
The purchase price was allocated based on the estimated fair values of the assets acquired and the liabilities assumed at the date of acquisition, as follows: | |||||
(Millions) | |||||
Assets acquired (1) | |||||
Inventories - materials and supplies | $ | 3 | |||
Other current assets | 0.4 | ||||
Property, plant, and equipment | 374.4 | ||||
Other long-term assets (2) | 15.6 | ||||
Total assets acquired | $ | 393.4 | |||
Liabilities assumed | |||||
Accounts payable | $ | 1.8 | |||
Total liabilities assumed | $ | 1.8 | |||
(1) | Relates to the electric utility segment. | ||||
(2) | Intangible assets recorded for contractual services agreements. See Note 6, Goodwill and Other Intangible Assets, for more information. |
RISK_MANAGEMENT_ACTIVITIES_Tab
RISK MANAGEMENT ACTIVITIES (Tables) | 9 Months Ended | ||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ||||||||||||||||||
Assets and liabilities from risk management activities | ' | ||||||||||||||||||
The tables below show our assets and liabilities from risk management activities: | |||||||||||||||||||
September 30, 2014 | |||||||||||||||||||
(Millions) | Balance Sheet Presentation * | Assets | Liabilities | ||||||||||||||||
Natural gas contracts | Other Current | $ | 1.4 | $ | 0.4 | ||||||||||||||
FTRs | Other Current | 3.4 | 0.4 | ||||||||||||||||
Petroleum product contracts | Other Current | — | 0.3 | ||||||||||||||||
Coal contracts | Other Current | — | 2.3 | ||||||||||||||||
Coal contracts | Other Long-term | 2.4 | 0.1 | ||||||||||||||||
Other Current | 4.8 | 3.4 | |||||||||||||||||
Other Long-term | 2.4 | 0.1 | |||||||||||||||||
Total | $ | 7.2 | $ | 3.5 | |||||||||||||||
* | We classify assets and liabilities from risk management activities as current or long-term based upon the maturities of the underlying contracts. | ||||||||||||||||||
December 31, 2013 | |||||||||||||||||||
(Millions) | Balance Sheet Presentation * | Assets | Liabilities | ||||||||||||||||
Natural gas contracts | Other Current | $ | 0.6 | $ | 0.1 | ||||||||||||||
FTRs | Other Current | 1.5 | 0.3 | ||||||||||||||||
Petroleum product contracts | Other Current | 0.1 | — | ||||||||||||||||
Coal contracts | Other Current | — | 1.9 | ||||||||||||||||
Coal contracts | Other Long-term | 0.2 | 0.8 | ||||||||||||||||
Other Current | 2.2 | 2.3 | |||||||||||||||||
Other Long-term | 0.2 | 0.8 | |||||||||||||||||
Total | $ | 2.4 | $ | 3.1 | |||||||||||||||
* | We classify assets and liabilities from risk management activities as current or long-term based upon the maturities of the underlying contracts. | ||||||||||||||||||
Potential effect of netting arrangements for recognized derivative assets and liabilities | ' | ||||||||||||||||||
The following tables show the potential effect on our financial position of netting arrangements for recognized derivative assets and liabilities: | |||||||||||||||||||
September 30, 2014 | |||||||||||||||||||
(Millions) | Gross Amount | Potential Effects of Netting, Including Cash Collateral | Net Amount | ||||||||||||||||
Derivative assets subject to master netting or similar arrangements | $ | 4.8 | $ | 1.1 | $ | 3.7 | |||||||||||||
Derivative assets not subject to master netting or similar arrangements | 2.4 | 2.4 | |||||||||||||||||
Total risk management assets | $ | 7.2 | $ | 6.1 | |||||||||||||||
Derivative liabilities subject to master netting or similar arrangements | $ | 1.1 | $ | 1.1 | $ | — | |||||||||||||
Derivative liabilities not subject to master netting or similar arrangements | 2.4 | 2.4 | |||||||||||||||||
Total risk management liabilities | $ | 3.5 | $ | 2.4 | |||||||||||||||
31-Dec-13 | |||||||||||||||||||
(Millions) | Gross Amount | Potential Effects of Netting, Including Cash Collateral | Net Amount | ||||||||||||||||
Derivative assets subject to master netting or similar arrangements | $ | 2.2 | $ | 0.6 | $ | 1.6 | |||||||||||||
Derivative assets not subject to master netting or similar arrangements | 0.2 | 0.2 | |||||||||||||||||
Total risk management assets | $ | 2.4 | $ | 1.8 | |||||||||||||||
Derivative liabilities subject to master netting or similar arrangements | $ | 0.4 | $ | 0.4 | $ | — | |||||||||||||
Derivative liabilities not subject to master netting or similar arrangements | 2.7 | 2.7 | |||||||||||||||||
Total risk management liabilities | $ | 3.1 | $ | 2.7 | |||||||||||||||
Cash collateral positions | ' | ||||||||||||||||||
The following table shows our cash collateral positions: | |||||||||||||||||||
(Millions) | September 30, 2014 | 31-Dec-13 | |||||||||||||||||
Cash collateral provided to others related to contracts under master netting or similar arrangements * | $ | 4.3 | $ | 3.1 | |||||||||||||||
Cash collateral received from others related to contracts under master netting or similar arrangements * | — | 0.2 | |||||||||||||||||
* | Cash collateral provided to others is reflected in other current assets and cash collateral received from others is reflected in other current liabilities on the balance sheets. | ||||||||||||||||||
Unrealized gains (losses) recorded related to non-hedge derivatives | ' | ||||||||||||||||||
The following table shows the unrealized gains (losses) recorded related to derivative contracts: | |||||||||||||||||||
Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||||
(Millions) | Financial Statement Presentation | 2014 | 2013 | 2014 | 2013 | ||||||||||||||
Natural gas | Balance Sheet — Regulatory assets (current) | $ | (0.3 | ) | $ | (0.2 | ) | $ | (0.4 | ) | $ | 0.3 | |||||||
Natural gas | Balance Sheet — Regulatory liabilities (current) | 0.5 | — | 0.4 | (0.1 | ) | |||||||||||||
FTRs | Balance Sheet — Regulatory assets (current) | 0.7 | 0.8 | (0.2 | ) | — | |||||||||||||
FTRs | Balance Sheet — Regulatory liabilities (current) | (0.3 | ) | — | 0.7 | (0.3 | ) | ||||||||||||
Petroleum | Balance Sheet — Regulatory assets (current) | (0.4 | ) | 0.1 | (0.4 | ) | — | ||||||||||||
Petroleum | Balance Sheet — Regulatory liabilities (current) | (0.1 | ) | — | (0.1 | ) | — | ||||||||||||
Petroleum | Income Statement — Operating and maintenance expense | — | (0.1 | ) | — | (0.1 | ) | ||||||||||||
Coal | Balance Sheet — Regulatory assets (current) | (0.9 | ) | (0.6 | ) | (1.0 | ) | 2.1 | |||||||||||
Coal | Balance Sheet — Regulatory assets (long-term) | 0.1 | 0.2 | 0.7 | 4.2 | ||||||||||||||
Coal | Balance Sheet — Regulatory liabilities (current) | — | — | — | (0.3 | ) | |||||||||||||
Coal | Balance Sheet — Regulatory liabilities (long-term) | (0.2 | ) | 1.5 | 2.3 | (0.7 | ) | ||||||||||||
Notional volumes of outstanding non-hedge derivative contracts | ' | ||||||||||||||||||
We had the following notional volumes of outstanding derivative contracts: | |||||||||||||||||||
(Millions) | September 30, 2014 | 31-Dec-13 | |||||||||||||||||
Commodity | Purchases | Sales | Other Transactions | Purchases | Sales | Other Transactions | |||||||||||||
Natural gas (therms) | 1,479.90 | — | N/A | 2,242.50 | 7 | N/A | |||||||||||||
FTRs (kilowatt-hours) | N/A | N/A | 5,644.00 | N/A | N/A | 3,427.00 | |||||||||||||
Petroleum products (barrels) | 0.1 | — | N/A | 0.1 | — | N/A | |||||||||||||
Coal contract (tons) | 3.4 | — | N/A | 4.8 | — | N/A | |||||||||||||
GOODWILL_AND_OTHER_INTANGIBLE_1
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||||||||||||
Schedule of identifiable intangible assets other than goodwill | ' | ||||||||||||||||||||||||
Our intangible assets listed below consist of contractual service agreements that provide for major maintenance and protection against unforeseen maintenance costs related to the combustion turbine generators at the Fox Energy Center. These contractual service agreements were included in other long-term assets on the balance sheets. | |||||||||||||||||||||||||
September 30, 2014 | December 31, 2013 | ||||||||||||||||||||||||
(Millions) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||
Amortized intangible assets | |||||||||||||||||||||||||
Contractual service agreements | $ | 15.6 | $ | (3.5 | ) | $ | 12.1 | $ | 15.6 | $ | (1.8 | ) | $ | 13.8 | |||||||||||
Schedule of intangible asset amortization expense | ' | ||||||||||||||||||||||||
The table below shows our amortization expense recognized in the statements of income: | |||||||||||||||||||||||||
Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||||||||||
(Millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
Amortization recorded in depreciation and amortization expense | $ | 0.5 | $ | 0.6 | $ | 1.7 | $ | 1.2 | |||||||||||||||||
Schedule of intangible asset amortization expense for the next five years | ' | ||||||||||||||||||||||||
The following table shows our estimated amortization expense for the next five years, including amounts recorded through September 30, 2014: | |||||||||||||||||||||||||
For the Year Ending December 31 | |||||||||||||||||||||||||
(Millions) | 2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||||||
Amortization to be recorded in depreciation and amortization expense | $ | 2.2 | $ | 2.2 | $ | 2.2 | $ | 1.7 | $ | 1.2 | |||||||||||||||
Amortization to be recorded in regulatory assets | 0.3 | 1 | 1 | 0.5 | — | ||||||||||||||||||||
SHORTTERM_DEBT_AND_LINES_OF_CR1
SHORT-TERM DEBT AND LINES OF CREDIT (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Short-term Debt [Abstract] | ' | ||||||||||
Schedule of short-term borrowings | ' | ||||||||||
Our outstanding short-term borrowings were as follows: | |||||||||||
(Millions, except percentages) | September 30, 2014 | 31-Dec-13 | |||||||||
Commercial paper | $ | 63 | $ | 25.6 | |||||||
Average interest rate on commercial paper | 0.18 | % | 0.14 | % | |||||||
Schedule of revolving credit facilities and remaining available capacity | ' | ||||||||||
The information in the table below relates to our revolving credit facilities used to support our commercial paper borrowing program, including remaining available capacity under these facilities: | |||||||||||
(Millions) | Maturity | September 30, 2014 | 31-Dec-13 | ||||||||
Revolving credit facility (1) | 5/17/14 | $ | — | $ | 135 | ||||||
Revolving credit facility (2) | 5/7/15 | 135 | — | ||||||||
Revolving credit facility | 6/13/17 | 115 | 115 | ||||||||
Total short-term credit capacity | $ | 250 | $ | 250 | |||||||
Less: | |||||||||||
Commercial paper outstanding | 63 | 25.6 | |||||||||
Available capacity under existing agreements | $ | 187 | $ | 224.4 | |||||||
(1) | This credit facility was terminated and replaced with a new credit facility in May 2014. | ||||||||||
(2) | We requested approval from the PSCW to extend this facility through May 8, 2019. |
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||
Schedule of effective tax rates | ' | ||||||||||||
The table below shows our effective tax rates: | |||||||||||||
Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
Effective tax rate | 37.7 | % | 37.7 | % | 37.3 | % | 37.1 | % |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||||||||||||||||||||||||||||
Schedule of minimum future commitments related to purchase obligations | ' | ||||||||||||||||||||||||||||||
The following table shows our minimum future commitments related to these purchase obligations as of September 30, 2014. | |||||||||||||||||||||||||||||||
Payments Due By Period | |||||||||||||||||||||||||||||||
(Millions) | Year Contracts Extend Through | Total Amounts Committed | 2014 | 2015 | 2016 | 2017 | 2018 | Later Years | |||||||||||||||||||||||
Electric utility | |||||||||||||||||||||||||||||||
Purchased power | 2029 | $ | 944 | $ | 19.1 | $ | 118.9 | $ | 42.3 | $ | 52.8 | $ | 55.8 | $ | 655.1 | ||||||||||||||||
Coal supply and transportation | 2018 | 124.9 | 15.6 | 45.1 | 21.1 | 22.2 | 20.9 | — | |||||||||||||||||||||||
Natural gas utility supply and transportation | 2024 | 255.6 | 12.1 | 45.4 | 43.4 | 43 | 42.5 | 69.2 | |||||||||||||||||||||||
Total | $ | 1,324.50 | $ | 46.8 | $ | 209.4 | $ | 106.8 | $ | 118 | $ | 119.2 | $ | 724.3 | |||||||||||||||||
EMPLOYEE_BENEFIT_PLANS_Tables
EMPLOYEE BENEFIT PLANS (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | ||||||||||||||||||||||||||||||||
Schedule of the components of net periodic benefit cost | ' | ||||||||||||||||||||||||||||||||
The following table shows the components of net periodic benefit cost (including amounts capitalized to our balance sheets) for our benefit plans: | |||||||||||||||||||||||||||||||||
Pension Benefits | Other Postretirement Benefits | ||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||
30-Sep | 30-Sep | 30-Sep | 30-Sep | ||||||||||||||||||||||||||||||
(Millions) | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||
Service cost | $ | 2.2 | $ | 2.7 | $ | 6.5 | $ | 8.1 | $ | 1.9 | $ | 2.6 | $ | 5.8 | $ | 7.9 | |||||||||||||||||
Interest cost | 8.6 | 7.6 | 25.8 | 22.9 | 2.7 | 3.4 | 8.8 | 10.1 | |||||||||||||||||||||||||
Expected return on plan assets | (16.0 | ) | (14.3 | ) | (48.0 | ) | (42.9 | ) | (4.0 | ) | (3.7 | ) | (12.0 | ) | (11.1 | ) | |||||||||||||||||
Loss on plan settlement | — | — | 0.4 | — | — | — | — | — | |||||||||||||||||||||||||
Amortization of prior service cost (credit) | 0.1 | 0.9 | 0.4 | 2.7 | (2.3 | ) | (0.6 | ) | (5.7 | ) | (1.6 | ) | |||||||||||||||||||||
Amortization of net actuarial losses | 3.7 | 6 | 11.2 | 18 | 0.7 | 1.9 | 2 | 5.6 | |||||||||||||||||||||||||
Net periodic benefit cost (credit) | $ | (1.4 | ) | $ | 2.9 | $ | (3.7 | ) | $ | 8.8 | $ | (1.0 | ) | $ | 3.6 | $ | (1.1 | ) | $ | 10.9 | |||||||||||||
STOCKBASED_COMPENSATION_Tables
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||
Schedule of stock-based compensation expense and the related deferred tax benefit recognized in income | ' | ||||||||||||||||
The following table reflects the stock-based compensation expense and the related deferred income tax benefit recognized in income for the three and nine months ended September 30: | |||||||||||||||||
Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||
(Millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Stock options | $ | 0.1 | $ | 0.2 | $ | 0.4 | $ | 0.5 | |||||||||
Performance stock rights | 0.1 | 0.4 | 3.9 | 1.7 | |||||||||||||
Restricted share units | 0.7 | 0.8 | 2.7 | 2.6 | |||||||||||||
Total stock-based compensation expense | $ | 0.9 | $ | 1.4 | $ | 7 | $ | 4.8 | |||||||||
Deferred income tax benefit | $ | 0.4 | $ | 0.6 | $ | 2.8 | $ | 1.9 | |||||||||
Schedule of the assumptions incorporated into the valuation of stock options granted | ' | ||||||||||||||||
The following table shows the assumptions incorporated into the valuation model: | |||||||||||||||||
February 2014 Grant | |||||||||||||||||
Expected term | 8 years | ||||||||||||||||
Risk-free interest rate | 0.12% – 2.88% | ||||||||||||||||
Expected dividend yield | 5.28% | ||||||||||||||||
Expected volatility | 18% | ||||||||||||||||
Summary of stock option activity and information related to outstanding and exercisable stock options | ' | ||||||||||||||||
A summary of stock option activity for the nine months ended September 30, 2014, and information related to outstanding and exercisable stock options at September 30, 2014, is presented below: | |||||||||||||||||
Stock Options | Weighted-Average | Weighted-Average | Aggregate | ||||||||||||||
Exercise Price Per | Remaining Contractual | Intrinsic Value | |||||||||||||||
Share | Life (in Years) | (Millions) | |||||||||||||||
Outstanding at December 31, 2013 | 49,993 | $ | 53.03 | ||||||||||||||
Granted | 13,890 | 55.23 | |||||||||||||||
Exercised | (17,333 | ) | 51.48 | ||||||||||||||
Outstanding at September 30, 2014 | 46,550 | $ | 54.26 | 8.2 | $ | 0.5 | |||||||||||
Exercisable at September 30, 2014 | 9,270 | $ | 52.15 | 7.2 | $ | 0.1 | |||||||||||
Schedule of assumptions incorporated into the valuation models for performance stock rights | ' | ||||||||||||||||
The table below reflects the assumptions used in the valuation of the outstanding grants at September 30: | |||||||||||||||||
2014 | |||||||||||||||||
Risk-free interest rate | 0.06% – 0.60% | ||||||||||||||||
Expected dividend yield | 5.28% – 5.33% | ||||||||||||||||
Expected volatility | 17% – 23% | ||||||||||||||||
Information related to share based awards | ' | ||||||||||||||||
Summary of activity related to restricted share unit awards (equity and liability awards) | ' | ||||||||||||||||
A summary of the activity related to all restricted share unit awards (equity and liability awards) for the nine months ended September 30, 2014, is presented below: | |||||||||||||||||
Restricted Share | Weighted-Average | ||||||||||||||||
Unit Awards | Grant Date Fair Value | ||||||||||||||||
Outstanding at December 31, 2013 | 67,741 | $ | 52.06 | ||||||||||||||
Granted | 28,725 | 55.23 | |||||||||||||||
Dividend equivalents | 2,262 | 54.46 | |||||||||||||||
Vested and released | (28,325 | ) | 49.5 | ||||||||||||||
Transfers | 332 | 54.55 | |||||||||||||||
Forfeited | (804 | ) | 54.64 | ||||||||||||||
Outstanding at September 30, 2014 | 69,931 | $ | 54.46 | ||||||||||||||
Performance Stock Rights Accounted for as Equity Awards | ' | ||||||||||||||||
Information related to share based awards | ' | ||||||||||||||||
Summary of the activity related to performance stock rights | ' | ||||||||||||||||
A summary of the activity for the nine months ended September 30, 2014, related to performance stock rights accounted for as equity awards is presented below: | |||||||||||||||||
Performance | Weighted-Average | ||||||||||||||||
Stock Rights | Fair Value (2) | ||||||||||||||||
Outstanding at December 31, 2013 | 5,561 | $ | 45.16 | ||||||||||||||
Granted | 1,113 | 44.28 | |||||||||||||||
Award modifications (1) | 2,295 | 85.09 | |||||||||||||||
Adjustment for shares not distributed | (3,347 | ) | 41.9 | ||||||||||||||
Outstanding at September 30, 2014 | 5,622 | $ | 63.23 | ||||||||||||||
(1) | Six months prior to the end of the performance period, employees can no longer change their election to defer the value of their performance stock rights into the deferred compensation plan. As a result, any awards not elected for deferral at this point in the performance period will be settled in Integrys Energy Group's common stock. This changes the classification of these awards from a liability award to an equity award. The change in classification is accounted for as an award modification. | ||||||||||||||||
(2) | Reflects the weighted-average fair value used to measure equity awards. Equity awards are measured using the grant date fair value or the fair value on the modification date. | ||||||||||||||||
Performance Stock Rights Accounted for as Liability Awards | ' | ||||||||||||||||
Information related to share based awards | ' | ||||||||||||||||
Summary of the activity related to performance stock rights | ' | ||||||||||||||||
A summary of the activity for the nine months ended September 30, 2014, related to performance stock rights accounted for as liability awards is presented below: | |||||||||||||||||
Performance | |||||||||||||||||
Stock Rights | |||||||||||||||||
Outstanding at December 31, 2013 | 9,222 | ||||||||||||||||
Granted | 4,440 | ||||||||||||||||
Award modifications * | (2,295 | ) | |||||||||||||||
Adjustment for shares not distributed | (379 | ) | |||||||||||||||
Outstanding at September 30, 2014 | 10,988 | ||||||||||||||||
FAIR_VALUE_Tables
FAIR VALUE (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||||||||||
Fair value of assets and liabilities measured on a recurring basis, categorized by level within the fair value hierarchy | ' | ||||||||||||||||||||||||
The following tables show assets and liabilities that were accounted for at fair value on a recurring basis, categorized by level within the fair value hierarchy: | |||||||||||||||||||||||||
September 30, 2014 | |||||||||||||||||||||||||
(Millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||
Risk management assets | |||||||||||||||||||||||||
Natural gas contracts | $ | 0.8 | $ | 0.6 | $ | — | $ | 1.4 | |||||||||||||||||
Financial transmission rights (FTRs) | — | — | 3.4 | 3.4 | |||||||||||||||||||||
Coal contracts | — | — | 2.4 | 2.4 | |||||||||||||||||||||
Total | $ | 0.8 | $ | 0.6 | $ | 5.8 | $ | 7.2 | |||||||||||||||||
Risk management liabilities | |||||||||||||||||||||||||
Natural gas contracts | $ | 0.4 | $ | — | $ | — | $ | 0.4 | |||||||||||||||||
FTRs | — | — | 0.4 | 0.4 | |||||||||||||||||||||
Petroleum product contracts | 0.3 | — | — | 0.3 | |||||||||||||||||||||
Coal contracts | — | — | 2.4 | 2.4 | |||||||||||||||||||||
Total | $ | 0.7 | $ | — | $ | 2.8 | $ | 3.5 | |||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||
(Millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||
Risk management assets | |||||||||||||||||||||||||
Natural gas contracts | $ | 0.6 | $ | — | $ | — | $ | 0.6 | |||||||||||||||||
FTRs | — | — | 1.5 | 1.5 | |||||||||||||||||||||
Petroleum product contracts | 0.1 | — | — | 0.1 | |||||||||||||||||||||
Coal contracts | — | — | 0.2 | 0.2 | |||||||||||||||||||||
Total | $ | 0.7 | $ | — | $ | 1.7 | $ | 2.4 | |||||||||||||||||
Risk management liabilities | |||||||||||||||||||||||||
Natural gas contracts | $ | 0.1 | $ | — | $ | — | $ | 0.1 | |||||||||||||||||
FTRs | — | — | 0.3 | 0.3 | |||||||||||||||||||||
Coal contracts | — | — | 2.7 | 2.7 | |||||||||||||||||||||
Total | $ | 0.1 | $ | — | $ | 3 | $ | 3.1 | |||||||||||||||||
Significant internally-developed unobservable inputs used in the valuation of derivatives categorized in Level 3 | ' | ||||||||||||||||||||||||
The amounts listed in the table below represent the range of unobservable inputs used in the valuations that individually had a significant impact on the fair value determination and caused a derivative to be classified as Level 3 at September 30, 2014: | |||||||||||||||||||||||||
Fair Value (Millions) | |||||||||||||||||||||||||
Assets | Liabilities | Valuation Technique | Unobservable Input | Average or Range | |||||||||||||||||||||
FTRs | $ | 3.4 | $ | 0.4 | Market-based | Forward market prices ($/megawatt-month) (1) | $187.89 | ||||||||||||||||||
Coal contracts | 2.4 | 2.4 | Market-based | Forward market prices ($/ton) (2) | $12.31 – $15.50 | ||||||||||||||||||||
(1) | Represents forward market prices developed using historical cleared pricing data from MISO. | ||||||||||||||||||||||||
(2) | Represents third-party forward market pricing. | ||||||||||||||||||||||||
Reconciliation of changes in the fair value of items categorized as Level 3 measurements | ' | ||||||||||||||||||||||||
The following tables set forth a reconciliation of changes in the fair value of items categorized as Level 3 measurements: | |||||||||||||||||||||||||
Three Months Ended September 30, 2014 | Nine Months Ended September 30, 2014 | ||||||||||||||||||||||||
(Millions) | FTRs | Coal Contracts | Total | FTRs | Coal Contracts | Total | |||||||||||||||||||
Balance at the beginning of period | $ | 4 | $ | 0.9 | $ | 4.9 | $ | 1.2 | $ | (2.5 | ) | $ | (1.3 | ) | |||||||||||
Net realized gains included in earnings | 0.2 | — | 0.2 | 1 | — | 1 | |||||||||||||||||||
Net unrealized gains (losses) recorded as regulatory assets or liabilities | 0.4 | (1.0 | ) | (0.6 | ) | 0.5 | 2 | 2.5 | |||||||||||||||||
Purchases | — | — | — | 4.3 | — | 4.3 | |||||||||||||||||||
Settlements | (1.6 | ) | 0.1 | (1.5 | ) | (4.0 | ) | 0.5 | (3.5 | ) | |||||||||||||||
Balance at the end of period | $ | 3 | $ | — | $ | 3 | $ | 3 | $ | — | $ | 3 | |||||||||||||
Three Months Ended September 30, 2013 | Nine Months Ended September 30, 2013 | ||||||||||||||||||||||||
(Millions) | FTRs | Coal Contracts | Total | FTRs | Coal Contracts | Total | |||||||||||||||||||
Balance at the beginning of period | $ | 2.1 | $ | (2.3 | ) | $ | (0.2 | ) | $ | 1.1 | $ | (6.5 | ) | $ | (5.4 | ) | |||||||||
Net realized gains included in earnings | 1.5 | — | 1.5 | 2.5 | — | 2.5 | |||||||||||||||||||
Net unrealized gains (losses) recorded as regulatory assets or liabilities | 0.8 | (4.5 | ) | (3.7 | ) | (0.3 | ) | 2.2 | 1.9 | ||||||||||||||||
Purchases | — | — | — | 3.2 | — | 3.2 | |||||||||||||||||||
Sales | — | — | — | (0.1 | ) | — | (0.1 | ) | |||||||||||||||||
Settlements | (2.6 | ) | 5.6 | 3 | (4.6 | ) | 3.1 | (1.5 | ) | ||||||||||||||||
Balance at the end of period | $ | 1.8 | $ | (1.2 | ) | $ | 0.6 | $ | 1.8 | $ | (1.2 | ) | $ | 0.6 | |||||||||||
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 are not recorded at fair value: | |||||||||||||||||||||||||
September 30, 2014 | 31-Dec-13 | ||||||||||||||||||||||||
(Millions) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||||||||||
Long-term debt | $ | 1,174.50 | $ | 1,250.10 | $ | 1,174.50 | $ | 1,176.50 | |||||||||||||||||
Long-term debt to parent | 5.7 | 6 | 6.3 | 7.1 | |||||||||||||||||||||
Preferred stock | 51.2 | 57.1 | 51.2 | 61.4 | |||||||||||||||||||||
MISCELLANEOUS_INCOME_Tables
MISCELLANEOUS INCOME (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Other Income and Expenses [Abstract] | ' | ||||||||||||||||
Schedule of Other Nonoperating Income (Expense) | ' | ||||||||||||||||
Total miscellaneous income was as follows: | |||||||||||||||||
Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||
(Millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Equity portion of AFUDC | $ | 2.2 | $ | 2.9 | $ | 8.5 | $ | 6.6 | |||||||||
Earnings from equity method investments | 2.9 | 2.8 | 8.5 | 8.6 | |||||||||||||
Key executive life insurance for retired employees | 0.1 | 0.1 | 1.5 | 1 | |||||||||||||
Other | 0.4 | 0.2 | 1 | 0.7 | |||||||||||||
Total miscellaneous income | $ | 5.6 | $ | 6 | $ | 19.5 | $ | 16.9 | |||||||||
SEGMENTS_OF_BUSINESS_Tables
SEGMENTS OF BUSINESS (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||||||||||
Schedule of information related to reportable segments | ' | ||||||||||||||||||||||||
The tables below present information related to our reportable segments: | |||||||||||||||||||||||||
Regulated Utilities | |||||||||||||||||||||||||
(Millions) | Electric | Natural Gas Utility | Total | Other | Reconciling | WPS | |||||||||||||||||||
Utility | Utility | Eliminations | Consolidated | ||||||||||||||||||||||
Three Months Ended September 30, 2014 | |||||||||||||||||||||||||
External revenues | $ | 327.4 | $ | 43 | $ | 370.4 | $ | — | $ | — | $ | 370.4 | |||||||||||||
Intersegment revenues | — | 3.4 | 3.4 | 0.3 | (3.7 | ) | — | ||||||||||||||||||
Depreciation and amortization expense | 24.6 | 4.1 | 28.7 | 0.1 | (0.1 | ) | 28.7 | ||||||||||||||||||
Miscellaneous income | 2.1 | — | 2.1 | 3.5 | — | 5.6 | |||||||||||||||||||
Interest expense | 11.4 | 2.6 | 14 | 0.6 | — | 14.6 | |||||||||||||||||||
Provision (benefit) for income taxes | 27.3 | (2.3 | ) | 25 | 1 | — | 26 | ||||||||||||||||||
Preferred stock dividend requirements | (0.7 | ) | — | (0.7 | ) | — | — | (0.7 | ) | ||||||||||||||||
Net income (loss) attributed to common shareholder | 43.1 | (3.0 | ) | 40.1 | 2.1 | — | 42.2 | ||||||||||||||||||
Regulated Utilities | |||||||||||||||||||||||||
(Millions) | Electric | Natural Gas Utility | Total | Other | Reconciling | WPS | |||||||||||||||||||
Utility | Utility | Eliminations | Consolidated | ||||||||||||||||||||||
Three Months Ended September 30, 2013 | |||||||||||||||||||||||||
External revenues | $ | 331.7 | $ | 40.2 | $ | 371.9 | $ | — | $ | — | $ | 371.9 | |||||||||||||
Intersegment revenues | — | 4.1 | 4.1 | 0.5 | (4.6 | ) | — | ||||||||||||||||||
Depreciation and amortization expense | 23.6 | 3.9 | 27.5 | 0.2 | (0.1 | ) | 27.6 | ||||||||||||||||||
Miscellaneous income | 2.8 | — | 2.8 | 3.2 | — | 6 | |||||||||||||||||||
Interest expense | 7.9 | 2.1 | 10 | 0.7 | — | 10.7 | |||||||||||||||||||
Provision (benefit) for income taxes | 23.8 | (2.0 | ) | 21.8 | 1 | — | 22.8 | ||||||||||||||||||
Preferred stock dividend requirements | (0.6 | ) | (0.1 | ) | (0.7 | ) | — | — | (0.7 | ) | |||||||||||||||
Net income (loss) attributed to common shareholder | 38.3 | (3.0 | ) | 35.3 | 1.7 | — | 37 | ||||||||||||||||||
Regulated Utilities | |||||||||||||||||||||||||
(Millions) | Electric | Natural Gas Utility | Total | Other | Reconciling | WPS | |||||||||||||||||||
Utility | Utility | Eliminations | Consolidated | ||||||||||||||||||||||
Nine Months Ended September 30, 2014 | |||||||||||||||||||||||||
External revenues | $ | 940.2 | $ | 344.7 | $ | 1,284.90 | $ | — | $ | — | $ | 1,284.90 | |||||||||||||
Intersegment revenues | — | 10.5 | 10.5 | 1 | (11.5 | ) | — | ||||||||||||||||||
Depreciation and amortization expense | 72.3 | 12.2 | 84.5 | 0.5 | (0.4 | ) | 84.6 | ||||||||||||||||||
Miscellaneous income | 8.4 | 0.1 | 8.5 | 11 | — | 19.5 | |||||||||||||||||||
Interest expense | 33.5 | 7.8 | 41.3 | 1.6 | — | 42.9 | |||||||||||||||||||
Provision for income taxes | 52.5 | 11.2 | 63.7 | 3 | — | 66.7 | |||||||||||||||||||
Preferred stock dividend requirements | (2.0 | ) | (0.3 | ) | (2.3 | ) | — | — | (2.3 | ) | |||||||||||||||
Net income attributed to common shareholder | 85.2 | 17.6 | 102.8 | 6.8 | — | 109.6 | |||||||||||||||||||
Regulated Utilities | |||||||||||||||||||||||||
(Millions) | Electric | Natural Gas Utility | Total | Other | Reconciling | WPS | |||||||||||||||||||
Utility | Utility | Eliminations | Consolidated | ||||||||||||||||||||||
Nine Months Ended September 30, 2013 | |||||||||||||||||||||||||
External revenues | $ | 946 | $ | 227.1 | $ | 1,173.10 | $ | — | $ | — | $ | 1,173.10 | |||||||||||||
Intersegment revenues | — | 8.3 | 8.3 | 1.1 | (9.4 | ) | — | ||||||||||||||||||
Depreciation and amortization expense | 66.9 | 11.8 | 78.7 | 0.5 | (0.4 | ) | 78.8 | ||||||||||||||||||
Miscellaneous income | 6.5 | 0.1 | 6.6 | 10.3 | — | 16.9 | |||||||||||||||||||
Interest expense | 23.8 | 6.4 | 30.2 | 1.7 | — | 31.9 | |||||||||||||||||||
Provision for income taxes | 52.9 | 8.9 | 61.8 | 2.9 | — | 64.7 | |||||||||||||||||||
Preferred stock dividend requirements | (1.9 | ) | (0.4 | ) | (2.3 | ) | — | — | (2.3 | ) | |||||||||||||||
Net income attributed to common shareholder | 87.1 | 14.4 | 101.5 | 6 | — | 107.5 | |||||||||||||||||||
RELATED_PARTY_TRANSACTIONS_Tab
RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Related Party Transactions [Abstract] | ' | ||||||||||||||||
Schedule of information related to transactions entered into with related parties | ' | ||||||||||||||||
The table below includes information summarizing transactions entered into with related parties as of: | |||||||||||||||||
(Millions) | September 30, 2014 | 31-Dec-13 | |||||||||||||||
Notes payable * | |||||||||||||||||
Integrys Energy Group | $ | 5.7 | $ | 6.3 | |||||||||||||
Accounts Payable | |||||||||||||||||
ATC | 8.2 | 10.4 | |||||||||||||||
Liability related to income tax allocation | |||||||||||||||||
Integrys Energy Group | 6.2 | 6.7 | |||||||||||||||
* | WPS Leasing, our consolidated subsidiary, has a note payable to our parent company, Integrys Energy Group. At September 30, 2014, the current portion of the note payable was $2.1 million. | ||||||||||||||||
Schedule of activity associated with related party transactions | ' | ||||||||||||||||
The following table shows activity associated with related party transactions: | |||||||||||||||||
Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||
(Millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Electric transactions | |||||||||||||||||
Sales to UPPCO (1) | $ | 4.1 | $ | 6.4 | $ | 15.3 | $ | 17.7 | |||||||||
Sales to Integrys Transportation Fuels, LLC | 0.1 | — | 0.1 | — | |||||||||||||
Natural gas transactions | |||||||||||||||||
Sales to IES | 0.3 | 0.1 | 0.5 | 0.3 | |||||||||||||
Purchases from IES | 0.1 | 0.2 | 2.5 | 0.6 | |||||||||||||
Interest expense (2) | |||||||||||||||||
Integrys Energy Group | 0.2 | 0.1 | 0.4 | 0.4 | |||||||||||||
Transactions with equity method investees | |||||||||||||||||
Charges from ATC for network transmission services | 24.7 | 24.6 | 74.2 | 73.8 | |||||||||||||
Charges to ATC for services and construction | 2.4 | 1.9 | 7.5 | 6 | |||||||||||||
Purchases of energy from WRPC | 0.9 | 1 | 3 | 3 | |||||||||||||
Charges to WRPC for operations | 0.3 | 0.2 | 1 | 0.7 | |||||||||||||
Equity earnings from WPS Investments, LLC (3) | 2.6 | 2.5 | 7.7 | 7.6 | |||||||||||||
(1) | Includes sales through the date of the sale of UPPCO in August 2014, by Integrys Energy Group. | ||||||||||||||||
(2) | WPS Leasing, our consolidated subsidiary, has a note payable to our parent company, Integrys Energy Group. | ||||||||||||||||
(3) | WPS Investments, LLC is a consolidated subsidiary of Integrys Energy Group that is jointly owned by Integrys Energy Group and us. At September 30, 2014, we had an 11.05% interest in WPS Investments accounted for under the equity method. Our ownership percentage has continued to decrease as additional equity contributions are made by Integrys Energy Group to WPS Investments. |
ACQUISITION_OF_FOX_ENERGY_CENT2
ACQUISITION OF FOX ENERGY CENTER (Details) (USD $) | 9 Months Ended | 1 Months Ended | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2014 |
Fox Energy Company LLC | Fox Energy Company LLC | |||
MW | ||||
Acquisition | ' | ' | ' | ' |
Purchase price | $0 | $391.60 | $391.60 | ' |
Capacity of electric generating facility | ' | ' | 593 | ' |
Assets acquired | ' | ' | ' | ' |
Inventories - materials and supplies | ' | ' | 3 | ' |
Other current assets | ' | ' | 0.4 | ' |
Property, plant, and equipment | ' | ' | 374.4 | ' |
Other long-term assets | ' | ' | 15.6 | ' |
Total assets acquired | ' | ' | 393.4 | ' |
Liabilities assumed | ' | ' | ' | ' |
Accounts payable | ' | ' | 1.8 | ' |
Total liabilities assumed | ' | ' | 1.8 | ' |
Contracted capacity from power purchase agreement | ' | ' | 500 | ' |
Termination of tolling agreement with Fox Energy Company LLC | $0 | ($50) | $50 | ' |
Amortization period of regulatory asset | ' | ' | ' | '9 years |
CASH_AND_CASH_EQUIVALENTS_Deta
CASH AND CASH EQUIVALENTS (Details) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Cash and Cash Equivalents [Abstract] | ' | ' |
Construction costs funded through accounts payable | $56.20 | $29.50 |
RISK_MANAGEMENT_ACTIVITIES_RIS
RISK MANAGEMENT ACTIVITIES - RISK MANAGEMENT ASSETS AND LIABILITIES (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Derivative assets and liabilities from risk management activities | ' | ' |
Risk Management Asset | $7.20 | $2.40 |
Risk Management Liability | 3.5 | 3.1 |
Designated as hedging instrument | ' | ' |
Derivative assets and liabilities from risk management activities | ' | ' |
Number of derivative instruments held | 0 | ' |
Non-hedge derivatives | ' | ' |
Derivative assets and liabilities from risk management activities | ' | ' |
Other current assets from risk management activities | 4.8 | 2.2 |
Other long-term assets from risk management activities | 2.4 | 0.2 |
Risk Management Asset | 7.2 | 2.4 |
Other current liabilities from risk management activities | 3.4 | 2.3 |
Other long-term liabilities from risk management activities | 0.1 | 0.8 |
Risk Management Liability | 3.5 | 3.1 |
Non-hedge derivatives | Natural gas contracts | ' | ' |
Derivative assets and liabilities from risk management activities | ' | ' |
Other current assets from risk management activities | 1.4 | 0.6 |
Other current liabilities from risk management activities | 0.4 | 0.1 |
Non-hedge derivatives | FTRs | ' | ' |
Derivative assets and liabilities from risk management activities | ' | ' |
Other current assets from risk management activities | 3.4 | 1.5 |
Other current liabilities from risk management activities | 0.4 | 0.3 |
Non-hedge derivatives | Petroleum product contracts | ' | ' |
Derivative assets and liabilities from risk management activities | ' | ' |
Other current assets from risk management activities | 0 | 0.1 |
Other current liabilities from risk management activities | 0.3 | 0 |
Non-hedge derivatives | Coal contracts | ' | ' |
Derivative assets and liabilities from risk management activities | ' | ' |
Other current assets from risk management activities | 0 | 0 |
Other long-term assets from risk management activities | 2.4 | 0.2 |
Other current liabilities from risk management activities | 2.3 | 1.9 |
Other long-term liabilities from risk management activities | $0.10 | $0.80 |
RISK_MANAGEMENT_ACTIVITIES_NET
RISK MANAGEMENT ACTIVITIES - NETTING ARRANGEMENTS AND CASH COLLATERAL (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Assets | ' | ' |
Derivative assets subject to master netting or similar arrangements, gross amount | $4.80 | $2.20 |
Potential effects of netting, including cash collateral | 1.1 | 0.6 |
Derivative assets subject to master netting or similar arrangements, net amount | 3.7 | 1.6 |
Derivative assets not subject to master netting arrangement | 2.4 | 0.2 |
Risk Management Asset | 7.2 | 2.4 |
Total Risk Management Assets, Net Amount | 6.1 | 1.8 |
Liabilities | ' | ' |
Derivative liabilities subject to master netting or similar arrangements, gross amount | 1.1 | 0.4 |
Potential effects of netting, including cash collateral | 1.1 | 0.4 |
Derivative liabilities subject to master netting or similar arrangements, net amount | 0 | 0 |
Derivative liabilities not subject to master netting arrangement | 2.4 | 2.7 |
Risk Management Liability | 3.5 | 3.1 |
Total Risk Management Liabilities, Net Amount | 2.4 | 2.7 |
Cash collateral | ' | ' |
Cash collateral provided to others related to contracts under master netting or similar arrangements | 4.3 | 3.1 |
Cash collateral received from others related to contracts under master netting or similar arrangements | $0 | $0.20 |
RISK_MANAGEMENT_ACTIVITIES_UNR
RISK MANAGEMENT ACTIVITIES - UNREALIZED GAINS AND LOSSES (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Natural gas contracts | Balance Sheet - Regulatory assets (current) | ' | ' | ' | ' |
Risk management activities | ' | ' | ' | ' |
Unrealized gain (loss) related to non-hedge derivative contracts | ($0.30) | ($0.20) | ($0.40) | $0.30 |
Natural gas contracts | Balance Sheet - Regulatory liabilities (current) | ' | ' | ' | ' |
Risk management activities | ' | ' | ' | ' |
Unrealized gain (loss) related to non-hedge derivative contracts | 0.5 | 0 | 0.4 | -0.1 |
FTRs | Balance Sheet - Regulatory assets (current) | ' | ' | ' | ' |
Risk management activities | ' | ' | ' | ' |
Unrealized gain (loss) related to non-hedge derivative contracts | 0.7 | 0.8 | -0.2 | 0 |
FTRs | Balance Sheet - Regulatory liabilities (current) | ' | ' | ' | ' |
Risk management activities | ' | ' | ' | ' |
Unrealized gain (loss) related to non-hedge derivative contracts | -0.3 | 0 | 0.7 | -0.3 |
Petroleum product contracts | Operating and maintenance expense | ' | ' | ' | ' |
Risk management activities | ' | ' | ' | ' |
Unrealized gain (loss) related to non-hedge derivative contracts | 0 | -0.1 | 0 | -0.1 |
Petroleum product contracts | Balance Sheet - Regulatory assets (current) | ' | ' | ' | ' |
Risk management activities | ' | ' | ' | ' |
Unrealized gain (loss) related to non-hedge derivative contracts | -0.4 | 0.1 | -0.4 | 0 |
Petroleum product contracts | Balance Sheet - Regulatory liabilities (current) | ' | ' | ' | ' |
Risk management activities | ' | ' | ' | ' |
Unrealized gain (loss) related to non-hedge derivative contracts | -0.1 | 0 | -0.1 | 0 |
Coal contracts | Balance Sheet - Regulatory assets (current) | ' | ' | ' | ' |
Risk management activities | ' | ' | ' | ' |
Unrealized gain (loss) related to non-hedge derivative contracts | -0.9 | -0.6 | -1 | 2.1 |
Coal contracts | Balance Sheet - Regulatory assets (long Term) | ' | ' | ' | ' |
Risk management activities | ' | ' | ' | ' |
Unrealized gain (loss) related to non-hedge derivative contracts | 0.1 | 0.2 | 0.7 | 4.2 |
Coal contracts | Balance Sheet - Regulatory liabilities (current) | ' | ' | ' | ' |
Risk management activities | ' | ' | ' | ' |
Unrealized gain (loss) related to non-hedge derivative contracts | 0 | 0 | 0 | -0.3 |
Coal contracts | Balance Sheet - Regulatory liabilities (long-term) | ' | ' | ' | ' |
Risk management activities | ' | ' | ' | ' |
Unrealized gain (loss) related to non-hedge derivative contracts | ($0.20) | $1.50 | $2.30 | ($0.70) |
RISK_MANAGEMENT_ACTIVITIES_NOT
RISK MANAGEMENT ACTIVITIES - NOTIONAL VOLUMES (Details) (Non-hedge derivatives) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
MMBTU | MMBTU | |
Natural gas contracts | Purchases | ' | ' |
Risk management activities | ' | ' |
Notional volume of outstanding derivative contracts (mmbtu or kwh) | 147,990,000 | 224,250,000 |
Natural gas contracts | Sales | ' | ' |
Risk management activities | ' | ' |
Notional volume of outstanding derivative contracts (mmbtu or kwh) | 0 | 700,000 |
FTRs | Other Transactions | ' | ' |
Risk management activities | ' | ' |
Notional volume of outstanding derivative contracts (mmbtu or kwh) | 5,644,000,000 | 3,427,000,000 |
Petroleum product contracts | Purchases | ' | ' |
Risk management activities | ' | ' |
Notional volume of outstanding derivative contracts (barrels) | 100,000 | 100,000 |
Petroleum product contracts | Sales | ' | ' |
Risk management activities | ' | ' |
Notional volume of outstanding derivative contracts (barrels) | 0 | 0 |
Coal contracts | Purchases | ' | ' |
Risk management activities | ' | ' |
Notional volume of outstanding derivative contracts (tons) | 3,400,000 | 4,800,000 |
Coal contracts | Sales | ' | ' |
Risk management activities | ' | ' |
Notional volume of outstanding derivative contracts (tons) | 0 | 0 |
GOODWILL_AND_OTHER_INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) (USD $) | 9 Months Ended | 3 Months Ended | 9 Months Ended | 9 Months Ended | 1 Months Ended | |||||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Oct. 31, 2014 |
Depreciation and amortization | Depreciation and amortization | Depreciation and amortization | Depreciation and amortization | Regulatory assets | Contractual service agreements | Contractual service agreements | Contractual service agreements | |||
Subsequent event | ||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Changes in the carrying amount of goodwill | $0 | $0 | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill impairment loss | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contractual service agreements | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contractual service agreements, gross carrying amount | ' | ' | ' | ' | ' | ' | ' | 15.6 | 15.6 | ' |
Contractual service agreements, accumulated amortization | ' | ' | ' | ' | ' | ' | ' | -3.5 | -1.8 | ' |
Contractual service agreements, net carrying amount | ' | ' | ' | ' | ' | ' | ' | 12.1 | 13.8 | ' |
Contractual service agreements with shortened amortization period | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 |
Weighted-average amortization period | ' | ' | ' | ' | ' | ' | ' | '4 years | ' | ' |
Recovery period | ' | ' | ' | ' | ' | ' | ' | '7 years | ' | ' |
Amortization expense | ' | ' | 0.5 | 0.6 | 1.7 | 1.2 | ' | ' | ' | ' |
Amortization expense for the next five years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Future amortization expense period | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization expense, 2014 | ' | ' | 2.2 | ' | 2.2 | ' | 0.3 | ' | ' | ' |
Amortization expense, 2015 | ' | ' | 2.2 | ' | 2.2 | ' | 1 | ' | ' | ' |
Amortization expense, 2016 | ' | ' | 2.2 | ' | 2.2 | ' | 1 | ' | ' | ' |
Amortization expense, 2017 | ' | ' | 1.7 | ' | 1.7 | ' | 0.5 | ' | ' | ' |
Amortization expense, 2018 | ' | ' | $1.20 | ' | $1.20 | ' | $0 | ' | ' | ' |
SHORTTERM_DEBT_AND_LINES_OF_CR2
SHORT-TERM DEBT AND LINES OF CREDIT - SHORT-TERM BORROWINGS (Details) (USD $) | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Short-term borrowings | ' | ' | ' |
Short-term borrowings outstanding | $63 | ' | $25.60 |
Commercial paper | ' | ' | ' |
Short-term borrowings | ' | ' | ' |
Short-term borrowings outstanding | 63 | ' | 25.6 |
Average interest rate (as a percent) | 0.18% | ' | 0.14% |
Average amount of short-term borrowings outstanding | $25.70 | $88.40 | ' |
SHORTTERM_DEBT_AND_LINES_OF_CR3
SHORT-TERM DEBT AND LINES OF CREDIT - REVOLVING CREDIT FACILITIES (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Short-term borrowings | ' | ' |
Total short-term credit capacity | $250 | $250 |
Short-term borrowings outstanding | 63 | 25.6 |
Available capacity under existing agreements | 187 | 224.4 |
Revolving credit facility maturing on May 17, 2014 | ' | ' |
Short-term borrowings | ' | ' |
Total short-term credit capacity | 0 | 135 |
Revolving credit facility maturing on May 7, 2015 | ' | ' |
Short-term borrowings | ' | ' |
Total short-term credit capacity | 135 | 0 |
Revolving credit facility maturing on June 13, 2017 | ' | ' |
Short-term borrowings | ' | ' |
Total short-term credit capacity | 115 | 115 |
Commercial paper | ' | ' |
Short-term borrowings | ' | ' |
Short-term borrowings outstanding | $63 | $25.60 |
INCOME_TAXES_Details
INCOME TAXES (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' |
Effective tax rate (as a percent) | 37.70% | 37.70% | 37.30% | 37.10% |
Federal statutory tax rate (as a percent) | 35.00% | 35.00% | 35.00% | 35.00% |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES - UNCONDITIONAL PURCHASE OBLIGATIONS AND PURCHASE ORDER COMMITMENTS (Details) (USD $) | Sep. 30, 2014 |
In Millions, unless otherwise specified | |
Minimum future commitments for purchase obligations | ' |
Total Amounts Committed | $1,324.50 |
2014 | 46.8 |
2015 | 209.4 |
2016 | 106.8 |
2017 | 118 |
2018 | 119.2 |
Later Years | 724.3 |
Purchase orders | 384.8 |
Purchased power | Electric Utility | ' |
Minimum future commitments for purchase obligations | ' |
Total Amounts Committed | 944 |
2014 | 19.1 |
2015 | 118.9 |
2016 | 42.3 |
2017 | 52.8 |
2018 | 55.8 |
Later Years | 655.1 |
Coal supply and transportation | Electric Utility | ' |
Minimum future commitments for purchase obligations | ' |
Total Amounts Committed | 124.9 |
2014 | 15.6 |
2015 | 45.1 |
2016 | 21.1 |
2017 | 22.2 |
2018 | 20.9 |
Later Years | 0 |
Natural gas utility supply and transportation | Natural Gas Utility | ' |
Minimum future commitments for purchase obligations | ' |
Total Amounts Committed | 255.6 |
2014 | 12.1 |
2015 | 45.4 |
2016 | 43.4 |
2017 | 43 |
2018 | 42.5 |
Later Years | $69.20 |
COMMITMENTS_AND_CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - ENVIRONMENTAL MATTERS (Details) (USD $) | 1 Months Ended | ||||
In Millions, unless otherwise specified | Mar. 31, 2013 | Jun. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 |
Weston and Pulliam plants | Columbia and Edgewater jointly-owned plants | Weston Title V Air Permit | Mercury emission | Manufactured gas plant remediation | |
Electric Utility | Electric Utility | Electric Utility | Electric Utility | Natural Gas Utility | |
MW | site | ||||
Air Permitting Violation Claims | ' | ' | ' | ' | ' |
Beneficial environmental project amount | $6 | $1.30 | ' | ' | ' |
Civil penalty and/or legal fees | 1.2 | 0.4 | ' | ' | ' |
Number of claims to be withdrawn under the petition for review | ' | ' | 9 | ' | ' |
Mercury and Interstate Air Quality Rules | ' | ' | ' | ' | ' |
Percentage mercury emission reduction required by the State of Wisconsin's mercury rule through 2014 | ' | ' | ' | 40.00% | ' |
Level of electric generating units above which a 90% reduction in mercury emissions from fuel combusted is required by 2015 (in MW) | ' | ' | ' | 150 | ' |
Percentage mercury emission reduction from fuel combusted by 2015, required by the State of Wisconsin's mercury rule, for electric generating units above 150 MW | ' | ' | ' | 90.00% | ' |
Level of electric generating units above which a reduction in mercury emissions is required by the Best Available Control Technology rule (in MW) | ' | ' | ' | 25 | ' |
Highest level for electric generating units for which a reduction in mercury emissions is required by the Best Available Control Technology rule (in MW) | ' | ' | ' | 150 | ' |
Estimated capital cost to achieve required emission reduction | ' | ' | ' | 9 | ' |
Expended environmental capital costs to achieve required emission reduction | ' | ' | ' | 5 | ' |
Manufactured Gas Plant Remediation | ' | ' | ' | ' | ' |
Number of environmental remediation sites | ' | ' | ' | ' | 10 |
Number of environmental remediation sites transferred to the EPA Superfund Alternative Sites Program | ' | ' | ' | ' | 7 |
Liabilities estimated and accrued for future undiscounted investigation and cleanup costs for all sites | ' | ' | ' | ' | 76 |
Cash expenditures for environmental remediation not yet recovered in rates | ' | ' | ' | ' | 11.9 |
Regulatory assets recorded for cash and estimated future remediation expenditures, net of insurance recoveries received | ' | ' | ' | ' | $87.90 |
EMPLOYEE_BENEFIT_PLANS_Details
EMPLOYEE BENEFIT PLANS (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Pension Benefits | ' | ' | ' | ' |
Components of net periodic benefit cost (including amounts capitalized to the balance sheets) | ' | ' | ' | ' |
Service cost | $2.20 | $2.70 | $6.50 | $8.10 |
Interest cost | 8.6 | 7.6 | 25.8 | 22.9 |
Expected return on plan assets | -16 | -14.3 | -48 | -42.9 |
Loss on plan settlement | 0 | 0 | 0.4 | 0 |
Amortization of prior service cost (credit) | 0.1 | 0.9 | 0.4 | 2.7 |
Amortization of net actuarial losses | 3.7 | 6 | 11.2 | 18 |
Net periodic benefit cost (credit) | -1.4 | 2.9 | -3.7 | 8.8 |
Contributions to the plans | ' | ' | 46.6 | ' |
Other Postretirement Benefits | ' | ' | ' | ' |
Components of net periodic benefit cost (including amounts capitalized to the balance sheets) | ' | ' | ' | ' |
Service cost | 1.9 | 2.6 | 5.8 | 7.9 |
Interest cost | 2.7 | 3.4 | 8.8 | 10.1 |
Expected return on plan assets | -4 | -3.7 | -12 | -11.1 |
Loss on plan settlement | 0 | 0 | 0 | 0 |
Amortization of prior service cost (credit) | -2.3 | -0.6 | -5.7 | -1.6 |
Amortization of net actuarial losses | 0.7 | 1.9 | 2 | 5.6 |
Net periodic benefit cost (credit) | -1 | 3.6 | -1.1 | 10.9 |
Contributions to the plans | ' | ' | 0.1 | ' |
Expected contributions to the plans during the remainder of fiscal year | ' | ' | $3 | ' |
STOCKBASED_COMPENSATION_STOCKB
STOCK-BASED COMPENSATION – STOCK-BASED COMPENSATION EXPENSE (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Information related to share based awards | ' | ' | ' | ' |
Total stock-based compensation expense | $0.90 | $1.40 | $7 | $4.80 |
Deferred income tax benefit | 0.4 | 0.6 | 2.8 | 1.9 |
Stock-based compensation cost capitalized | 0 | 0 | 0 | 0 |
Stock Options | ' | ' | ' | ' |
Information related to share based awards | ' | ' | ' | ' |
Total stock-based compensation expense | 0.1 | 0.2 | 0.4 | 0.5 |
Performance Stock Rights | ' | ' | ' | ' |
Information related to share based awards | ' | ' | ' | ' |
Total stock-based compensation expense | 0.1 | 0.4 | 3.9 | 1.7 |
Restricted Share Units | ' | ' | ' | ' |
Information related to share based awards | ' | ' | ' | ' |
Total stock-based compensation expense | $0.70 | $0.80 | $2.70 | $2.60 |
STOCKBASED_COMPENSATION_STOCK_
STOCK-BASED COMPENSATION – STOCK OPTIONS (Details) (Stock Options, USD $) | 9 Months Ended | |
In Millions, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Stock Options | ' | ' |
Weighted-average fair values along with the assumptions incorporated into the valuation models | ' | ' |
Period of historical volatility used to estimate expected volatility | '10 years | ' |
Expected term | '8 years | ' |
Risk-free interest rate, minimum (as a percent) | 0.12% | ' |
Risk-free interest rate, maximum (as a percent) | 2.88% | ' |
Expected dividend yield (as a percent) | 5.28% | ' |
Expected volatility (as a percent) | 18.00% | ' |
Weighted-average fair value per stock option (in dollars per share) | $6.70 | $6.03 |
Stock Options | ' | ' |
Outstanding, at the beginning of the period (in shares) | 49,993 | ' |
Granted (in shares) | 13,890 | ' |
Exercised (in shares) | -17,333 | ' |
Outstanding, at the end of the period (in shares) | 46,550 | ' |
Exercisable at the end of the period (in shares) | 9,270 | ' |
Weighted-Average Exercise Price Per Share | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | $53.03 | ' |
Granted (in dollars per share) | $55.23 | ' |
Exercised (in dollars per share) | $51.48 | ' |
Outstanding at the end of the period (in dollars per share) | $54.26 | ' |
Exercisable at the end of the period (in dollars per share) | $52.15 | ' |
Weighted-Average Remaining Contractual Life (in Years) | ' | ' |
Outstanding at the end of the period | '8 years 2 months | ' |
Exercisable at the end of the period | '7 years 2 months | ' |
Aggregate Intrinsic Value | ' | ' |
Outstanding at the end of the period (in dollars) | $0.50 | ' |
Exercisable at the end of the period (in dollars) | $0.10 | ' |
STOCKBASED_COMPENSATION_PERFOR
STOCK-BASED COMPENSATION – PERFORMANCE STOCK RIGHTS (Details) (USD $) | 9 Months Ended | |
In Millions, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Performance Stock Rights | ' | ' |
Assumptions incorporated into the valuation models | ' | ' |
Risk-free interest rate, minimum (as a percent) | 0.06% | ' |
Risk-free interest rate, maximum (as a percent) | 0.60% | ' |
Expected volatility, minimum (as a percent) | 17.00% | ' |
Expected volatility, maximum (as a percent) | 23.00% | ' |
Additional Disclosures | ' | ' |
Shares distributed for performance stock rights | 0 | ' |
Compensation cost not yet recognized | $1.90 | ' |
Weighted-average period over which compensation cost is to be recognized | '1 year 5 months | ' |
Performance Stock Rights | Minimum | ' | ' |
Assumptions incorporated into the valuation models | ' | ' |
Period of historical volatility used to estimate expected volatility | '1 year | ' |
Expected dividend yield (as a percent) | 5.28% | ' |
Performance Stock Rights | Maximum | ' | ' |
Assumptions incorporated into the valuation models | ' | ' |
Period of historical volatility used to estimate expected volatility | '3 years | ' |
Expected dividend yield (as a percent) | 5.33% | ' |
Performance Stock Rights Accounted for as Equity Awards | ' | ' |
Performance Stock Rights | ' | ' |
Outstanding at the beginning of the period (in shares) | 5,561 | ' |
Granted (in shares) | 1,113 | ' |
Award modifications (in shares) | 2,295 | ' |
Adjustment for shares not distributed | -3,347 | ' |
Outstanding at the end of the period (in shares) | 5,622 | ' |
Weighted-Average Fair Value | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | $45.16 | ' |
Granted (in dollars per share) | $44.28 | $48.50 |
Award modifications (in dollars per share) | $85.09 | ' |
Adjustment for shares not distributed (in dollars per share) | $41.90 | ' |
Outstanding at the end of the period (in dollars per share) | $63.23 | ' |
Performance Stock Rights Accounted for as Liability Awards | ' | ' |
Performance Stock Rights | ' | ' |
Outstanding at the beginning of the period (in shares) | 9,222 | ' |
Granted (in shares) | 4,440 | ' |
Award modifications (in shares) | -2,295 | ' |
Adjustment for shares not distributed | -379 | ' |
Outstanding at the end of the period (in shares) | 10,988 | ' |
Weighted-Average Fair Value | ' | ' |
Outstanding at the end of the period, fair value as of the reporting date (in dollars per shares) | $77.97 | ' |
STOCKBASED_COMPENSATION_RESTRI
STOCK-BASED COMPENSATION – RESTRICTED SHARE UNITS (Details) (Restricted Share Units, USD $) | 9 Months Ended | |
In Millions, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Restricted Share Units | ' | ' |
Restricted Share Unit Awards | ' | ' |
Outstanding at the beginning of the period (in shares) | 67,741 | ' |
Granted (in shares) | 28,725 | ' |
Dividend equivalents (in shares) | 2,262 | ' |
Vested and released (in shares) | -28,325 | ' |
Transfers (in shares) | 332 | ' |
Forfeited (in shares) | -804 | ' |
Outstanding at the end of the period (in shares) | 69,931 | ' |
Weighted-Average Grant Date Fair Value | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | $52.06 | ' |
Granted (in dollars per share) | $55.23 | $56.05 |
Dividend equivalents (in dollars per shares) | $54.46 | ' |
Vested and released (in dollars per shares) | $49.50 | ' |
Transfers (in dollars per share) | $54.55 | ' |
Forfeited (in dollars per share) | $54.64 | ' |
Outstanding at the end of the period (in dollars per share) | $54.46 | ' |
Additional Disclosures | ' | ' |
Total intrinsic value of restricted share units vested and released | $1.50 | $1.60 |
Compensation cost not yet recognized | $3.90 | ' |
Weighted-average period over which compensation cost is to be recognized | '2 years 4 months | ' |
COMMON_EQUITY_Details
COMMON EQUITY (Details) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Dividend Payment Restrictions | ' | ' |
Total restricted retained earnings | $493.90 | ' |
Equity in undistributed earnings of 50% or less owned investees accounted under equity method investments | 31.2 | ' |
Capital Transactions with Parent | ' | ' |
Common stock dividends paid | 83.9 | 81.5 |
Equity contributions received | 40 | 200 |
Maximum | ' | ' |
Dividend Payment Restrictions | ' | ' |
Debt to capitalization ratio required to be maintained (as a percent) | 65.00% | ' |
Equity method investment, ownership interest (as a percent) | 50.00% | ' |
Maximum | Public Service Commission of Wisconsin (PSCW) | ' | ' |
Dividend Payment Restrictions | ' | ' |
Percentage of previous period's dividend as restriction on current period dividends | 103.00% | ' |
Minimum | ' | ' |
Dividend Payment Restrictions | ' | ' |
Percentage of common stockholder's equity to total capitalization required to be maintained | 25.00% | ' |
Minimum | Public Service Commission of Wisconsin (PSCW) | ' | ' |
Dividend Payment Restrictions | ' | ' |
Common equity ratio required to be maintained (as a percent) | 51.00% | ' |
Integrys Energy Group | ' | ' |
Capital Transactions with Parent | ' | ' |
Common stock dividends paid | 83.9 | ' |
Equity contributions received | $40 | ' |
FAIR_VALUE_ASSETS_AND_LIABILIT
FAIR VALUE - ASSETS AND LIABILITIES MEASURED ON A RECURRING BASIS (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Assets | ' | ' | ' | ' | ' |
Risk Management Asset | $7.20 | ' | $7.20 | ' | $2.40 |
Liabilities | ' | ' | ' | ' | ' |
Risk Management Liability | 3.5 | ' | 3.5 | ' | 3.1 |
Transfers Between the Levels of the Fair Value Hierarchy | ' | ' | ' | ' | ' |
Fair Value Transfers, Amount | 0 | 0 | 0 | 0 | ' |
Fair value measurements on a recurring basis | Level 1 | ' | ' | ' | ' | ' |
Assets | ' | ' | ' | ' | ' |
Risk Management Asset | 0.8 | ' | 0.8 | ' | 0.7 |
Liabilities | ' | ' | ' | ' | ' |
Risk Management Liability | 0.7 | ' | 0.7 | ' | 0.1 |
Fair value measurements on a recurring basis | Level 2 | ' | ' | ' | ' | ' |
Assets | ' | ' | ' | ' | ' |
Risk Management Asset | 0.6 | ' | 0.6 | ' | 0 |
Liabilities | ' | ' | ' | ' | ' |
Risk Management Liability | 0 | ' | 0 | ' | 0 |
Fair value measurements on a recurring basis | Level 3 | ' | ' | ' | ' | ' |
Assets | ' | ' | ' | ' | ' |
Risk Management Asset | 5.8 | ' | 5.8 | ' | 1.7 |
Liabilities | ' | ' | ' | ' | ' |
Risk Management Liability | 2.8 | ' | 2.8 | ' | 3 |
Fair value measurements on a recurring basis | Total | ' | ' | ' | ' | ' |
Assets | ' | ' | ' | ' | ' |
Risk Management Asset | 7.2 | ' | 7.2 | ' | 2.4 |
Liabilities | ' | ' | ' | ' | ' |
Risk Management Liability | 3.5 | ' | 3.5 | ' | 3.1 |
Fair value measurements on a recurring basis | Natural gas contracts | Level 1 | ' | ' | ' | ' | ' |
Assets | ' | ' | ' | ' | ' |
Risk Management Asset | 0.8 | ' | 0.8 | ' | 0.6 |
Liabilities | ' | ' | ' | ' | ' |
Risk Management Liability | 0.4 | ' | 0.4 | ' | 0.1 |
Fair value measurements on a recurring basis | Natural gas contracts | Level 2 | ' | ' | ' | ' | ' |
Assets | ' | ' | ' | ' | ' |
Risk Management Asset | 0.6 | ' | 0.6 | ' | 0 |
Liabilities | ' | ' | ' | ' | ' |
Risk Management Liability | 0 | ' | 0 | ' | 0 |
Fair value measurements on a recurring basis | Natural gas contracts | Level 3 | ' | ' | ' | ' | ' |
Assets | ' | ' | ' | ' | ' |
Risk Management Asset | 0 | ' | 0 | ' | 0 |
Liabilities | ' | ' | ' | ' | ' |
Risk Management Liability | 0 | ' | 0 | ' | 0 |
Fair value measurements on a recurring basis | Natural gas contracts | Total | ' | ' | ' | ' | ' |
Assets | ' | ' | ' | ' | ' |
Risk Management Asset | 1.4 | ' | 1.4 | ' | 0.6 |
Liabilities | ' | ' | ' | ' | ' |
Risk Management Liability | 0.4 | ' | 0.4 | ' | 0.1 |
Fair value measurements on a recurring basis | FTRs | Level 1 | ' | ' | ' | ' | ' |
Assets | ' | ' | ' | ' | ' |
Risk Management Asset | 0 | ' | 0 | ' | 0 |
Liabilities | ' | ' | ' | ' | ' |
Risk Management Liability | 0 | ' | 0 | ' | 0 |
Fair value measurements on a recurring basis | FTRs | Level 2 | ' | ' | ' | ' | ' |
Assets | ' | ' | ' | ' | ' |
Risk Management Asset | 0 | ' | 0 | ' | 0 |
Liabilities | ' | ' | ' | ' | ' |
Risk Management Liability | 0 | ' | 0 | ' | 0 |
Fair value measurements on a recurring basis | FTRs | Level 3 | ' | ' | ' | ' | ' |
Assets | ' | ' | ' | ' | ' |
Risk Management Asset | 3.4 | ' | 3.4 | ' | 1.5 |
Liabilities | ' | ' | ' | ' | ' |
Risk Management Liability | 0.4 | ' | 0.4 | ' | 0.3 |
Fair value measurements on a recurring basis | FTRs | Total | ' | ' | ' | ' | ' |
Assets | ' | ' | ' | ' | ' |
Risk Management Asset | 3.4 | ' | 3.4 | ' | 1.5 |
Liabilities | ' | ' | ' | ' | ' |
Risk Management Liability | 0.4 | ' | 0.4 | ' | 0.3 |
Fair value measurements on a recurring basis | Petroleum product contracts | Level 1 | ' | ' | ' | ' | ' |
Assets | ' | ' | ' | ' | ' |
Risk Management Asset | ' | ' | ' | ' | 0.1 |
Liabilities | ' | ' | ' | ' | ' |
Risk Management Liability | 0.3 | ' | 0.3 | ' | ' |
Fair value measurements on a recurring basis | Petroleum product contracts | Level 2 | ' | ' | ' | ' | ' |
Assets | ' | ' | ' | ' | ' |
Risk Management Asset | ' | ' | ' | ' | 0 |
Liabilities | ' | ' | ' | ' | ' |
Risk Management Liability | 0 | ' | 0 | ' | ' |
Fair value measurements on a recurring basis | Petroleum product contracts | Level 3 | ' | ' | ' | ' | ' |
Assets | ' | ' | ' | ' | ' |
Risk Management Asset | ' | ' | ' | ' | 0 |
Liabilities | ' | ' | ' | ' | ' |
Risk Management Liability | 0 | ' | 0 | ' | ' |
Fair value measurements on a recurring basis | Petroleum product contracts | Total | ' | ' | ' | ' | ' |
Assets | ' | ' | ' | ' | ' |
Risk Management Asset | ' | ' | ' | ' | 0.1 |
Liabilities | ' | ' | ' | ' | ' |
Risk Management Liability | 0.3 | ' | 0.3 | ' | ' |
Fair value measurements on a recurring basis | Coal contracts | Level 1 | ' | ' | ' | ' | ' |
Assets | ' | ' | ' | ' | ' |
Risk Management Asset | 0 | ' | 0 | ' | 0 |
Liabilities | ' | ' | ' | ' | ' |
Risk Management Liability | 0 | ' | 0 | ' | 0 |
Fair value measurements on a recurring basis | Coal contracts | Level 2 | ' | ' | ' | ' | ' |
Assets | ' | ' | ' | ' | ' |
Risk Management Asset | 0 | ' | 0 | ' | 0 |
Liabilities | ' | ' | ' | ' | ' |
Risk Management Liability | 0 | ' | 0 | ' | 0 |
Fair value measurements on a recurring basis | Coal contracts | Level 3 | ' | ' | ' | ' | ' |
Assets | ' | ' | ' | ' | ' |
Risk Management Asset | 2.4 | ' | 2.4 | ' | 0.2 |
Liabilities | ' | ' | ' | ' | ' |
Risk Management Liability | 2.4 | ' | 2.4 | ' | 2.7 |
Fair value measurements on a recurring basis | Coal contracts | Total | ' | ' | ' | ' | ' |
Assets | ' | ' | ' | ' | ' |
Risk Management Asset | 2.4 | ' | 2.4 | ' | 0.2 |
Liabilities | ' | ' | ' | ' | ' |
Risk Management Liability | $2.40 | ' | $2.40 | ' | $2.70 |
FAIR_VALUE_SIGNIFICANT_UNOBSER
FAIR VALUE - SIGNIFICANT UNOBSERVABLE INPUTS (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 |
In Millions, unless otherwise specified | Fair value measurements on a recurring basis | Fair value measurements on a recurring basis | Fair value measurements on a recurring basis | Fair value measurements on a recurring basis | Fair value measurements on a recurring basis | Fair value measurements on a recurring basis | Fair value measurements on a recurring basis | Fair value measurements on a recurring basis | Fair value measurements on a recurring basis | ||
Level 3 | Level 3 | FTRs | FTRs | FTRs | Coal contracts | Coal contracts | Coal contracts | Coal contracts | |||
Level 3 | Level 3 | Level 3 | Level 3 | Level 3 | Level 3 | Level 3 | |||||
Valuation Technique: Market-based | Valuation Technique: Market-based | Valuation Technique: Market-based | |||||||||
Average | Minimum | Maximum | |||||||||
Fair Value Inputs Assets and Liabilities Quantitative Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Risk Management Asset | $7.20 | $2.40 | $5.80 | $1.70 | $3.40 | $1.50 | ' | $2.40 | $0.20 | ' | ' |
Risk Management Liability | $3.50 | $3.10 | $2.80 | $3 | $0.40 | $0.30 | ' | $2.40 | $2.70 | ' | ' |
Fair Value Inputs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Forward market prices (in dollars per megawatt-month or ton) | ' | ' | ' | ' | ' | ' | 187.89 | ' | ' | 12.31 | 15.5 |
FAIR_VALUE_LEVEL_3_RECONCILIAT
FAIR VALUE - LEVEL 3 RECONCILIATION (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Changes in the fair value of items measured on a recurring basis and categorized as Level 3 measurements | ' | ' | ' | ' |
Balance at the beginning of period | $4.90 | ($0.20) | ($1.30) | ($5.40) |
Net realized gains included in earnings | 0.2 | 1.5 | 1 | 2.5 |
Net unrealized gains (losses) recorded as regulatory assets or liabilities | -0.6 | -3.7 | 2.5 | 1.9 |
Purchases | 0 | 0 | 4.3 | 3.2 |
Sales | ' | 0 | ' | -0.1 |
Settlements | -1.5 | 3 | -3.5 | -1.5 |
Balance at the end of the period | 3 | 0.6 | 3 | 0.6 |
Impact on earnings of unrealized gains (losses) on level 3 instruments | 0 | 0 | 0 | 0 |
FTRs | ' | ' | ' | ' |
Changes in the fair value of items measured on a recurring basis and categorized as Level 3 measurements | ' | ' | ' | ' |
Balance at the beginning of period | 4 | 2.1 | 1.2 | 1.1 |
Net realized gains included in earnings | 0.2 | 1.5 | 1 | 2.5 |
Net unrealized gains (losses) recorded as regulatory assets or liabilities | 0.4 | 0.8 | 0.5 | -0.3 |
Purchases | 0 | 0 | 4.3 | 3.2 |
Sales | ' | 0 | ' | -0.1 |
Settlements | -1.6 | -2.6 | -4 | -4.6 |
Balance at the end of the period | 3 | 1.8 | 3 | 1.8 |
Coal contracts | ' | ' | ' | ' |
Changes in the fair value of items measured on a recurring basis and categorized as Level 3 measurements | ' | ' | ' | ' |
Balance at the beginning of period | 0.9 | -2.3 | -2.5 | -6.5 |
Net realized gains included in earnings | 0 | 0 | 0 | 0 |
Net unrealized gains (losses) recorded as regulatory assets or liabilities | -1 | -4.5 | 2 | 2.2 |
Purchases | 0 | 0 | 0 | 0 |
Sales | ' | 0 | ' | 0 |
Settlements | 0.1 | 5.6 | 0.5 | 3.1 |
Balance at the end of the period | $0 | ($1.20) | $0 | ($1.20) |
FAIR_VALUE_FINANCIAL_INSTRUMEN
FAIR VALUE - FINANCIAL INSTRUMENTS NOT RECORDED AT FAIR VALUE (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Carrying value and estimated fair value of financial instruments | ' | ' |
Long-term debt to parent | $5.70 | $6.30 |
Preferred stock | 51.2 | 51.2 |
Carrying Amount | ' | ' |
Carrying value and estimated fair value of financial instruments | ' | ' |
Long-term debt | 1,174.50 | 1,174.50 |
Long-term debt to parent | 5.7 | 6.3 |
Preferred stock | 51.2 | 51.2 |
Fair Value | ' | ' |
Carrying value and estimated fair value of financial instruments | ' | ' |
Long-term debt | 1,250.10 | 1,176.50 |
Long-term debt to parent | 6 | 7.1 |
Preferred stock | $57.10 | $61.40 |
MISCELLANEOUS_INCOME_Details
MISCELLANEOUS INCOME (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Other Income and Expenses [Abstract] | ' | ' | ' | ' |
Equity portion of AFUDC | $2.20 | $2.90 | $8.50 | $6.60 |
Earnings from equity method investments | 2.9 | 2.8 | 8.5 | 8.6 |
Key executive life insurance for retired employees | 0.1 | 0.1 | 1.5 | 1 |
Other | 0.4 | 0.2 | 1 | 0.7 |
Total miscellaneous income | $5.60 | $6 | $19.50 | $16.90 |
REGULATORY_ENVIRONMENT_Details
REGULATORY ENVIRONMENT (Details) (USD $) | 1 Months Ended | |||||||||||||||
In Millions, unless otherwise specified | Aug. 31, 2014 | Apr. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 31, 2014 | Apr. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 31, 2014 | Apr. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 31, 2014 | Oct. 31, 2014 | Oct. 31, 2014 | Oct. 31, 2014 |
Public Service Commission of Wisconsin (PSCW) | Public Service Commission of Wisconsin (PSCW) | Public Service Commission of Wisconsin (PSCW) | Public Service Commission of Wisconsin (PSCW) | Public Service Commission of Wisconsin (PSCW) | Public Service Commission of Wisconsin (PSCW) | Public Service Commission of Wisconsin (PSCW) | Public Service Commission of Wisconsin (PSCW) | Public Service Commission of Wisconsin (PSCW) | Public Service Commission of Wisconsin (PSCW) | Public Service Commission of Wisconsin (PSCW) | Public Service Commission of Wisconsin (PSCW) | Subsequent event | Subsequent event | Subsequent event | Subsequent event | |
2015 Rates | 2015 Rates | 2014 Rates | 2013 Rates | Retail electric rate case | Retail electric rate case | Retail electric rate case | Retail electric rate case | Retail natural gas rate case | Retail natural gas rate case | Retail natural gas rate case | Retail natural gas rate case | Public Service Commission of Wisconsin (PSCW) | Public Service Commission of Wisconsin (PSCW) | Public Service Commission of Wisconsin (PSCW) | Michigan Public Service Commission (MPSC) [Member] | |
2015 Rates | 2015 Rates | 2014 Rates | 2013 Rates | 2015 Rates | 2015 Rates | 2014 Rates | 2013 Rates | 2015 Rates | Retail electric rate case | Retail natural gas rate case | Retail electric rate case | |||||
2015 Rates | 2015 Rates | 2015 Rates | ||||||||||||||
Regulatory Environment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Requested annual increase (decrease) in rates for customers | ' | ' | ' | ' | ' | $76.80 | ' | ' | ' | ($1.60) | ' | ' | ' | ' | ' | $5.70 |
Requested return on common equity percent reflected in rates of customers | ' | 10.60% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.60% |
Requested percent of capital structure composed of common equity | ' | 50.51% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.48% |
Recommended rate increase (decrease) in rates for customers | ' | ' | ' | ' | 28.7 | ' | ' | ' | -13.6 | ' | ' | ' | ' | ' | ' | ' |
Recommended rate of return on common equity | 10.20% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Recommended percent of capital structure composed of common equity | 50.27% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revised requested annual increase (decrease) in rates for customers | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 48 | 8 | ' |
Revised requested return on common equity percent | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.20% | ' | ' | ' |
Revised requested percent of capital structure composed of common equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.27% | ' | ' | ' |
Approved annual increase (decrease) in rates for customers | ' | ' | ' | ' | ' | ' | -12.8 | 28.5 | ' | ' | 4 | -3.4 | ' | ' | ' | ' |
Approved return on common equity percent reflected in rates of customers | ' | ' | 10.20% | 10.30% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Approved percent of capital structure composed of common equity | ' | ' | 50.14% | 51.61% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fuel refund | ' | ' | ' | ' | ' | ' | ' | 20.5 | ' | ' | ' | ' | ' | ' | ' | ' |
Deferral related to pension and other employee benefits costs | ' | ' | ' | ' | ' | ' | ' | 7.3 | ' | ' | ' | 2.1 | ' | ' | ' | ' |
Recovery of income tax amounts previously expensed related to the Federal Health Care Reform Act | ' | ' | ' | 5.9 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Annual cap for decoupling | ' | ' | ' | ' | ' | ' | ' | $14 | ' | ' | ' | $8 | ' | ' | ' | ' |
SEGMENTS_OF_BUSINESS_Details
SEGMENTS OF BUSINESS (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
segment | ||||
Segment Reporting [Abstract] | ' | ' | ' | ' |
Number of reportable segments | ' | ' | 3 | ' |
Segment reporting information | ' | ' | ' | ' |
Revenues | $370.40 | $371.90 | $1,284.90 | $1,173.10 |
Depreciation and amortization expense | 28.7 | 27.6 | 84.6 | 78.8 |
Miscellaneous income | 5.6 | 6 | 19.5 | 16.9 |
Interest expense | 14.6 | 10.7 | 42.9 | 31.9 |
Provision (benefit) for income taxes | 26 | 22.8 | 66.7 | 64.7 |
Preferred stock dividend requirements | -0.7 | -0.7 | -2.3 | -2.3 |
Net income (loss) attributed to common shareholder | 42.2 | 37 | 109.6 | 107.5 |
Intersegment revenues | ' | ' | ' | ' |
Segment reporting information | ' | ' | ' | ' |
Revenues | 0 | 0 | 0 | 0 |
Reconciling Eliminations | ' | ' | ' | ' |
Segment reporting information | ' | ' | ' | ' |
Revenues | 0 | 0 | 0 | 0 |
Depreciation and amortization expense | -0.1 | -0.1 | -0.4 | -0.4 |
Miscellaneous income | 0 | 0 | 0 | 0 |
Interest expense | 0 | 0 | 0 | 0 |
Provision (benefit) for income taxes | 0 | 0 | 0 | 0 |
Preferred stock dividend requirements | 0 | 0 | 0 | 0 |
Net income (loss) attributed to common shareholder | 0 | 0 | 0 | 0 |
Reconciling Eliminations | Intersegment revenues | ' | ' | ' | ' |
Segment reporting information | ' | ' | ' | ' |
Revenues | -3.7 | -4.6 | -11.5 | -9.4 |
Utility Segments | ' | ' | ' | ' |
Segment reporting information | ' | ' | ' | ' |
Revenues | 370.4 | 371.9 | 1,284.90 | 1,173.10 |
Depreciation and amortization expense | 28.7 | 27.5 | 84.5 | 78.7 |
Miscellaneous income | 2.1 | 2.8 | 8.5 | 6.6 |
Interest expense | 14 | 10 | 41.3 | 30.2 |
Provision (benefit) for income taxes | 25 | 21.8 | 63.7 | 61.8 |
Preferred stock dividend requirements | -0.7 | -0.7 | -2.3 | -2.3 |
Net income (loss) attributed to common shareholder | 40.1 | 35.3 | 102.8 | 101.5 |
Utility Segments | Intersegment revenues | ' | ' | ' | ' |
Segment reporting information | ' | ' | ' | ' |
Revenues | 3.4 | 4.1 | 10.5 | 8.3 |
Utility Segments | Electric Utility | ' | ' | ' | ' |
Segment reporting information | ' | ' | ' | ' |
Revenues | 327.4 | 331.7 | 940.2 | 946 |
Depreciation and amortization expense | 24.6 | 23.6 | 72.3 | 66.9 |
Miscellaneous income | 2.1 | 2.8 | 8.4 | 6.5 |
Interest expense | 11.4 | 7.9 | 33.5 | 23.8 |
Provision (benefit) for income taxes | 27.3 | 23.8 | 52.5 | 52.9 |
Preferred stock dividend requirements | -0.7 | -0.6 | -2 | -1.9 |
Net income (loss) attributed to common shareholder | 43.1 | 38.3 | 85.2 | 87.1 |
Utility Segments | Electric Utility | Intersegment revenues | ' | ' | ' | ' |
Segment reporting information | ' | ' | ' | ' |
Revenues | 0 | 0 | 0 | 0 |
Utility Segments | Natural Gas Utility | ' | ' | ' | ' |
Segment reporting information | ' | ' | ' | ' |
Revenues | 43 | 40.2 | 344.7 | 227.1 |
Depreciation and amortization expense | 4.1 | 3.9 | 12.2 | 11.8 |
Miscellaneous income | 0 | 0 | 0.1 | 0.1 |
Interest expense | 2.6 | 2.1 | 7.8 | 6.4 |
Provision (benefit) for income taxes | -2.3 | -2 | 11.2 | 8.9 |
Preferred stock dividend requirements | 0 | -0.1 | -0.3 | -0.4 |
Net income (loss) attributed to common shareholder | -3 | -3 | 17.6 | 14.4 |
Utility Segments | Natural Gas Utility | Intersegment revenues | ' | ' | ' | ' |
Segment reporting information | ' | ' | ' | ' |
Revenues | 3.4 | 4.1 | 10.5 | 8.3 |
Nonutility Segments | Other | ' | ' | ' | ' |
Segment reporting information | ' | ' | ' | ' |
Revenues | 0 | 0 | 0 | 0 |
Depreciation and amortization expense | 0.1 | 0.2 | 0.5 | 0.5 |
Miscellaneous income | 3.5 | 3.2 | 11 | 10.3 |
Interest expense | 0.6 | 0.7 | 1.6 | 1.7 |
Provision (benefit) for income taxes | 1 | 1 | 3 | 2.9 |
Preferred stock dividend requirements | 0 | 0 | 0 | 0 |
Net income (loss) attributed to common shareholder | 2.1 | 1.7 | 6.8 | 6 |
Nonutility Segments | Other | Intersegment revenues | ' | ' | ' | ' |
Segment reporting information | ' | ' | ' | ' |
Revenues | $0.30 | $0.50 | $1 | $1.10 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Related Party Transactions | ' | ' | ' | ' | ' |
Long-term debt to parent | $3.60 | ' | $3.60 | ' | $6.30 |
Current portion of long-term debt to parent | 2.1 | ' | 2.1 | ' | 0 |
Earnings from equity method investments | 2.9 | 2.8 | 8.5 | 8.6 | ' |
ATC | ' | ' | ' | ' | ' |
Related Party Transactions | ' | ' | ' | ' | ' |
Accounts payable to related parties | 8.2 | ' | 8.2 | ' | 10.4 |
Charges from equity method investee for network transmission services | 24.7 | 24.6 | 74.2 | 73.8 | ' |
Charges to equity method investee for services and/or construction | 2.4 | 1.9 | 7.5 | 6 | ' |
WRPC | ' | ' | ' | ' | ' |
Related Party Transactions | ' | ' | ' | ' | ' |
Purchases from related party | 0.9 | 1 | 3 | 3 | ' |
Charges to equity method investee for services and/or construction | 0.3 | 0.2 | 1 | 0.7 | ' |
WPS Investments, LLC | ' | ' | ' | ' | ' |
Related Party Transactions | ' | ' | ' | ' | ' |
Earnings from equity method investments | 2.6 | 2.5 | 7.7 | 7.6 | ' |
Equity method investment, ownership interest (as a percent) | 11.05% | ' | 11.05% | ' | ' |
Integrys Energy Group | ' | ' | ' | ' | ' |
Related Party Transactions | ' | ' | ' | ' | ' |
Liability related to income tax allocation | 6.2 | ' | 6.2 | ' | 6.7 |
UPPCO | Electric Utility | ' | ' | ' | ' | ' |
Related Party Transactions | ' | ' | ' | ' | ' |
Sales to related party | 4.1 | 6.4 | 15.3 | 17.7 | ' |
Integrys Transportation Fuels LLC | Electric Utility | ' | ' | ' | ' | ' |
Related Party Transactions | ' | ' | ' | ' | ' |
Sales to related party | 0.1 | 0 | 0.1 | 0 | ' |
Integrys Energy Services | Natural gas transactions | ' | ' | ' | ' | ' |
Related Party Transactions | ' | ' | ' | ' | ' |
Sales to related party | 0.3 | 0.1 | 0.5 | 0.3 | ' |
Purchases from related party | 0.1 | 0.2 | 2.5 | 0.6 | ' |
WPS Leasing | Integrys Energy Group | ' | ' | ' | ' | ' |
Related Party Transactions | ' | ' | ' | ' | ' |
Long-term debt to parent | 5.7 | ' | 5.7 | ' | 6.3 |
Interest expense | $0.20 | $0.10 | $0.40 | $0.40 | ' |