DOCUMENT_AND_ENTITY_INFORMATIO
DOCUMENT AND ENTITY INFORMATION | 3 Months Ended | |
Mar. 31, 2015 | 4-May-15 | |
Document and Entity Information | ||
Entity Registrant Name | WISCONSIN PUBLIC SERVICE CORP | |
Entity Central Index Key | 107833 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 23,896,962 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Statement [Abstract] | ||
Operating revenues | $424.70 | $555.70 |
Cost of fuel, natural gas, and purchased power | 205.2 | 305.8 |
Operating and maintenance expense | 107.7 | 122.1 |
Depreciation and amortization expense | 29.2 | 27.6 |
Taxes other than income taxes | 12.5 | 12.6 |
Operating income | 70.1 | 87.6 |
Miscellaneous income | 6.6 | 7.3 |
Interest expense | 13.9 | 14 |
Other expense | -7.3 | -6.7 |
Income before taxes | 62.8 | 80.9 |
Provision for income taxes | 23 | 29.8 |
Net income | 39.8 | 51.1 |
Preferred stock dividend requirements | -0.8 | -0.8 |
Net income attributed to common shareholder | $39 | $50.30 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Assets | ||
Cash and cash equivalents | $3.90 | $5.40 |
Accounts receivable and accrued unbilled revenues, net of reserves of $4.1 and $3.2, respectively | 196.1 | 201.7 |
Receivables from related parties | 1.4 | 1.3 |
Inventories | ||
Fuel and gas | 60.8 | 85 |
Materials and supplies, at average cost | 42.9 | 39.2 |
Regulatory assets | 24.1 | 25 |
Prepaid taxes | 29.3 | 65.7 |
Other current assets | 14.9 | 18.3 |
Current assets | 373.4 | 441.6 |
Property, plant, and equipment, net of accumulated depreciation of $1,557.3 and $1,542.5, respectively | 3,178.60 | 3,131 |
Regulatory assets | 431.6 | 433.5 |
Goodwill | 36.4 | 36.4 |
Pension and other postretirement benefit assets | 134.8 | 128.9 |
Other long-term assets | 112.7 | 107.3 |
Total assets | 4,267.50 | 4,278.70 |
Liabilities and Shareholders' Equity | ||
Short-term debt | 100.4 | 145.1 |
Current portion of long-term debt | 125 | 125 |
Current portion of long-term debt to parent | 0.5 | 2.5 |
Accounts payable | 160.1 | 161.6 |
Payables to related parties | 16.8 | 16.9 |
Regulatory liabilities | 33.5 | 21.2 |
Other current liabilities | 80.8 | 69.3 |
Current liabilities | 517.1 | 541.6 |
Long-term debt to parent | 2.8 | 2.9 |
Long-term debt | 1,049.50 | 1,049.50 |
Deferred income taxes | 731.5 | 722.1 |
Deferred investment tax credits | 7.7 | 7.8 |
Regulatory liabilities | 302.1 | 303.3 |
Environmental remediation liabilities | 82.7 | 86.3 |
Pension and other postretirement benefit obligations | 38.2 | 37.6 |
Payables to related parties | 5.3 | 5.4 |
Other long-term liabilities | 68.4 | 71.6 |
Long-term liabilities | 2,288.20 | 2,286.50 |
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 | 783.5 | 782 |
Retained earnings | 531.9 | 521.8 |
Total liabilities and shareholders’ equity | $4,267.50 | $4,278.70 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Accounts receivable and accrued unbilled revenues, reserves (in dollars) | $4.10 | $3.20 |
Property, plant, and equipment, accumulated depreciation (in dollars) | $1,557.30 | $1,542.50 |
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 $) | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
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 | 783.5 | 782 |
Retained earnings | 531.9 | 521.8 |
Total common stock equity | 1,411 | 1,399.40 |
Preferred stock, shares outstanding | 511,882 | |
Preferred stock – Cumulative; $100 par value; 1,000,000 shares authorized with no mandatory redemption | 51.2 | 51.2 |
Total long-term debt to parent (including current portion) | 3.3 | 5.4 |
Current portion of long-term debt to parent | -0.5 | -2.5 |
Long-term debt to parent | 2.8 | 2.9 |
Total First Mortgage Bonds and Senior Notes | 1,175.10 | 1,175.10 |
Unamortized discount on long-term debt | -0.6 | -0.6 |
Total | 1,174.50 | 1,174.50 |
Current portion of long-term debt | -125 | -125 |
Total long-term debt | 1,049.50 | 1,049.50 |
Total capitalization | 2,514.50 | 2,503 |
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) | 0 | 2 |
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) | 3.3 | 3.4 |
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 – Cumulative; $100 par value; 1,000,000 shares authorized with no mandatory redemption | 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 – Cumulative; $100 par value; 1,000,000 shares authorized with no mandatory redemption | 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 – Cumulative; $100 par value; 1,000,000 shares authorized with no mandatory redemption | 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 – Cumulative; $100 par value; 1,000,000 shares authorized with no mandatory redemption | 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 – Cumulative; $100 par value; 1,000,000 shares authorized with no mandatory redemption | $15 | $15 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CAPITALIZATION (Parenthetical) (USD $) | Mar. 31, 2015 |
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 $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Operating Activities | ||
Net income | $39.80 | $51.10 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Depreciation and amortization expense | 29.2 | 27.6 |
Recoveries and refunds of regulatory assets and liabilities | 0.1 | 3.8 |
Pension and other postretirement contributions | -0.5 | -46.2 |
Deferred income taxes and investment tax credits | 10.1 | 14.7 |
Deferrals to regulatory assets and liabilities | -2.5 | -13.5 |
Other | -9.8 | -3.2 |
Changes in working capital | ||
Accounts receivable and accrued unbilled revenues | 3.6 | -46.2 |
Inventories | 20.2 | 28 |
Prepaid taxes | 36.3 | 32.9 |
Other current assets | 3.2 | -1.3 |
Accounts payable | -1.5 | 33.6 |
Other current liabilities | 24.8 | 15.1 |
Net cash provided by operating activities | 153 | 96.4 |
Investing Activities | ||
Capital expenditures | -79.8 | -58.8 |
Other | 1.4 | 0.6 |
Net cash used for investing activities | -78.4 | -58.2 |
Financing Activities | ||
Short-term debt, net | -44.7 | -7.4 |
Repayment of long-term debt to parent | -2.1 | -0.2 |
Payment of dividends to parent | -28.8 | -28 |
Preferred stock dividend requirements | -0.8 | -0.8 |
Other | 0.3 | -0.1 |
Net cash used for financing activities | -76.1 | -36.5 |
Net change in cash and cash equivalents | -1.5 | 1.7 |
Cash and cash equivalents at beginning of period | 5.4 | 5.7 |
Cash and cash equivalents at end of period | 3.9 | 7.4 |
Supplemental Cash Flow Information | ||
Cash paid for interest | 0.2 | 0.1 |
Cash received for income taxes | ($18.50) | ($15) |
BASIS_OF_PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | 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, 2014. 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. | |
Reclassifications | |
We reclassified $17.9 million on the statement of cash flows for the three months ended March 31, 2014, from the recoveries and refunds of regulatory assets and liabilities line item to the other current liabilities line item. This reclassification had no impact on total cash flows from operating activities. |
PROPOSED_MERGER_OF_PARENT_COMP
PROPOSED MERGER OF PARENT COMPANY WITH WISCONSIN ENERGY CORPORATION | 3 Months Ended |
Mar. 31, 2015 | |
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 was also approved by the shareholders of both companies. In October 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. In April 2015, the transaction was approved by the Federal Communications Commission, the FERC, and the MPSC. On April 30, 2015, the transaction was verbally approved by the PSCW subject to certain conditions. A final written order is expected from the PSCW in May 2015. The transaction is still subject to approvals from the Illinois Commerce Commission (ICC) and the Minnesota Public Utilities Commission, as well as other customary closing conditions. We expect the merger transaction to close by the end of this summer. |
CASH_AND_CASH_EQUIVALENTS
CASH AND CASH EQUIVALENTS | 3 Months Ended |
Mar. 31, 2015 | |
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 $49.1 million at March 31, 2015, and $35.0 million at March 31, 2014. These costs were treated as noncash investing activities. |
GOODWILL_AND_OTHER_INTANGIBLE_
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
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 three months ended March 31, 2015, and 2014. | |||||||||||||||||||||||||
The identifiable intangible assets other than goodwill listed below are part of other long-term assets on the balance sheets. | |||||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | ||||||||||||||||||||||||
(Millions) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||
Contractual service agreements (1) | $ | 15.6 | $ | (5.1 | ) | $ | 10.5 | $ | 15.6 | $ | (4.3 | ) | $ | 11.3 | |||||||||||
Other (2) | 0.4 | — | 0.4 | — | — | — | |||||||||||||||||||
Total intangible assets | $ | 16 | $ | (5.1 | ) | $ | 10.9 | $ | 15.6 | $ | (4.3 | ) | $ | 11.3 | |||||||||||
-1 | Represents 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. The remaining weighted-average amortization period for these intangible assets at March 31, 2015, was approximately four years. | ||||||||||||||||||||||||
-2 | Consists of an unamortized intangible asset. | ||||||||||||||||||||||||
The table below shows the amortization we recorded: | |||||||||||||||||||||||||
Three Months Ended March 31 | |||||||||||||||||||||||||
(Millions) | 2015 | 2014 | |||||||||||||||||||||||
Amortization recorded in depreciation and amortization expense | $ | 0.5 | $ | 0.6 | |||||||||||||||||||||
Amortization recorded in regulatory assets | 0.3 | — | |||||||||||||||||||||||
The following table shows our estimated amortization for the next five years, including amounts recorded through March 31, 2015: | |||||||||||||||||||||||||
For the Year Ending December 31 | |||||||||||||||||||||||||
(Millions) | 2015 | 2016 | 2017 | 2018 | 2019 | ||||||||||||||||||||
Amortization to be recorded in depreciation and amortization expense | $ | 2.2 | $ | 2.2 | $ | 1.7 | $ | 1.2 | $ | 1.2 | |||||||||||||||
Amortization to be recorded in regulatory assets | 1 | 1 | 0.5 | — | — | ||||||||||||||||||||
SHORTTERM_DEBT_AND_LINES_OF_CR
SHORT-TERM DEBT AND LINES OF CREDIT | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
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) | March 31, 2015 | 31-Dec-14 | |||||||||
Commercial paper | $ | 100.4 | * | $ | 145.1 | ||||||
Average interest rate on commercial paper outstanding | 0.32 | % | 0.32 | % | |||||||
* | Maturity dates ranged from April 1, 2015, through April 14, 2015. | ||||||||||
Our average amount of commercial paper borrowings based on daily outstanding balances during the three months ended March 31, 2015, and 2014, was $116.5 million and $9.1 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 | March 31, 2015 | 31-Dec-14 | ||||||||
Revolving credit facility | 5/8/19 | $ | 135 | $ | 135 | ||||||
Revolving credit facility | 6/13/17 | 115 | 115 | ||||||||
Total short-term credit capacity | $ | 250 | $ | 250 | |||||||
Less: | |||||||||||
Commercial paper outstanding | 100.4 | 145.1 | |||||||||
Available capacity under existing agreements | $ | 149.6 | $ | 104.9 | |||||||
INCOME_TAXES
INCOME TAXES | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
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 March 31 | |||||||
2015 | 2014 | ||||||
Effective tax rate | 36.6 | % | 36.8 | % | |||
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 months ended March 31, 2015, and 2014. | |||||||
We had no liabilities for unrecognized tax benefits at March 31, 2015, and December 31, 2014. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended | ||||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||||
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 March 31, 2015: | |||||||||||||||||||||||||||||||
Payments Due By Period | |||||||||||||||||||||||||||||||
(Millions) | Year Contracts Extend Through | Total Amounts Committed | 2015 | 2016 | 2017 | 2018 | 2019 | Later Years | |||||||||||||||||||||||
Electric utility | |||||||||||||||||||||||||||||||
Purchased power | 2029 | $ | 806.1 | $ | 92.1 | $ | 42.7 | $ | 53.3 | $ | 55.9 | $ | 57.1 | $ | 505 | ||||||||||||||||
Coal supply and transportation | 2019 | 155.8 | 44.3 | 34.8 | 33.5 | 32.1 | 11.1 | — | |||||||||||||||||||||||
Natural gas utility supply and transportation | 2024 | 229.1 | 31.3 | 43.4 | 42.9 | 42.4 | 27.1 | 42 | |||||||||||||||||||||||
Total | $ | 1,191.00 | $ | 167.7 | $ | 120.9 | $ | 129.7 | $ | 130.4 | $ | 95.3 | $ | 547 | |||||||||||||||||
(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, which alleged 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™, at 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. We received approval from the PSCW in our 2015 rate order to defer and amortize the undepreciated book value of the retired plant associated with Pulliam 5 and 6 and Weston 1 starting with the actual retirement date in 2015 and concluding by 2023. | |||||||||||||||||||||||||||||||
We received approval from the PSCW in our 2014 and 2015 rate orders to recover prudently incurred costs as a result of complying with the terms of the Consent Decree, with the exception of the civil penalty. We also believe that additional prudently incurred costs after 2015 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 March 31, 2015. 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 alleged 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. | ||||||||||||||||||||||||||||||
The Consent Decree contains a requirement to refuel, repower, or retire Edgewater 4, of which we are a joint owner, by no later than December 31, 2018. In the first quarter of 2015, management of the joint owners recommended that the Edgewater 4 unit be retired in December 2018. However, a final decision on how to address the requirement for this unit has not yet been made by the joint owners, as early retirement is contingent on various operational and market factors, and other alternatives to retirement are still available. | |||||||||||||||||||||||||||||||
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 challenged 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 February 2014, we also requested a modification to the construction permit for Weston 4 to remove the mercury Best Available Control Technology (BACT) emission limit requirement. This permit request was denied by the WDNR, and we challenged this issue as well. At our request, the permit was modified to resolve several of the petition issues. Those issues have now been voluntarily dismissed from the case, while a new permit change was challenged and added to the case. The administrative law judge (ALJ) recently dismissed some of the petition issues relating to the averaging period and monitoring issues. | |||||||||||||||||||||||||||||||
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. The WDNR also issued a Notice of Inquiry (NOI) alleging that we failed to comply with reporting requirements related to challenged matters in the 2013 Weston Title V permit. The ALJ denied our request to issue a stay or confirm that a statutory stay applies to the requirements identified in the NOV and NOI. The contested case is proceeding and certain legal arguments are currently being addressed in the context of summary judgment motions. No hearing date has been set. | |||||||||||||||||||||||||||||||
We do not expect these matters to have a material impact on our financial statements. | |||||||||||||||||||||||||||||||
Mercury and Interstate Air Quality Rules | |||||||||||||||||||||||||||||||
Mercury and Other Hazardous Air Pollutants: | |||||||||||||||||||||||||||||||
In December 2011, the EPA issued the final Utility Mercury and Air Toxics Standards (MATS), which regulates emissions of mercury and other hazardous air pollutants beginning in April 2015. The State of Wisconsin recently revised the compliance dates in 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 placed in service capital projects for our wholly owned plants in 2015 to achieve the required reductions for MATS compliance in April 2015. These 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 October 2014, the Court of Appeals granted the EPA's request to lift the stay on CSAPR and changed the compliance deadlines by three years, so that Phase I emissions budgets apply in 2015 and 2016, and Phase 2 emissions budgets will apply to 2017 and beyond. We do not expect to incur significant costs to comply with either phase of CSAPR and 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. | |||||||||||||||||||||||||||||||
Clean Water Act Rule | |||||||||||||||||||||||||||||||
In August 2014, the EPA issued a final Clean Water Act rule, which established requirements under Section 316(b) to regulate water intake structures at industrial facilities that use large volumes of surface water as cooling water. The new rule became effective in October 2014 and has been challenged by a number of parties. The cases have been consolidated and will be heard in the United States Court of Appeals for the Second Circuit. To the extent that the rule is upheld, we will comply with the rule on the timeline required under the regulation. We will evaluate the impact of compliance by conducting the studies required by the rule at our facilities. We anticipate that the timing for compliance will be incorporated into future wastewater discharge permit renewals. We do not expect to incur significant costs to comply with the Clean Water Act rule at our Weston plant as this plant already has two units equipped with cooling towers that assist with meeting these new requirements. We expect to recover any future compliance costs in future rates. | |||||||||||||||||||||||||||||||
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 sheet includes liabilities of $82.7 million that we have estimated and accrued for as of March 31, 2015, 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 March 31, 2015, cash expenditures for environmental remediation not yet recovered in rates were $18.7 million. Our balance sheet also includes a regulatory asset of $101.4 million at March 31, 2015, 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 | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
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 March 31 | Three Months Ended March 31 | ||||||||||||||||
(Millions) | 2015 | 2014 | 2015 | 2014 | |||||||||||||
Service cost | $ | 2.7 | $ | 2.4 | $ | 2.2 | $ | 2.5 | |||||||||
Interest cost | 8 | 8.7 | 2.6 | 3.9 | |||||||||||||
Expected return on plan assets | (16.4 | ) | (16.2 | ) | (4.0 | ) | (4.6 | ) | |||||||||
Loss on plan settlement | 0.1 | — | — | — | |||||||||||||
Amortization of prior service cost (credit) | — | 0.1 | (2.3 | ) | (1.1 | ) | |||||||||||
Amortization of net actuarial loss | 4.9 | 3.7 | 1 | 0.6 | |||||||||||||
Net periodic benefit (credit) cost | $ | (0.7 | ) | $ | (1.3 | ) | $ | (0.5 | ) | $ | 1.3 | ||||||
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 as a result of a plan design change to move participants age 65 and older to a Medicare Advantage plan starting January 1, 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 three months ended March 31, 2015, we contributed $0.4 million to our pension plans and $0.1 million to our other postretirement benefit plans. We expect to contribute an additional $0.8 million to our pension plans and $1.3 million to our other postretirement benefit plans during the remainder of 2015, dependent upon various factors affecting us, including our liquidity position and possible tax law changes. |
STOCKBASED_COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
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 months ended March 31: | ||||||||||||||
Three months ended March 31 | ||||||||||||||
(Millions) | 2015 | 2014 | ||||||||||||
Stock options | $ | — | $ | 0.1 | ||||||||||
Performance stock rights | 0.2 | 0.2 | ||||||||||||
Restricted share units | 1.4 | 1 | ||||||||||||
Total stock-based compensation expense | $ | 1.6 | $ | 1.3 | ||||||||||
Deferred income tax benefit | $ | 0.6 | $ | 0.5 | ||||||||||
No stock-based compensation cost was capitalized during the three months ended March 31, 2015, and 2014. | ||||||||||||||
Stock Options | ||||||||||||||
The weighted-average fair value per stock option granted during the three months ended March 31, 2014, was $6.70. No stock options were granted during 2015. | ||||||||||||||
There were no changes to stock options outstanding during the three months ended March 31, 2015. Information related to outstanding and exercisable stock options at March 31, 2015, is presented below: | ||||||||||||||
Stock Options | Weighted-Average | Weighted-Average | Aggregate | |||||||||||
Exercise Price Per | Remaining Contractual | Intrinsic Value | ||||||||||||
Share | Life (in Years) | (Millions) | ||||||||||||
Outstanding at March 31, 2015 | 5,714 | $ | 54.18 | 7.3 | $ | 0.1 | ||||||||
Exercisable at March 31, 2015 | 2,752 | $ | 53.13 | 6.9 | $ | 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 March 31, 2015. This is calculated as the difference between Integrys Energy Group’s closing stock price on March 31, 2015, and the option exercise price, multiplied by the number of in-the-money stock options. The intrinsic value of options exercised during the three months ended March 31, 2014, was not significant. No stock options were exercised during 2015. | ||||||||||||||
Due to the accelerated vesting of all unvested stock options held by active employees in October 2014, all compensation expense related to outstanding stock options has been recognized. | ||||||||||||||
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 two to three years of historical data. The table below reflects the assumptions used in the valuation of the outstanding grants at March 31, 2015: | ||||||||||||||
Risk-free interest rate | 0.42% – 0.63% | |||||||||||||
Expected dividend yield | 5.25% – 5.33% | |||||||||||||
Expected volatility | 18% – 19% | |||||||||||||
A summary of the activity for the three months ended March 31, 2015, related to performance stock rights accounted for as equity awards is presented below: | ||||||||||||||
Performance | Weighted-Average | |||||||||||||
Stock Rights | Fair Value * | |||||||||||||
Outstanding at December 31, 2014 | 3,903 | $ | 58.03 | |||||||||||
Distributed | (2,028 | ) | 78.09 | |||||||||||
Adjustment for final payout | 612 | 78.09 | ||||||||||||
Outstanding at March 31, 2015 | 2,487 | $ | 46.61 | |||||||||||
* | 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 three months ended March 31, 2014, was $44.28 per performance stock right. No performance stock rights were granted during 2015. | ||||||||||||||
A summary of the activity for the three months ended March 31, 2015, related to performance stock rights accounted for as liability awards is presented below: | ||||||||||||||
Performance | ||||||||||||||
Stock Rights | ||||||||||||||
Outstanding at December 31, 2014 | 10,034 | |||||||||||||
Distributed | (201 | ) | ||||||||||||
Adjustment for final payout | 96 | |||||||||||||
Outstanding at March 31, 2015 | 9,929 | |||||||||||||
The weighted-average fair value of all outstanding performance stock rights accounted for as liability awards as of March 31, 2015, was $107.05 per performance stock right. | ||||||||||||||
The total intrinsic value of shares distributed during the three months ended March 15, 2015, was not significant. No shares of Integrys Energy Group's common stock were distributed for performance stock rights during the three months ended March 31, 2014, because the performance percentage was below the threshold payout level for those rights that were eligible for distribution. | ||||||||||||||
As of March 31, 2015, $1.6 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 three months ended March 31, 2015, is presented below: | ||||||||||||||
Restricted Share | Weighted-Average | |||||||||||||
Unit Awards | Grant Date Fair Value | |||||||||||||
Outstanding at December 31, 2014 | 70,544 | $ | 54.46 | |||||||||||
Granted | 30,174 | 77.17 | ||||||||||||
Dividend equivalents | 665 | 64.3 | ||||||||||||
Vested and released | (28,292 | ) | 53.41 | |||||||||||
Transfers | 231 | 55.91 | ||||||||||||
Outstanding at March 31, 2015 | 73,322 | $ | 64.3 | |||||||||||
The weighted-average grant date fair value of restricted share units awarded during the three months ended March 31, 2015, and 2014, was $77.17 and $55.23 per unit, respectively. | ||||||||||||||
The total intrinsic value of restricted share unit awards vested and released during the three months ended March 31, 2015, and 2014, was | ||||||||||||||
$2.2 million and $1.5 million, respectively. The actual tax benefit realized for the tax deductions from the vesting and release of restricted share units during the three months ended March 31, 2015, and 2014, was not significant. | ||||||||||||||
As of March 31, 2015, $9.3 million of compensation cost related to unvested and outstanding restricted share units was expected to be recognized over a weighted-average period of 2.6 years. |
COMMON_EQUITY
COMMON EQUITY | 3 Months Ended |
Mar. 31, 2015 | |
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 March 31, 2015, our total restricted retained earnings were $528.9 million. Our equity in undistributed earnings of 50% or less owned investees accounted for by the equity method was $31.9 million at March 31, 2015. | |
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 three months ended March 31, 2015, we paid common stock dividends of $28.8 million to Integrys Energy Group. |
RISK_MANAGEMENT_ACTIVITIES
RISK MANAGEMENT ACTIVITIES | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
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: | ||||||||||||||
March 31, 2015 | ||||||||||||||
(Millions) | Balance Sheet Presentation * | Assets | Liabilities | |||||||||||
Natural gas contracts | Other current | $ | 0.1 | $ | 1.5 | |||||||||
FTRs | Other current | 0.7 | 0.1 | |||||||||||
Petroleum product contracts | Other current | — | 0.8 | |||||||||||
Coal contracts | Other current | — | 4.3 | |||||||||||
Coal contracts | Other long-term | — | 3.1 | |||||||||||
Other current | 0.8 | 6.7 | ||||||||||||
Other long-term | — | 3.1 | ||||||||||||
Total | $ | 0.8 | $ | 9.8 | ||||||||||
* | We classify assets and liabilities from risk management activities as current or long-term based upon the maturities of the underlying contracts. | |||||||||||||
December 31, 2014 | ||||||||||||||
(Millions) | Balance Sheet Presentation * | Assets | Liabilities | |||||||||||
Natural gas contracts | Other current | $ | 0.1 | $ | 2.1 | |||||||||
Natural gas contracts | Other long-term | — | 0.1 | |||||||||||
FTRs | Other current | 2.2 | 0.3 | |||||||||||
Petroleum product contracts | Other current | — | 1.1 | |||||||||||
Coal contracts | Other current | — | 2.4 | |||||||||||
Coal contracts | Other long-term | — | 1 | |||||||||||
Other current | 2.3 | 5.9 | ||||||||||||
Other long-term | — | 1.1 | ||||||||||||
Total | $ | 2.3 | $ | 7 | ||||||||||
* | 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: | ||||||||||||||
March 31, 2015 | ||||||||||||||
(Millions) | Gross Amount | Potential Effects of Netting, Including Cash Collateral | Net Amount | |||||||||||
Derivative assets subject to master netting or similar arrangements | $ | 0.8 | $ | 0.2 | $ | 0.6 | ||||||||
Derivative assets not subject to master netting or similar arrangements | — | — | ||||||||||||
Total risk management assets | $ | 0.8 | $ | 0.6 | ||||||||||
Derivative liabilities subject to master netting or similar arrangements | $ | 2.4 | $ | 2.4 | $ | — | ||||||||
Derivative liabilities not subject to master netting or similar arrangements | 7.4 | 7.4 | ||||||||||||
Total risk management liabilities | $ | 9.8 | $ | 7.4 | ||||||||||
31-Dec-14 | ||||||||||||||
(Millions) | Gross Amount | Potential Effects of Netting, Including Cash Collateral | Net Amount | |||||||||||
Derivative assets subject to master netting or similar arrangements | $ | 2.3 | $ | 0.4 | $ | 1.9 | ||||||||
Derivative assets not subject to master netting or similar arrangements | — | — | ||||||||||||
Total risk management assets | $ | 2.3 | $ | 1.9 | ||||||||||
Derivative liabilities subject to master netting or similar arrangements | $ | 3.6 | $ | 3.6 | $ | — | ||||||||
Derivative liabilities not subject to master netting or similar arrangements | 3.4 | 3.4 | ||||||||||||
Total risk management liabilities | $ | 7 | $ | 3.4 | ||||||||||
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 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) | March 31, 2015 | 31-Dec-14 | ||||||||||||
Cash collateral provided to others related to contracts under master netting or similar arrangements * | $ | 5.9 | $ | 6.6 | ||||||||||
* | Cash collateral provided to others is reflected in other current assets on the balance sheets. | |||||||||||||
The following table shows the unrealized gains (losses) recorded related to derivative contracts: | ||||||||||||||
Three Months Ended March 31 | ||||||||||||||
(Millions) | Financial Statement Presentation | 2015 | 2014 | |||||||||||
Natural gas | Balance Sheet — Regulatory assets (current) | $ | 0.9 | $ | 0.2 | |||||||||
Natural gas | Balance Sheet — Regulatory liabilities (current) | (0.1 | ) | 0.1 | ||||||||||
FTRs | Balance Sheet — Regulatory assets (current) | 0.2 | 0.1 | |||||||||||
FTRs | Balance Sheet — Regulatory liabilities (current) | (0.4 | ) | (0.1 | ) | |||||||||
Petroleum | Balance Sheet — Regulatory assets (current) | 0.4 | — | |||||||||||
Coal | Balance Sheet — Regulatory assets (current) | (2.6 | ) | 0.2 | ||||||||||
Coal | Balance Sheet — Regulatory assets (long-term) | (2.0 | ) | 0.4 | ||||||||||
Coal | Balance Sheet — Regulatory liabilities (long-term) | — | 1.6 | |||||||||||
We had the following notional volumes of outstanding derivative contracts: | ||||||||||||||
(Millions) | March 31, 2015 | 31-Dec-14 | ||||||||||||
Commodity | Purchases | Other Transactions | Purchases | Other Transactions | ||||||||||
Natural gas (therms) | 53.4 | N/A | 1,025.40 | N/A | ||||||||||
FTRs (kilowatt-hours) | N/A | 2,111.10 | N/A | 4,287.70 | ||||||||||
Petroleum products (barrels) | 0.1 | N/A | — | N/A | ||||||||||
Coal contract (tons) | 2.6 | N/A | 3 | N/A | ||||||||||
FAIR_VALUE
FAIR VALUE | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
FAIR VALUE | Fair Value | ||||||||||||||||
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. | |||||||||||||||||
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 methods. | |||||||||||||||||
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. | |||||||||||||||||
Our risk management assets and liabilities include NYMEX futures and options, physical commodity contracts, and financial transmission rights (FTRs) used to manage transmission congestion costs in the MISO market. When possible, we base the valuations of our risk management assets and liabilities on quoted prices for identical assets in active markets. These valuations are classified in Level 1. The valuations of certain contracts not classified as Level 1 may be based on quoted market prices received from counterparties and/or observable inputs for similar instruments. Transactions valued using these inputs are classified in Level 2. The valuations for certain physical coal contracts are categorized as Level 3 as they are based on significant assumptions made to extrapolate prices from the last quoted period through the end of the transaction term. The valuation for FTRs is derived from historical data from MISO, which is also considered a Level 3 input. See Note 11, Risk Management Activities, for more information. | |||||||||||||||||
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 supply 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: | |||||||||||||||||
March 31, 2015 | |||||||||||||||||
(Millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Risk management assets | |||||||||||||||||
Natural gas contracts | $ | 0.1 | $ | — | $ | — | $ | 0.1 | |||||||||
Financial transmission rights (FTRs) | — | — | 0.7 | 0.7 | |||||||||||||
Total | $ | 0.1 | $ | — | $ | 0.7 | $ | 0.8 | |||||||||
Risk management liabilities | |||||||||||||||||
Natural gas contracts | $ | 1.5 | $ | — | $ | — | $ | 1.5 | |||||||||
FTRs | — | — | 0.1 | 0.1 | |||||||||||||
Petroleum product contracts | 0.8 | — | — | 0.8 | |||||||||||||
Coal contracts | — | 1.2 | 6.2 | 7.4 | |||||||||||||
Total | $ | 2.3 | $ | 1.2 | $ | 6.3 | $ | 9.8 | |||||||||
December 31, 2014 | |||||||||||||||||
(Millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Risk management assets | |||||||||||||||||
Natural gas contracts | $ | — | $ | 0.1 | $ | — | $ | 0.1 | |||||||||
FTRs | — | — | 2.2 | 2.2 | |||||||||||||
Total | $ | — | $ | 0.1 | $ | 2.2 | $ | 2.3 | |||||||||
Risk management liabilities | |||||||||||||||||
Natural gas contracts | $ | 2.2 | $ | — | $ | — | $ | 2.2 | |||||||||
FTRs | — | — | 0.3 | 0.3 | |||||||||||||
Petroleum product contracts | 1.1 | — | — | 1.1 | |||||||||||||
Coal contracts | — | 1.2 | 2.2 | 3.4 | |||||||||||||
Total | $ | 3.3 | $ | 1.2 | $ | 2.5 | $ | 7 | |||||||||
There were no transfers between the levels of the fair value hierarchy during the three months ended March 31, 2015, and 2014. | |||||||||||||||||
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 March 31, 2015: | |||||||||||||||||
Fair Value (Millions) | |||||||||||||||||
Assets | Liabilities | Valuation Technique | Unobservable Input | Average or Range | |||||||||||||
FTRs | $ | 0.7 | $ | 0.1 | Market-based | Forward market prices ($/megawatt-month) (1) | $159.42 | ||||||||||
Coal contracts | — | 6.2 | Market-based | Forward market prices ($/ton) (2) | $9.70 – $12.39 | ||||||||||||
(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 or 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 March 31, 2015 | |||||||||||||||||
(Millions) | FTRs | Coal Contracts | Total | ||||||||||||||
Balance at the beginning of period | $ | 1.9 | $ | (2.2 | ) | $ | (0.3 | ) | |||||||||
Net realized losses included in earnings | (1.2 | ) | — | (1.2 | ) | ||||||||||||
Net unrealized losses recorded as regulatory assets or liabilities | (0.2 | ) | (4.3 | ) | (4.5 | ) | |||||||||||
Settlements | 0.1 | 0.3 | 0.4 | ||||||||||||||
Balance at the end of period | $ | 0.6 | $ | (6.2 | ) | $ | (5.6 | ) | |||||||||
Three Months Ended March 31, 2014 | |||||||||||||||||
(Millions) | FTRs | Coal Contracts | Total | ||||||||||||||
Balance at the beginning of period | $ | 1.2 | $ | (2.5 | ) | $ | (1.3 | ) | |||||||||
Net realized gains included in earnings | 0.7 | — | 0.7 | ||||||||||||||
Net unrealized gains recorded as regulatory assets or liabilities | — | 2.2 | 2.2 | ||||||||||||||
Purchases | (0.1 | ) | — | (0.1 | ) | ||||||||||||
Settlements | (1.3 | ) | 0.6 | (0.7 | ) | ||||||||||||
Balance at the end of period | $ | 0.5 | $ | 0.3 | $ | 0.8 | |||||||||||
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: | |||||||||||||||||
March 31, 2015 | 31-Dec-14 | ||||||||||||||||
(Millions) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||
Long-term debt | $ | 1,174.50 | $ | 1,318.80 | $ | 1,174.50 | $ | 1,286.20 | |||||||||
Long-term debt to parent | 3.3 | 3.5 | 5.4 | 5.7 | |||||||||||||
Preferred stock | 51.2 | 52.5 | 51.2 | 52 | |||||||||||||
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 | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Other Income and Expenses [Abstract] | |||||||||
MISCELLANEOUS INCOME | Miscellaneous Income | ||||||||
Total miscellaneous income was as follows: | |||||||||
Three Months Ended March 31 | |||||||||
(Millions) | 2015 | 2014 | |||||||
Equity portion of AFUDC | $ | 2.9 | $ | 3.6 | |||||
Earnings from equity method investments | 2.6 | 2.8 | |||||||
Key executive life insurance for retired employees | 0.9 | 0.7 | |||||||
Other | 0.2 | 0.2 | |||||||
Total miscellaneous income | $ | 6.6 | $ | 7.3 | |||||
REGULATORY_ENVIRONMENT
REGULATORY ENVIRONMENT | 3 Months Ended |
Mar. 31, 2015 | |
Regulated Operations [Abstract] | |
REGULATORY ENVIRONMENT | Regulatory Environment |
Wisconsin | |
2016 Rate Case | |
In April 2015, we filed an application with the PSCW to increase retail electric rates $94.1 million and increase retail natural gas rates $9.4 million, with rates expected to be effective January 1, 2016. Our request reflects a 10.20% return on common equity and a target common equity ratio of 50.52% in our regulatory capital structure. The proposed retail electric rate increase is primarily driven by the 2016 expected completion of the ReACT™ emission control technology at Weston 3, the System Modernization and Reliability Project, and technology upgrades at the Fox Energy Center. Also included are increases in expenses for electric transmission, customer service, other operating and maintenance, and general inflation. The proposed retail natural gas rate increase is driven by the expiration of a 2015 customer refund related to decoupling, increased operating and maintenance costs, and general inflation. | |
2015 Rates | |
In December 2014, the PSCW issued a final written order, effective January 1, 2015. It authorized a net retail electric rate increase of $24.6 million and a net retail natural gas rate decrease of $15.4 million, reflecting a 10.20% return on common equity. The order also included a common equity ratio of 50.28% in our regulatory capital structure. The PSCW approved a change in rate design, which includes higher fixed charges to better match the related fixed costs of providing service. | |
The primary driver of the increase in retail electric rates was higher costs of fuel for electric generation of approximately $42 million. In addition, 2015 rates include approximately $9 million of lower refunds to customers related to decoupling over-collections. In 2015 rates, we are refunding approximately $4 million to customers related to 2013 decoupling over-collections compared with refunding approximately $13 million to customers in 2014 rates related to 2012 decoupling over-collections. Absent these adjustments for electric fuel costs and decoupling refunds, we would have realized an electric rate decrease. In addition, we received approval from the PSCW to defer and amortize the undepreciated book value associated with Pulliam 5 and 6 and Weston 1 starting with the actual retirement date in 2015 and concluding by 2023. See Note 7, Commitments and Contingencies, for more information. The PSCW is allowing us to escrow ATC and MISO network transmission expenses for 2015 and 2016. As a result, we defer as a regulatory asset or liability the differences between actual transmission expenses and those included in rates. Finally, the PSCW ordered that 2015 fuel costs should continue to be monitored using a two percent tolerance window. | |
The retail natural gas rate decrease was driven by the approximate $16 million year-over-year negative impact of decoupling refunds to and collections from customers. In 2015 rates, we are refunding approximately $8 million to customers related to 2013 decoupling over-collections compared with recovering approximately $8 million from customers in 2014 rates related to 2012 decoupling under-collections. Absent the adjustment for decoupling refunds to and collections from customers, we would have realized a retail natural gas increase. | |
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, 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 of approximately $8 million 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. 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 for the Pulliam and Weston sites. See Note 7, Commitments and Contingencies, for more information. Additionally, the order required us to terminate our decoupling mechanism, beginning January 1, 2014. | |
Michigan | |
2015 Rates | |
In April 2015, the MPSC issued a final written order, effective April 24, 2015, approving a settlement agreement between us and all parties. The order authorized a retail electric rate increase of $4.0 million to be implemented over three years to recover costs for 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 generation plants. The rates reflect a 10.20% return on common equity and a target common equity ratio of 50.48% in our regulatory capital structure. The increase reflects the continued deferral of costs associated with the Fox Energy Center until the second anniversary of the order. The increase also reflects the deferral of Weston 3 ReACT™ environmental project costs. On the second anniversary of the order, we will discontinue the deferral of Fox Energy Center costs and will begin amortizing this deferral along with the deferral associated with the termination of a tolling agreement related to the Fox Energy Center. We also received approval from the MPSC to defer and amortize the undepreciated book value of the retired plant associated with Pulliam 5 and 6 and Weston 1 starting with the actual retirement date in 2015 and concluding by 2023. Lastly, we will not seek to increase retail electric base rates prior to January 1, 2018. |
SEGMENTS_OF_BUSINESS
SEGMENTS OF BUSINESS | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||
SEGMENTS OF BUSINESS | Segments of Business | ||||||||||||||||||||||||
At March 31, 2015, 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 March 31, 2015 | |||||||||||||||||||||||||
External revenues | $ | 295.8 | $ | 128.9 | $ | 424.7 | $ | — | $ | — | $ | 424.7 | |||||||||||||
Intersegment revenues | — | 2.6 | 2.6 | 0.2 | (2.8 | ) | — | ||||||||||||||||||
Depreciation and amortization expense | 25 | 4.2 | 29.2 | 0.1 | (0.1 | ) | 29.2 | ||||||||||||||||||
Miscellaneous income | 2.8 | 0.1 | 2.9 | 3.7 | — | 6.6 | |||||||||||||||||||
Interest expense | 10.9 | 2.6 | 13.5 | 0.4 | — | 13.9 | |||||||||||||||||||
Provision for income taxes | 16.4 | 5.6 | 22 | 1 | — | 23 | |||||||||||||||||||
Preferred stock dividend requirements | (0.7 | ) | (0.1 | ) | (0.8 | ) | — | — | (0.8 | ) | |||||||||||||||
Net income attributed to common shareholder | 27.9 | 8.9 | 36.8 | 2.2 | — | 39 | |||||||||||||||||||
Regulated Utilities | |||||||||||||||||||||||||
(Millions) | Electric | Natural Gas Utility | Total | Other | Reconciling | WPS | |||||||||||||||||||
Utility | Utility | Eliminations | Consolidated | ||||||||||||||||||||||
Three Months Ended March 31, 2014 | |||||||||||||||||||||||||
External revenues | $ | 321.4 | $ | 234.3 | $ | 555.7 | $ | — | $ | — | $ | 555.7 | |||||||||||||
Intersegment revenues | — | 4.4 | 4.4 | 0.3 | (4.7 | ) | — | ||||||||||||||||||
Depreciation and amortization expense | 23.5 | 4 | 27.5 | 0.2 | (0.1 | ) | 27.6 | ||||||||||||||||||
Miscellaneous income | 3.5 | — | 3.5 | 3.8 | — | 7.3 | |||||||||||||||||||
Interest expense | 10.9 | 2.6 | 13.5 | 0.5 | — | 14 | |||||||||||||||||||
Provision for income taxes | 15.5 | 13.3 | 28.8 | 1 | — | 29.8 | |||||||||||||||||||
Preferred stock dividend requirements | (0.7 | ) | (0.1 | ) | (0.8 | ) | — | — | (0.8 | ) | |||||||||||||||
Net income attributed to common shareholder | 27.2 | 20.7 | 47.9 | 2.4 | — | 50.3 | |||||||||||||||||||
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
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. | |||||||||
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: | |||||||||
(Millions) | March 31, 2015 | 31-Dec-14 | |||||||
Notes payable * | |||||||||
Integrys Energy Group | $ | 3.3 | $ | 5.4 | |||||
Accounts Payable | |||||||||
ATC | 8.4 | 8.2 | |||||||
Liability related to income tax allocation | |||||||||
Integrys Energy Group | 5.9 | 6.1 | |||||||
* | WPS Leasing, our consolidated subsidiary, has a note payable to our parent company, Integrys Energy Group. At March 31, 2015, and December 31, 2014, the current portion of the note payable was $0.5 million and $2.5 million, respectively. | ||||||||
The following table shows activity associated with related party transactions: | |||||||||
Three Months Ended March 31 | |||||||||
(Millions) | 2015 | 2014 | |||||||
Electric transactions | |||||||||
Sales to UPPCO (1) | $ | — | $ | 5.4 | |||||
Natural gas transactions | |||||||||
Sales to IES (2) | — | 0.1 | |||||||
Purchases from IES (2) | — | 2.3 | |||||||
Interest expense (3) | |||||||||
Integrys Energy Group | 0.1 | 0.1 | |||||||
Transactions with equity method investees | |||||||||
Charges from ATC for network transmission services | 25.3 | 24.7 | |||||||
Charges to ATC for services and construction | 2.4 | 2.4 | |||||||
Purchases of energy from WRPC | 1 | 1 | |||||||
Charges to WRPC for operations | 0.3 | 0.4 | |||||||
Equity earnings from WPS Investments, LLC (4) | 2.3 | 2.5 | |||||||
(1) | Integrys Energy Group sold UPPCO in August 2014. | ||||||||
(2) | Integrys Energy Group sold IES's retail energy business in November 2014. | ||||||||
(3) | WPS Leasing, our consolidated subsidiary, has a note payable to our parent company, Integrys Energy Group. | ||||||||
(4) | WPS Investments, LLC is a consolidated subsidiary of Integrys Energy Group that is jointly owned by Integrys Energy Group and us. At March 31, 2015, we had a 10.94% interest in WPS Investments, LLC 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, LLC. |
NEW_ACCOUNTING_PRONOUCEMENTS
NEW ACCOUNTING PRONOUCEMENTS | 3 Months Ended |
Mar. 31, 2015 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
NEW ACCOUNTING PRONOUNCEMENTS | New Accounting Pronouncements |
Recently Issued Accounting Guidance Not Yet Effective | |
In April 2015 the FASB issued ASU 2015-05, "Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement." The ASU provides guidance for determining whether a cloud computing arrangement includes a software license, which should be accounted for consistent with the acquisition of other software licenses. Cloud computing arrangements that do not include a software license should be accounted for as service contracts. This guidance may be applied either prospectively to new cloud computing arrangements, or retrospectively by restating each prior period presented in the financial statements. The guidance is effective for us for the reporting period ending March 31, 2016. We are currently evaluating the impact that the adoption of this standard will have on our financial statements. | |
In April 2015 the FASB issued ASU 2015-03, "Simplifying the Presentation of Debt Issuance Costs." The guidance requires debt issuance costs to be presented on the balance sheet as a reduction to the carrying value of the corresponding debt, rather than as an asset as it is currently presented. The standard requires retrospective application by restating each prior period presented in the financial statements. The guidance is effective for us for the reporting period ending March 31, 2016. We are currently evaluating the impact this guidance will have on our financial statements. | |
In February 2015 the FASB issued ASU 2015-02, "Amendments to the Consolidation Analysis." The guidance focuses on the consolidation evaluation for companies that are required to evaluate whether they should consolidate certain legal entities. It places more emphasis on risk of loss when determining a controlling financial interest and amends the guidance for assessing how relationships of related parties affect the consolidation analysis of variable interest entities. The guidance is effective for us for the reporting period ending March 31, 2016. We are currently evaluating the impact this guidance will have on our financial statements. | |
In January 2015 the FASB issued ASU 2015-01, "Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items." This guidance eliminates the disclosure of extraordinary items, net of tax, in the income statement after income from continuing operations. The guidance is effective for us for the reporting period ending March 31, 2016. We do not currently have any extraordinary items presented on the income statements. However, this guidance will eliminate the need for us to further assess whether unusual and infrequently occurring transactions qualify as extraordinary items in the future. | |
In May 2014 the FASB issued ASU 2014-09, "Revenue from Contracts with Customers." This ASU supersedes the requirements in the Revenue Recognition Topic of the FASB ASC and most industry-specific guidance throughout the ASC. 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 currently effective for us for the reporting period ending March 31, 2017; however, in April 2015 the FASB issued an exposure draft proposing to delay the effective date for one year. 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. We are currently evaluating the impact that the adoption of this standard will have on our financial statements. |
BASIS_OF_PRESENTATION_Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
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, 2014. 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. | |
Reclassifications | Reclassifications |
We reclassified $17.9 million on the statement of cash flows for the three months ended March 31, 2014, from the recoveries and refunds of regulatory assets and liabilities line item to the other current liabilities line item. This reclassification had no impact on total cash flows from operating activities. | |
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. |
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 methods. | |
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. | |
Our risk management assets and liabilities include NYMEX futures and options, physical commodity contracts, and financial transmission rights (FTRs) used to manage transmission congestion costs in the MISO market. When possible, we base the valuations of our risk management assets and liabilities on quoted prices for identical assets in active markets. These valuations are classified in Level 1. The valuations of certain contracts not classified as Level 1 may be based on quoted market prices received from counterparties and/or observable inputs for similar instruments. Transactions valued using these inputs are classified in Level 2. The valuations for certain physical coal contracts are categorized as Level 3 as they are based on significant assumptions made to extrapolate prices from the last quoted period through the end of the transaction term. The valuation for FTRs is derived from historical data from MISO, which is also considered a Level 3 input. See Note 11, Risk Management Activities, for more information. | |
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 supply 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 April 2015 the FASB issued ASU 2015-05, "Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement." The ASU provides guidance for determining whether a cloud computing arrangement includes a software license, which should be accounted for consistent with the acquisition of other software licenses. Cloud computing arrangements that do not include a software license should be accounted for as service contracts. This guidance may be applied either prospectively to new cloud computing arrangements, or retrospectively by restating each prior period presented in the financial statements. The guidance is effective for us for the reporting period ending March 31, 2016. We are currently evaluating the impact that the adoption of this standard will have on our financial statements. |
In April 2015 the FASB issued ASU 2015-03, "Simplifying the Presentation of Debt Issuance Costs." The guidance requires debt issuance costs to be presented on the balance sheet as a reduction to the carrying value of the corresponding debt, rather than as an asset as it is currently presented. The standard requires retrospective application by restating each prior period presented in the financial statements. The guidance is effective for us for the reporting period ending March 31, 2016. We are currently evaluating the impact this guidance will have on our financial statements. | |
In February 2015 the FASB issued ASU 2015-02, "Amendments to the Consolidation Analysis." The guidance focuses on the consolidation evaluation for companies that are required to evaluate whether they should consolidate certain legal entities. It places more emphasis on risk of loss when determining a controlling financial interest and amends the guidance for assessing how relationships of related parties affect the consolidation analysis of variable interest entities. The guidance is effective for us for the reporting period ending March 31, 2016. We are currently evaluating the impact this guidance will have on our financial statements. | |
In January 2015 the FASB issued ASU 2015-01, "Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items." This guidance eliminates the disclosure of extraordinary items, net of tax, in the income statement after income from continuing operations. The guidance is effective for us for the reporting period ending March 31, 2016. We do not currently have any extraordinary items presented on the income statements. However, this guidance will eliminate the need for us to further assess whether unusual and infrequently occurring transactions qualify as extraordinary items in the future. | |
In May 2014 the FASB issued ASU 2014-09, "Revenue from Contracts with Customers." This ASU supersedes the requirements in the Revenue Recognition Topic of the FASB ASC and most industry-specific guidance throughout the ASC. 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 currently effective for us for the reporting period ending March 31, 2017; however, in April 2015 the FASB issued an exposure draft proposing to delay the effective date for one year. 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. We are currently evaluating the impact that the adoption of this standard will have on our financial statements. | |
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 two to three years of historical data. |
GOODWILL_AND_OTHER_INTANGIBLE_1
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||
Schedule of identifiable intangible assets other than goodwill | The identifiable intangible assets other than goodwill listed below are part of other long-term assets on the balance sheets. | ||||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | ||||||||||||||||||||||||
(Millions) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||
Contractual service agreements (1) | $ | 15.6 | $ | (5.1 | ) | $ | 10.5 | $ | 15.6 | $ | (4.3 | ) | $ | 11.3 | |||||||||||
Other (2) | 0.4 | — | 0.4 | — | — | — | |||||||||||||||||||
Total intangible assets | $ | 16 | $ | (5.1 | ) | $ | 10.9 | $ | 15.6 | $ | (4.3 | ) | $ | 11.3 | |||||||||||
-1 | Represents 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. The remaining weighted-average amortization period for these intangible assets at March 31, 2015, was approximately four years. | ||||||||||||||||||||||||
-2 | Consists of an unamortized intangible asset. | ||||||||||||||||||||||||
Schedule of intangible asset amortization | The table below shows the amortization we recorded: | ||||||||||||||||||||||||
Three Months Ended March 31 | |||||||||||||||||||||||||
(Millions) | 2015 | 2014 | |||||||||||||||||||||||
Amortization recorded in depreciation and amortization expense | $ | 0.5 | $ | 0.6 | |||||||||||||||||||||
Amortization recorded in regulatory assets | 0.3 | — | |||||||||||||||||||||||
Schedule of intangible asset amortization for the next five years | The following table shows our estimated amortization for the next five years, including amounts recorded through March 31, 2015: | ||||||||||||||||||||||||
For the Year Ending December 31 | |||||||||||||||||||||||||
(Millions) | 2015 | 2016 | 2017 | 2018 | 2019 | ||||||||||||||||||||
Amortization to be recorded in depreciation and amortization expense | $ | 2.2 | $ | 2.2 | $ | 1.7 | $ | 1.2 | $ | 1.2 | |||||||||||||||
Amortization to be recorded in regulatory assets | 1 | 1 | 0.5 | — | — | ||||||||||||||||||||
SHORTTERM_DEBT_AND_LINES_OF_CR1
SHORT-TERM DEBT AND LINES OF CREDIT (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Short-term Debt [Abstract] | |||||||||||
Schedule of short-term borrowings | Our outstanding short-term borrowings were as follows: | ||||||||||
(Millions, except percentages) | March 31, 2015 | 31-Dec-14 | |||||||||
Commercial paper | $ | 100.4 | * | $ | 145.1 | ||||||
Average interest rate on commercial paper outstanding | 0.32 | % | 0.32 | % | |||||||
* | Maturity dates ranged from April 1, 2015, through April 14, 2015. | ||||||||||
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 | March 31, 2015 | 31-Dec-14 | ||||||||
Revolving credit facility | 5/8/19 | $ | 135 | $ | 135 | ||||||
Revolving credit facility | 6/13/17 | 115 | 115 | ||||||||
Total short-term credit capacity | $ | 250 | $ | 250 | |||||||
Less: | |||||||||||
Commercial paper outstanding | 100.4 | 145.1 | |||||||||
Available capacity under existing agreements | $ | 149.6 | $ | 104.9 | |||||||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Income Tax Disclosure [Abstract] | |||||||
Schedule of effective tax rates | The table below shows our effective tax rates: | ||||||
Three Months Ended March 31 | |||||||
2015 | 2014 | ||||||
Effective tax rate | 36.6 | % | 36.8 | % |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended | ||||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||||
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 March 31, 2015: | ||||||||||||||||||||||||||||||
Payments Due By Period | |||||||||||||||||||||||||||||||
(Millions) | Year Contracts Extend Through | Total Amounts Committed | 2015 | 2016 | 2017 | 2018 | 2019 | Later Years | |||||||||||||||||||||||
Electric utility | |||||||||||||||||||||||||||||||
Purchased power | 2029 | $ | 806.1 | $ | 92.1 | $ | 42.7 | $ | 53.3 | $ | 55.9 | $ | 57.1 | $ | 505 | ||||||||||||||||
Coal supply and transportation | 2019 | 155.8 | 44.3 | 34.8 | 33.5 | 32.1 | 11.1 | — | |||||||||||||||||||||||
Natural gas utility supply and transportation | 2024 | 229.1 | 31.3 | 43.4 | 42.9 | 42.4 | 27.1 | 42 | |||||||||||||||||||||||
Total | $ | 1,191.00 | $ | 167.7 | $ | 120.9 | $ | 129.7 | $ | 130.4 | $ | 95.3 | $ | 547 | |||||||||||||||||
EMPLOYEE_BENEFIT_PLANS_Tables
EMPLOYEE BENEFIT PLANS (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
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 March 31 | Three Months Ended March 31 | ||||||||||||||||
(Millions) | 2015 | 2014 | 2015 | 2014 | |||||||||||||
Service cost | $ | 2.7 | $ | 2.4 | $ | 2.2 | $ | 2.5 | |||||||||
Interest cost | 8 | 8.7 | 2.6 | 3.9 | |||||||||||||
Expected return on plan assets | (16.4 | ) | (16.2 | ) | (4.0 | ) | (4.6 | ) | |||||||||
Loss on plan settlement | 0.1 | — | — | — | |||||||||||||
Amortization of prior service cost (credit) | — | 0.1 | (2.3 | ) | (1.1 | ) | |||||||||||
Amortization of net actuarial loss | 4.9 | 3.7 | 1 | 0.6 | |||||||||||||
Net periodic benefit (credit) cost | $ | (0.7 | ) | $ | (1.3 | ) | $ | (0.5 | ) | $ | 1.3 | ||||||
STOCKBASED_COMPENSATION_Tables
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
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 months ended March 31: | |||||||||||||
Three months ended March 31 | ||||||||||||||
(Millions) | 2015 | 2014 | ||||||||||||
Stock options | $ | — | $ | 0.1 | ||||||||||
Performance stock rights | 0.2 | 0.2 | ||||||||||||
Restricted share units | 1.4 | 1 | ||||||||||||
Total stock-based compensation expense | $ | 1.6 | $ | 1.3 | ||||||||||
Deferred income tax benefit | $ | 0.6 | $ | 0.5 | ||||||||||
Information related to outstanding and exercisable stock options | Information related to outstanding and exercisable stock options at March 31, 2015, is presented below: | |||||||||||||
Stock Options | Weighted-Average | Weighted-Average | Aggregate | |||||||||||
Exercise Price Per | Remaining Contractual | Intrinsic Value | ||||||||||||
Share | Life (in Years) | (Millions) | ||||||||||||
Outstanding at March 31, 2015 | 5,714 | $ | 54.18 | 7.3 | $ | 0.1 | ||||||||
Exercisable at March 31, 2015 | 2,752 | $ | 53.13 | 6.9 | $ | 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 March 31, 2015: | |||||||||||||
Risk-free interest rate | 0.42% – 0.63% | |||||||||||||
Expected dividend yield | 5.25% – 5.33% | |||||||||||||
Expected volatility | 18% – 19% | |||||||||||||
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 three months ended March 31, 2015, is presented below: | |||||||||||||
Restricted Share | Weighted-Average | |||||||||||||
Unit Awards | Grant Date Fair Value | |||||||||||||
Outstanding at December 31, 2014 | 70,544 | $ | 54.46 | |||||||||||
Granted | 30,174 | 77.17 | ||||||||||||
Dividend equivalents | 665 | 64.3 | ||||||||||||
Vested and released | (28,292 | ) | 53.41 | |||||||||||
Transfers | 231 | 55.91 | ||||||||||||
Outstanding at March 31, 2015 | 73,322 | $ | 64.3 | |||||||||||
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 three months ended March 31, 2015, related to performance stock rights accounted for as equity awards is presented below: | |||||||||||||
Performance | Weighted-Average | |||||||||||||
Stock Rights | Fair Value * | |||||||||||||
Outstanding at December 31, 2014 | 3,903 | $ | 58.03 | |||||||||||
Distributed | (2,028 | ) | 78.09 | |||||||||||
Adjustment for final payout | 612 | 78.09 | ||||||||||||
Outstanding at March 31, 2015 | 2,487 | $ | 46.61 | |||||||||||
* | 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 three months ended March 31, 2015, related to performance stock rights accounted for as liability awards is presented below: | |||||||||||||
Performance | ||||||||||||||
Stock Rights | ||||||||||||||
Outstanding at December 31, 2014 | 10,034 | |||||||||||||
Distributed | (201 | ) | ||||||||||||
Adjustment for final payout | 96 | |||||||||||||
Outstanding at March 31, 2015 | 9,929 | |||||||||||||
RISK_MANAGEMENT_ACTIVITIES_Tab
RISK MANAGEMENT ACTIVITIES (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
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: | |||||||||||||
March 31, 2015 | ||||||||||||||
(Millions) | Balance Sheet Presentation * | Assets | Liabilities | |||||||||||
Natural gas contracts | Other current | $ | 0.1 | $ | 1.5 | |||||||||
FTRs | Other current | 0.7 | 0.1 | |||||||||||
Petroleum product contracts | Other current | — | 0.8 | |||||||||||
Coal contracts | Other current | — | 4.3 | |||||||||||
Coal contracts | Other long-term | — | 3.1 | |||||||||||
Other current | 0.8 | 6.7 | ||||||||||||
Other long-term | — | 3.1 | ||||||||||||
Total | $ | 0.8 | $ | 9.8 | ||||||||||
* | We classify assets and liabilities from risk management activities as current or long-term based upon the maturities of the underlying contracts. | |||||||||||||
December 31, 2014 | ||||||||||||||
(Millions) | Balance Sheet Presentation * | Assets | Liabilities | |||||||||||
Natural gas contracts | Other current | $ | 0.1 | $ | 2.1 | |||||||||
Natural gas contracts | Other long-term | — | 0.1 | |||||||||||
FTRs | Other current | 2.2 | 0.3 | |||||||||||
Petroleum product contracts | Other current | — | 1.1 | |||||||||||
Coal contracts | Other current | — | 2.4 | |||||||||||
Coal contracts | Other long-term | — | 1 | |||||||||||
Other current | 2.3 | 5.9 | ||||||||||||
Other long-term | — | 1.1 | ||||||||||||
Total | $ | 2.3 | $ | 7 | ||||||||||
* | 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: | |||||||||||||
March 31, 2015 | ||||||||||||||
(Millions) | Gross Amount | Potential Effects of Netting, Including Cash Collateral | Net Amount | |||||||||||
Derivative assets subject to master netting or similar arrangements | $ | 0.8 | $ | 0.2 | $ | 0.6 | ||||||||
Derivative assets not subject to master netting or similar arrangements | — | — | ||||||||||||
Total risk management assets | $ | 0.8 | $ | 0.6 | ||||||||||
Derivative liabilities subject to master netting or similar arrangements | $ | 2.4 | $ | 2.4 | $ | — | ||||||||
Derivative liabilities not subject to master netting or similar arrangements | 7.4 | 7.4 | ||||||||||||
Total risk management liabilities | $ | 9.8 | $ | 7.4 | ||||||||||
31-Dec-14 | ||||||||||||||
(Millions) | Gross Amount | Potential Effects of Netting, Including Cash Collateral | Net Amount | |||||||||||
Derivative assets subject to master netting or similar arrangements | $ | 2.3 | $ | 0.4 | $ | 1.9 | ||||||||
Derivative assets not subject to master netting or similar arrangements | — | — | ||||||||||||
Total risk management assets | $ | 2.3 | $ | 1.9 | ||||||||||
Derivative liabilities subject to master netting or similar arrangements | $ | 3.6 | $ | 3.6 | $ | — | ||||||||
Derivative liabilities not subject to master netting or similar arrangements | 3.4 | 3.4 | ||||||||||||
Total risk management liabilities | $ | 7 | $ | 3.4 | ||||||||||
Cash collateral positions | The following table shows our cash collateral positions: | |||||||||||||
(Millions) | March 31, 2015 | 31-Dec-14 | ||||||||||||
Cash collateral provided to others related to contracts under master netting or similar arrangements * | $ | 5.9 | $ | 6.6 | ||||||||||
* | Cash collateral provided to others is reflected in other current assets on the balance sheets. | |||||||||||||
Unrealized gains (losses) related to derivatives | The following table shows the unrealized gains (losses) recorded related to derivative contracts: | |||||||||||||
Three Months Ended March 31 | ||||||||||||||
(Millions) | Financial Statement Presentation | 2015 | 2014 | |||||||||||
Natural gas | Balance Sheet — Regulatory assets (current) | $ | 0.9 | $ | 0.2 | |||||||||
Natural gas | Balance Sheet — Regulatory liabilities (current) | (0.1 | ) | 0.1 | ||||||||||
FTRs | Balance Sheet — Regulatory assets (current) | 0.2 | 0.1 | |||||||||||
FTRs | Balance Sheet — Regulatory liabilities (current) | (0.4 | ) | (0.1 | ) | |||||||||
Petroleum | Balance Sheet — Regulatory assets (current) | 0.4 | — | |||||||||||
Coal | Balance Sheet — Regulatory assets (current) | (2.6 | ) | 0.2 | ||||||||||
Coal | Balance Sheet — Regulatory assets (long-term) | (2.0 | ) | 0.4 | ||||||||||
Coal | Balance Sheet — Regulatory liabilities (long-term) | — | 1.6 | |||||||||||
Notional volumes of outstanding derivative contracts | We had the following notional volumes of outstanding derivative contracts: | |||||||||||||
(Millions) | March 31, 2015 | 31-Dec-14 | ||||||||||||
Commodity | Purchases | Other Transactions | Purchases | Other Transactions | ||||||||||
Natural gas (therms) | 53.4 | N/A | 1,025.40 | N/A | ||||||||||
FTRs (kilowatt-hours) | N/A | 2,111.10 | N/A | 4,287.70 | ||||||||||
Petroleum products (barrels) | 0.1 | N/A | — | N/A | ||||||||||
Coal contract (tons) | 2.6 | N/A | 3 | N/A | ||||||||||
FAIR_VALUE_Tables
FAIR VALUE (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
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: | ||||||||||||||||
March 31, 2015 | |||||||||||||||||
(Millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Risk management assets | |||||||||||||||||
Natural gas contracts | $ | 0.1 | $ | — | $ | — | $ | 0.1 | |||||||||
Financial transmission rights (FTRs) | — | — | 0.7 | 0.7 | |||||||||||||
Total | $ | 0.1 | $ | — | $ | 0.7 | $ | 0.8 | |||||||||
Risk management liabilities | |||||||||||||||||
Natural gas contracts | $ | 1.5 | $ | — | $ | — | $ | 1.5 | |||||||||
FTRs | — | — | 0.1 | 0.1 | |||||||||||||
Petroleum product contracts | 0.8 | — | — | 0.8 | |||||||||||||
Coal contracts | — | 1.2 | 6.2 | 7.4 | |||||||||||||
Total | $ | 2.3 | $ | 1.2 | $ | 6.3 | $ | 9.8 | |||||||||
December 31, 2014 | |||||||||||||||||
(Millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Risk management assets | |||||||||||||||||
Natural gas contracts | $ | — | $ | 0.1 | $ | — | $ | 0.1 | |||||||||
FTRs | — | — | 2.2 | 2.2 | |||||||||||||
Total | $ | — | $ | 0.1 | $ | 2.2 | $ | 2.3 | |||||||||
Risk management liabilities | |||||||||||||||||
Natural gas contracts | $ | 2.2 | $ | — | $ | — | $ | 2.2 | |||||||||
FTRs | — | — | 0.3 | 0.3 | |||||||||||||
Petroleum product contracts | 1.1 | — | — | 1.1 | |||||||||||||
Coal contracts | — | 1.2 | 2.2 | 3.4 | |||||||||||||
Total | $ | 3.3 | $ | 1.2 | $ | 2.5 | $ | 7 | |||||||||
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 March 31, 2015: | ||||||||||||||||
Fair Value (Millions) | |||||||||||||||||
Assets | Liabilities | Valuation Technique | Unobservable Input | Average or Range | |||||||||||||
FTRs | $ | 0.7 | $ | 0.1 | Market-based | Forward market prices ($/megawatt-month) (1) | $159.42 | ||||||||||
Coal contracts | — | 6.2 | Market-based | Forward market prices ($/ton) (2) | $9.70 – $12.39 | ||||||||||||
(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 March 31, 2015 | |||||||||||||||||
(Millions) | FTRs | Coal Contracts | Total | ||||||||||||||
Balance at the beginning of period | $ | 1.9 | $ | (2.2 | ) | $ | (0.3 | ) | |||||||||
Net realized losses included in earnings | (1.2 | ) | — | (1.2 | ) | ||||||||||||
Net unrealized losses recorded as regulatory assets or liabilities | (0.2 | ) | (4.3 | ) | (4.5 | ) | |||||||||||
Settlements | 0.1 | 0.3 | 0.4 | ||||||||||||||
Balance at the end of period | $ | 0.6 | $ | (6.2 | ) | $ | (5.6 | ) | |||||||||
Three Months Ended March 31, 2014 | |||||||||||||||||
(Millions) | FTRs | Coal Contracts | Total | ||||||||||||||
Balance at the beginning of period | $ | 1.2 | $ | (2.5 | ) | $ | (1.3 | ) | |||||||||
Net realized gains included in earnings | 0.7 | — | 0.7 | ||||||||||||||
Net unrealized gains recorded as regulatory assets or liabilities | — | 2.2 | 2.2 | ||||||||||||||
Purchases | (0.1 | ) | — | (0.1 | ) | ||||||||||||
Settlements | (1.3 | ) | 0.6 | (0.7 | ) | ||||||||||||
Balance at the end of period | $ | 0.5 | $ | 0.3 | $ | 0.8 | |||||||||||
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: | ||||||||||||||||
March 31, 2015 | 31-Dec-14 | ||||||||||||||||
(Millions) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||
Long-term debt | $ | 1,174.50 | $ | 1,318.80 | $ | 1,174.50 | $ | 1,286.20 | |||||||||
Long-term debt to parent | 3.3 | 3.5 | 5.4 | 5.7 | |||||||||||||
Preferred stock | 51.2 | 52.5 | 51.2 | 52 | |||||||||||||
MISCELLANEOUS_INCOME_Tables
MISCELLANEOUS INCOME (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Other Income and Expenses [Abstract] | |||||||||
Schedule of Other Nonoperating Income (Expense) | Total miscellaneous income was as follows: | ||||||||
Three Months Ended March 31 | |||||||||
(Millions) | 2015 | 2014 | |||||||
Equity portion of AFUDC | $ | 2.9 | $ | 3.6 | |||||
Earnings from equity method investments | 2.6 | 2.8 | |||||||
Key executive life insurance for retired employees | 0.9 | 0.7 | |||||||
Other | 0.2 | 0.2 | |||||||
Total miscellaneous income | $ | 6.6 | $ | 7.3 | |||||
SEGMENTS_OF_BUSINESS_Tables
SEGMENTS OF BUSINESS (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
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 March 31, 2015 | |||||||||||||||||||||||||
External revenues | $ | 295.8 | $ | 128.9 | $ | 424.7 | $ | — | $ | — | $ | 424.7 | |||||||||||||
Intersegment revenues | — | 2.6 | 2.6 | 0.2 | (2.8 | ) | — | ||||||||||||||||||
Depreciation and amortization expense | 25 | 4.2 | 29.2 | 0.1 | (0.1 | ) | 29.2 | ||||||||||||||||||
Miscellaneous income | 2.8 | 0.1 | 2.9 | 3.7 | — | 6.6 | |||||||||||||||||||
Interest expense | 10.9 | 2.6 | 13.5 | 0.4 | — | 13.9 | |||||||||||||||||||
Provision for income taxes | 16.4 | 5.6 | 22 | 1 | — | 23 | |||||||||||||||||||
Preferred stock dividend requirements | (0.7 | ) | (0.1 | ) | (0.8 | ) | — | — | (0.8 | ) | |||||||||||||||
Net income attributed to common shareholder | 27.9 | 8.9 | 36.8 | 2.2 | — | 39 | |||||||||||||||||||
Regulated Utilities | |||||||||||||||||||||||||
(Millions) | Electric | Natural Gas Utility | Total | Other | Reconciling | WPS | |||||||||||||||||||
Utility | Utility | Eliminations | Consolidated | ||||||||||||||||||||||
Three Months Ended March 31, 2014 | |||||||||||||||||||||||||
External revenues | $ | 321.4 | $ | 234.3 | $ | 555.7 | $ | — | $ | — | $ | 555.7 | |||||||||||||
Intersegment revenues | — | 4.4 | 4.4 | 0.3 | (4.7 | ) | — | ||||||||||||||||||
Depreciation and amortization expense | 23.5 | 4 | 27.5 | 0.2 | (0.1 | ) | 27.6 | ||||||||||||||||||
Miscellaneous income | 3.5 | — | 3.5 | 3.8 | — | 7.3 | |||||||||||||||||||
Interest expense | 10.9 | 2.6 | 13.5 | 0.5 | — | 14 | |||||||||||||||||||
Provision for income taxes | 15.5 | 13.3 | 28.8 | 1 | — | 29.8 | |||||||||||||||||||
Preferred stock dividend requirements | (0.7 | ) | (0.1 | ) | (0.8 | ) | — | — | (0.8 | ) | |||||||||||||||
Net income attributed to common shareholder | 27.2 | 20.7 | 47.9 | 2.4 | — | 50.3 | |||||||||||||||||||
RELATED_PARTY_TRANSACTIONS_Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
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: | ||||||||
(Millions) | March 31, 2015 | 31-Dec-14 | |||||||
Notes payable * | |||||||||
Integrys Energy Group | $ | 3.3 | $ | 5.4 | |||||
Accounts Payable | |||||||||
ATC | 8.4 | 8.2 | |||||||
Liability related to income tax allocation | |||||||||
Integrys Energy Group | 5.9 | 6.1 | |||||||
* | WPS Leasing, our consolidated subsidiary, has a note payable to our parent company, Integrys Energy Group. At March 31, 2015, and December 31, 2014, the current portion of the note payable was $0.5 million and $2.5 million, respectively. | ||||||||
Schedule of activity associated with related party transactions | The following table shows activity associated with related party transactions: | ||||||||
Three Months Ended March 31 | |||||||||
(Millions) | 2015 | 2014 | |||||||
Electric transactions | |||||||||
Sales to UPPCO (1) | $ | — | $ | 5.4 | |||||
Natural gas transactions | |||||||||
Sales to IES (2) | — | 0.1 | |||||||
Purchases from IES (2) | — | 2.3 | |||||||
Interest expense (3) | |||||||||
Integrys Energy Group | 0.1 | 0.1 | |||||||
Transactions with equity method investees | |||||||||
Charges from ATC for network transmission services | 25.3 | 24.7 | |||||||
Charges to ATC for services and construction | 2.4 | 2.4 | |||||||
Purchases of energy from WRPC | 1 | 1 | |||||||
Charges to WRPC for operations | 0.3 | 0.4 | |||||||
Equity earnings from WPS Investments, LLC (4) | 2.3 | 2.5 | |||||||
(1) | Integrys Energy Group sold UPPCO in August 2014. | ||||||||
(2) | Integrys Energy Group sold IES's retail energy business in November 2014. | ||||||||
(3) | WPS Leasing, our consolidated subsidiary, has a note payable to our parent company, Integrys Energy Group. | ||||||||
(4) | WPS Investments, LLC is a consolidated subsidiary of Integrys Energy Group that is jointly owned by Integrys Energy Group and us. At March 31, 2015, we had a 10.94% interest in WPS Investments, LLC 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, LLC. |
BASIS_OF_PRESENTATION_Details
BASIS OF PRESENTATION (Details) (Cash flow statement reclassification, Reclassification, USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2014 |
Cash flow statement reclassification | Reclassification | |
Reclassification from recoveries and refunds of regulatory assets and liabilities to other current liabilities | $17.90 |
CASH_AND_CASH_EQUIVALENTS_Deta
CASH AND CASH EQUIVALENTS (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash and Cash Equivalents [Abstract] | ||
Construction costs funded through accounts payable | $49.10 | $35 |
GOODWILL_AND_OTHER_INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Goodwill and other intangible assets | |||
Changes to the carrying amount of goodwill | $0 | $0 | |
Total intangible assets, gross carrying amount | 16 | 15.6 | |
Total intangible assets, net | 10.9 | 11.3 | |
Amortized intangible assets | |||
Accumulated amortization of intangible assets | -5.1 | -4.3 | |
Amortization for the next five years | |||
Future amortization period | 5 years | ||
Regulatory assets | |||
Amortized intangible assets | |||
Amortization | 0.3 | 0 | |
Amortization for the next five years | |||
Amortization, 2015 | 1 | ||
Amortization, 2016 | 1 | ||
Amortization, 2017 | 0.5 | ||
Amortization, 2018 | 0 | ||
Amortization, 2019 | 0 | ||
Depreciation and amortization expense | |||
Amortized intangible assets | |||
Amortization | 0.5 | 0.6 | |
Amortization for the next five years | |||
Amortization, 2015 | 2.2 | ||
Amortization, 2016 | 2.2 | ||
Amortization, 2017 | 1.7 | ||
Amortization, 2018 | 1.2 | ||
Amortization, 2019 | 1.2 | ||
Other unamortized intangible assets | |||
Unamortized intangible assets | |||
Unamortized intangible assets, carrying amount | 0.4 | 0 | |
Contractual service agreements | |||
Amortized intangible assets | |||
Amortized intangible assets, gross carrying amount | 15.6 | 15.6 | |
Accumulated amortization of intangible assets | -5.1 | -4.3 | |
Amortized intangible assets, net | $10.50 | $11.30 | |
Weighted-average amortization period | 4 years |
SHORTTERM_DEBT_AND_LINES_OF_CR2
SHORT-TERM DEBT AND LINES OF CREDIT - SHORT-TERM BORROWINGS (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Short-term borrowings | |||
Short-term borrowings outstanding | $100.40 | $145.10 | |
Commercial paper | |||
Short-term borrowings | |||
Short-term borrowings outstanding | 100.4 | 145.1 | |
Average interest rate (as a percent) | 0.32% | 0.32% | |
Average amount of short-term borrowings outstanding | $116.50 | $9.10 |
SHORTTERM_DEBT_AND_LINES_OF_CR3
SHORT-TERM DEBT AND LINES OF CREDIT - REVOLVING CREDIT FACILITIES (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Short-term borrowings | ||
Total short-term credit capacity | $250 | $250 |
Short-term borrowings outstanding | 100.4 | 145.1 |
Available capacity under existing agreements | 149.6 | 104.9 |
Revolving Credit Facility, Maturing May 8, 2019 | ||
Short-term borrowings | ||
Total short-term credit capacity | 135 | 135 |
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 | $100.40 | $145.10 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Income Tax Disclosure [Abstract] | |||
Effective tax rate (as a percent) | 36.60% | 36.80% | |
Federal statutory tax rate (as a percent) | 35.00% | 35.00% | |
Unrecognized Tax Benefits | $0 | $0 |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES - UNCONDITIONAL PURCHASE OBLIGATIONS (Details) (USD $) | Mar. 31, 2015 |
In Millions, unless otherwise specified | |
Minimum future commitments for purchase obligations | |
Total Amounts Committed | $1,191 |
2015 | 167.7 |
2016 | 120.9 |
2017 | 129.7 |
2018 | 130.4 |
2019 | 95.3 |
Later Years | 547 |
Purchased power | Electric Utility | |
Minimum future commitments for purchase obligations | |
Total Amounts Committed | 806.1 |
2015 | 92.1 |
2016 | 42.7 |
2017 | 53.3 |
2018 | 55.9 |
2019 | 57.1 |
Later Years | 505 |
Coal supply and transportation | Electric Utility | |
Minimum future commitments for purchase obligations | |
Total Amounts Committed | 155.8 |
2015 | 44.3 |
2016 | 34.8 |
2017 | 33.5 |
2018 | 32.1 |
2019 | 11.1 |
Later Years | 0 |
Natural gas utility supply and transportation | Natural Gas Utility | |
Minimum future commitments for purchase obligations | |
Total Amounts Committed | 229.1 |
2015 | 31.3 |
2016 | 43.4 |
2017 | 42.9 |
2018 | 42.4 |
2019 | 27.1 |
Later Years | $42 |
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 | Oct. 31, 2014 | Mar. 31, 2015 |
Weston and Pulliam plants | Electric Utility | ||||
Air Permitting Violation Claims | ||||
Beneficial environmental project amount | $6 | |||
Civil penalty and/or legal fees | 1.2 | |||
Columbia and Edgewater jointly-owned plants | Electric Utility | ||||
Air Permitting Violation Claims | ||||
Beneficial environmental project amount | 1.3 | |||
Civil penalty and/or legal fees | 0.4 | |||
Sulfur dioxide and nitrogen Oxide | Electric Utility | ||||
Mercury and Interstate Air Quality Rules | ||||
EPA change to compliance deadline for Cross State Air Pollution Rule | 3 years | |||
Clean Water Act rule | Electric Utility | ||||
Clean Water Act Rule | ||||
Number of units equipped with cooling towers | 2 | |||
Manufactured gas plant remediation | Natural Gas Utility | ||||
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 | 82.7 | |||
Environmental remediation cash expenditures not yet recovered in rates | 18.7 | |||
Regulatory assets recorded for cash and estimated future remediation expenditures, net of insurance recoveries received | 101.4 |
EMPLOYEE_BENEFIT_PLANS_Details
EMPLOYEE BENEFIT PLANS (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Pension Benefits | ||
Components of net periodic benefit cost (including amounts capitalized to the balance sheets) | ||
Service cost | $2.70 | $2.40 |
Interest cost | 8 | 8.7 |
Expected return on plan assets | -16.4 | -16.2 |
Loss on plan settlement | 0.1 | 0 |
Amortization of prior service cost (credit) | 0 | 0.1 |
Amortization of net actuarial loss | 4.9 | 3.7 |
Net periodic benefit (credit) cost | -0.7 | -1.3 |
Contributions to the plans | 0.4 | |
Expected contributions to the plans during the remainder of fiscal year | 0.8 | |
Other Postretirement Benefits | ||
Components of net periodic benefit cost (including amounts capitalized to the balance sheets) | ||
Service cost | 2.2 | 2.5 |
Interest cost | 2.6 | 3.9 |
Expected return on plan assets | -4 | -4.6 |
Loss on plan settlement | 0 | 0 |
Amortization of prior service cost (credit) | -2.3 | -1.1 |
Amortization of net actuarial loss | 1 | 0.6 |
Net periodic benefit (credit) cost | -0.5 | 1.3 |
Contributions to the plans | 0.1 | |
Expected contributions to the plans during the remainder of fiscal year | $1.30 |
STOCKBASED_COMPENSATION_STOCKB
STOCK-BASED COMPENSATION – STOCK-BASED COMPENSATION EXPENSE (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Information related to share based awards | ||
Total stock-based compensation expense | $1.60 | $1.30 |
Deferred income tax benefit | 0.6 | 0.5 |
Stock-based compensation cost capitalized | 0 | 0 |
Stock Options | ||
Information related to share based awards | ||
Total stock-based compensation expense | 0 | 0.1 |
Performance Stock Rights | ||
Information related to share based awards | ||
Total stock-based compensation expense | 0.2 | 0.2 |
Restricted Share Units | ||
Information related to share based awards | ||
Total stock-based compensation expense | $1.40 | $1 |
STOCKBASED_COMPENSATION_STOCK_
STOCK-BASED COMPENSATION – STOCK OPTIONS (Details) (Stock Options, USD $) | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Stock Options | ||
Weighted-average fair values along with the assumptions incorporated into the valuation models | ||
Weighted-average fair value per stock option granted (in dollars per share) | $6.70 | |
Stock Options | ||
Outstanding, at the end of the period (in shares) | 5,714 | |
Exercisable at the end of the period (in shares) | 2,752 | |
Exercised (in shares) | 0 | |
Granted (in shares) | 0 | |
Weighted-Average Exercise Price Per Share | ||
Outstanding at the end of the period (in dollars per share) | $54.18 | |
Exercisable at the end of the period (in dollars per share) | $53.13 | |
Weighted-Average Remaining Contractual Life (in Years) | ||
Outstanding at the end of the period | 7 years 4 months | |
Exercisable at the end of the period | 6 years 11 months | |
Aggregate Intrinsic Value | ||
Outstanding at the end of the period (in dollars) | $0.10 | |
Exercisable at the end of the period (in dollars) | $0.10 |
STOCKBASED_COMPENSATION_PERFOR
STOCK-BASED COMPENSATION – PERFORMANCE STOCK RIGHTS (Details) (USD $) | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Performance Stock Rights | ||
Assumptions incorporated into the valuation models | ||
Risk-free interest rate, minimum (as a percent) | 0.42% | |
Risk-free interest rate, maximum (as a percent) | 0.63% | |
Expected volatility, minimum (as a percent) | 18.00% | |
Expected volatility, maximum (as a percent) | 19.00% | |
Performance Stock Rights | ||
Distributed (in shares) | 0 | |
Granted (in shares) | 0 | |
Additional Disclosures | ||
Compensation cost not yet recognized | $1.60 | |
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 | 2 years | |
Expected dividend yield (as a percent) | 5.25% | |
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) | 3,903 | |
Distributed (in shares) | -2,028 | |
Adjustment for for final payout (in shares) | 612 | |
Outstanding at the end of the period (in shares) | 2,487 | |
Weighted-Average Fair Value | ||
Outstanding at the beginning of the period (in dollars per share) | $58.03 | |
Distributed (in dollars per share) | $78.09 | |
Adjustment for final payout (in dollars per share) | $78.09 | |
Outstanding at the end of the period (in dollars per share) | $46.61 | |
Granted (in dollars per share) | 44.28 | |
Performance Stock Rights Accounted for as Liability Awards | ||
Performance Stock Rights | ||
Outstanding at the beginning of the period (in shares) | 10,034 | |
Distributed (in shares) | -201 | |
Adjustment for for final payout (in shares) | 96 | |
Outstanding at the end of the period (in shares) | 9,929 | |
Weighted-Average Fair Value | ||
Outstanding at the end of the period, fair value as of the reporting date (in dollars per shares) | $107.05 |
STOCKBASED_COMPENSATION_RESTRI
STOCK-BASED COMPENSATION – RESTRICTED SHARE UNITS (Details) (Restricted Share Units, USD $) | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Restricted Share Units | ||
Restricted Share Unit Awards | ||
Outstanding at the beginning of the period (in shares) | 70,544 | |
Granted (in shares) | 30,174 | |
Dividend equivalents (in shares) | 665 | |
Vested and released (in shares) | -28,292 | |
Transfers (in shares) | 231 | |
Outstanding at the end of the period (in shares) | 73,322 | |
Weighted-Average Grant Date Fair Value | ||
Outstanding at the beginning of the period (in dollars per share) | $54.46 | |
Granted (in dollars per share) | $77.17 | $55.23 |
Dividend equivalents (in dollars per shares) | $64.30 | |
Vested and released (in dollars per shares) | $53.41 | |
Transfers (in dollars per share) | $55.91 | |
Outstanding at the end of the period (in dollars per share) | $64.30 | |
Additional Disclosures | ||
Total intrinsic value of restricted share units vested and released | $2.20 | $1.50 |
Compensation cost not yet recognized | $9.30 | |
Weighted-average period over which compensation cost is to be recognized | 2 years 7 months |
COMMON_EQUITY_Details
COMMON EQUITY (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Dividend Payment Restrictions | ||
Maximum debt to capitalization ratio required to be maintained (as a percent) | 65.00% | |
Total restricted retained earnings | $528.90 | |
Equity in undistributed earnings of 50% or less owned investees accounted under equity method investments | 31.9 | |
Capital Transactions with Parent | ||
Common stock dividends paid | 28.8 | 28 |
Maximum | ||
Dividend Payment Restrictions | ||
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 | $28.80 |
RISK_MANAGEMENT_ACTIVITIES_RIS
RISK MANAGEMENT ACTIVITIES - RISK MANAGEMENT ASSETS AND LIABILITIES (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Derivative Asset [Abstract] | ||
Risk Management Asset | $0.80 | $2.30 |
Derivative Liability [Abstract] | ||
Risk Management Liability | 9.8 | 7 |
Designated as hedging instrument | ||
Derivative, Number of Instruments Held [Abstract] | ||
Number of derivative instruments held | 0 | |
Non-hedge derivatives | ||
Derivative Asset [Abstract] | ||
Other current assets from risk management activities | 0.8 | 2.3 |
Other long-term assets from risk management activities | 0 | 0 |
Risk Management Asset | 0.8 | 2.3 |
Derivative Liability [Abstract] | ||
Other current liabilities from risk management activities | 6.7 | 5.9 |
Other long-term liabilities from risk management activities | 3.1 | 1.1 |
Risk Management Liability | 9.8 | 7 |
Non-hedge derivatives | Natural gas contracts | ||
Derivative Asset [Abstract] | ||
Other current assets from risk management activities | 0.1 | 0.1 |
Other long-term assets from risk management activities | 0 | |
Derivative Liability [Abstract] | ||
Other current liabilities from risk management activities | 1.5 | 2.1 |
Other long-term liabilities from risk management activities | 0.1 | |
Non-hedge derivatives | FTRs | ||
Derivative Asset [Abstract] | ||
Other current assets from risk management activities | 0.7 | 2.2 |
Derivative Liability [Abstract] | ||
Other current liabilities from risk management activities | 0.1 | 0.3 |
Non-hedge derivatives | Petroleum product contracts | ||
Derivative Asset [Abstract] | ||
Other current assets from risk management activities | 0 | 0 |
Derivative Liability [Abstract] | ||
Other current liabilities from risk management activities | 0.8 | 1.1 |
Non-hedge derivatives | Coal contracts | ||
Derivative Asset [Abstract] | ||
Other current assets from risk management activities | 0 | 0 |
Other long-term assets from risk management activities | 0 | 0 |
Derivative Liability [Abstract] | ||
Other current liabilities from risk management activities | 4.3 | 2.4 |
Other long-term liabilities from risk management activities | $3.10 | $1 |
RISK_MANAGEMENT_ACTIVITIES_NET
RISK MANAGEMENT ACTIVITIES - NETTING ARRANGEMENTS AND CASH COLLATERAL (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Assets | ||
Derivative assets subject to master netting or similar arrangements, gross amount | $0.80 | $2.30 |
Potential effects of netting, including cash collateral | 0.2 | 0.4 |
Derivative assets subject to master netting or similar arrangements, net amount | 0.6 | 1.9 |
Derivative assets not subject to master netting arrangement | 0 | 0 |
Risk Management Asset | 0.8 | 2.3 |
Total Risk Management Assets, Net Amount | 0.6 | 1.9 |
Liabilities | ||
Derivative liabilities subject to master netting or similar arrangements, gross amount | 2.4 | 3.6 |
Potential effects of netting, including cash collateral | 2.4 | 3.6 |
Derivative liabilities subject to master netting or similar arrangements, net amount | 0 | 0 |
Derivative liabilities not subject to master netting arrangement | 7.4 | 3.4 |
Risk Management Liability | 9.8 | 7 |
Total Risk Management Liabilities, Net Amount | 7.4 | 3.4 |
Cash collateral | ||
Cash collateral provided to others related to contracts under master netting or similar arrangements | $5.90 | $6.60 |
RISK_MANAGEMENT_ACTIVITIES_UNR
RISK MANAGEMENT ACTIVITIES - UNREALIZED GAINS AND LOSSES (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Natural gas contracts | Balance Sheet - Regulatory assets (current) | ||
Risk management activities | ||
Unrealized gain (loss) related to non-hedge derivative contracts | $0.90 | $0.20 |
Natural gas contracts | Balance Sheet - Regulatory liabilities (current) | ||
Risk management activities | ||
Unrealized gain (loss) related to non-hedge derivative contracts | -0.1 | 0.1 |
FTRs | Balance Sheet - Regulatory assets (current) | ||
Risk management activities | ||
Unrealized gain (loss) related to non-hedge derivative contracts | 0.2 | 0.1 |
FTRs | Balance Sheet - Regulatory liabilities (current) | ||
Risk management activities | ||
Unrealized gain (loss) related to non-hedge derivative contracts | -0.4 | -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 |
Coal contracts | Balance Sheet - Regulatory assets (current) | ||
Risk management activities | ||
Unrealized gain (loss) related to non-hedge derivative contracts | -2.6 | 0.2 |
Coal contracts | Balance Sheet - Regulatory assets (long Term) | ||
Risk management activities | ||
Unrealized gain (loss) related to non-hedge derivative contracts | -2 | 0.4 |
Coal contracts | Balance Sheet - Regulatory liabilities (long-term) | ||
Risk management activities | ||
Unrealized gain (loss) related to non-hedge derivative contracts | $0 | $1.60 |
RISK_MANAGEMENT_ACTIVITIES_NOT
RISK MANAGEMENT ACTIVITIES - NOTIONAL VOLUMES (Details) (Non-hedge derivatives) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
MMBTU | MMBTU | |
Natural gas contracts | Purchases | ||
Risk management activities | ||
Notional volume of outstanding derivative contracts (mmbtu or kwh) | 5,340,000 | 102,540,000 |
FTRs | Other Transactions | ||
Risk management activities | ||
Notional volume of outstanding derivative contracts (mmbtu or kwh) | 2,111,100,000 | 4,287,700,000 |
Petroleum product contracts | Purchases | ||
Risk management activities | ||
Notional volume of outstanding derivative contracts (barrels) | 100,000 | 0 |
Coal contracts | Purchases | ||
Risk management activities | ||
Notional volume of outstanding derivative contracts (tons) | 2,600,000 | 3,000,000 |
FAIR_VALUE_ASSETS_AND_LIABILIT
FAIR VALUE - ASSETS AND LIABILITIES MEASURED ON A RECURRING BASIS (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Assets | |||
Risk Management Asset | $0.80 | $2.30 | |
Liabilities | |||
Risk Management Liability | 9.8 | 7 | |
Transfers Between the Levels of the Fair Value Hierarchy | |||
Fair Value Transfers, Amount | 0 | 0 | |
Fair value measurements on a recurring basis | Level 1 | |||
Assets | |||
Risk Management Asset | 0.1 | 0 | |
Liabilities | |||
Risk Management Liability | 2.3 | 3.3 | |
Fair value measurements on a recurring basis | Level 2 | |||
Assets | |||
Risk Management Asset | 0 | 0.1 | |
Liabilities | |||
Risk Management Liability | 1.2 | 1.2 | |
Fair value measurements on a recurring basis | Level 3 | |||
Assets | |||
Risk Management Asset | 0.7 | 2.2 | |
Liabilities | |||
Risk Management Liability | 6.3 | 2.5 | |
Fair value measurements on a recurring basis | Total | |||
Assets | |||
Risk Management Asset | 0.8 | 2.3 | |
Liabilities | |||
Risk Management Liability | 9.8 | 7 | |
Fair value measurements on a recurring basis | Natural gas contracts | Level 1 | |||
Assets | |||
Risk Management Asset | 0.1 | 0 | |
Liabilities | |||
Risk Management Liability | 1.5 | 2.2 | |
Fair value measurements on a recurring basis | Natural gas contracts | Level 2 | |||
Assets | |||
Risk Management Asset | 0 | 0.1 | |
Liabilities | |||
Risk Management Liability | 0 | 0 | |
Fair value measurements on a recurring basis | Natural gas contracts | Level 3 | |||
Assets | |||
Risk Management Asset | 0 | 0 | |
Liabilities | |||
Risk Management Liability | 0 | 0 | |
Fair value measurements on a recurring basis | Natural gas contracts | Total | |||
Assets | |||
Risk Management Asset | 0.1 | 0.1 | |
Liabilities | |||
Risk Management Liability | 1.5 | 2.2 | |
Fair value measurements on a recurring basis | FTRs | Level 1 | |||
Assets | |||
Risk Management Asset | 0 | 0 | |
Liabilities | |||
Risk Management Liability | 0 | 0 | |
Fair value measurements on a recurring basis | FTRs | Level 2 | |||
Assets | |||
Risk Management Asset | 0 | 0 | |
Liabilities | |||
Risk Management Liability | 0 | 0 | |
Fair value measurements on a recurring basis | FTRs | Level 3 | |||
Assets | |||
Risk Management Asset | 0.7 | 2.2 | |
Liabilities | |||
Risk Management Liability | 0.1 | 0.3 | |
Fair value measurements on a recurring basis | FTRs | Total | |||
Assets | |||
Risk Management Asset | 0.7 | 2.2 | |
Liabilities | |||
Risk Management Liability | 0.1 | 0.3 | |
Fair value measurements on a recurring basis | Petroleum product contracts | Level 1 | |||
Liabilities | |||
Risk Management Liability | 0.8 | 1.1 | |
Fair value measurements on a recurring basis | Petroleum product contracts | Level 2 | |||
Liabilities | |||
Risk Management Liability | 0 | 0 | |
Fair value measurements on a recurring basis | Petroleum product contracts | Level 3 | |||
Liabilities | |||
Risk Management Liability | 0 | 0 | |
Fair value measurements on a recurring basis | Petroleum product contracts | Total | |||
Liabilities | |||
Risk Management Liability | 0.8 | 1.1 | |
Fair value measurements on a recurring basis | Coal contracts | Level 1 | |||
Liabilities | |||
Risk Management Liability | 0 | 0 | |
Fair value measurements on a recurring basis | Coal contracts | Level 2 | |||
Liabilities | |||
Risk Management Liability | 1.2 | 1.2 | |
Fair value measurements on a recurring basis | Coal contracts | Level 3 | |||
Assets | |||
Risk Management Asset | 0 | ||
Liabilities | |||
Risk Management Liability | 6.2 | 2.2 | |
Fair value measurements on a recurring basis | Coal contracts | Total | |||
Liabilities | |||
Risk Management Liability | $7.40 | $3.40 |
FAIR_VALUE_SIGNIFICANT_UNOBSER
FAIR VALUE - SIGNIFICANT UNOBSERVABLE INPUTS (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Fair Value Inputs Assets and Liabilities Quantitative Information | ||
Risk Management Asset | $0.80 | $2.30 |
Risk Management Liability | 9.8 | 7 |
Fair value measurements on a recurring basis | Level 3 | ||
Fair Value Inputs Assets and Liabilities Quantitative Information | ||
Risk Management Asset | 0.7 | 2.2 |
Risk Management Liability | 6.3 | 2.5 |
Fair value measurements on a recurring basis | FTRs | Level 3 | ||
Fair Value Inputs Assets and Liabilities Quantitative Information | ||
Risk Management Asset | 0.7 | 2.2 |
Risk Management Liability | 0.1 | 0.3 |
Fair value measurements on a recurring basis | FTRs | Level 3 | Valuation Technique: Market-based | Average | ||
Fair Value Inputs | ||
Forward market prices (in dollars per megawatt-month or ton) | 159.42 | |
Fair value measurements on a recurring basis | Coal contracts | Level 3 | ||
Fair Value Inputs Assets and Liabilities Quantitative Information | ||
Risk Management Asset | 0 | |
Risk Management Liability | $6.20 | $2.20 |
Fair value measurements on a recurring basis | Coal contracts | Level 3 | Valuation Technique: Market-based | Minimum | ||
Fair Value Inputs | ||
Forward market prices (in dollars per megawatt-month or ton) | 9.7 | |
Fair value measurements on a recurring basis | Coal contracts | Level 3 | Valuation Technique: Market-based | Maximum | ||
Fair Value Inputs | ||
Forward market prices (in dollars per megawatt-month or ton) | 12.39 |
FAIR_VALUE_LEVEL_3_RECONCILIAT
FAIR VALUE - LEVEL 3 RECONCILIATION (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Changes in the fair value of items measured on a recurring basis and categorized as Level 3 measurements | ||
Balance at the beginning of period | ($0.30) | ($1.30) |
Net realized gains (losses) included in earnings | -1.2 | 0.7 |
Net unrealized gains (losses) recorded as regulatory assets or liabilities | -4.5 | 2.2 |
Purchases | -0.1 | |
Settlements | 0.4 | -0.7 |
Balance at the end of the period | -5.6 | 0.8 |
Impact on earnings of unrealized gains (losses) on level 3 instruments | 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 | 1.9 | 1.2 |
Net realized gains (losses) included in earnings | -1.2 | 0.7 |
Net unrealized gains (losses) recorded as regulatory assets or liabilities | -0.2 | 0 |
Purchases | -0.1 | |
Settlements | 0.1 | -1.3 |
Balance at the end of the period | 0.6 | 0.5 |
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 | -2.2 | -2.5 |
Net realized gains (losses) included in earnings | 0 | 0 |
Net unrealized gains (losses) recorded as regulatory assets or liabilities | -4.3 | 2.2 |
Purchases | 0 | |
Settlements | 0.3 | 0.6 |
Balance at the end of the period | ($6.20) | $0.30 |
FAIR_VALUE_FINANCIAL_INSTRUMEN
FAIR VALUE - FINANCIAL INSTRUMENTS NOT RECORDED AT FAIR VALUE (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Carrying value and estimated fair value of financial instruments | ||
Long-term debt | $1,174.50 | $1,174.50 |
Long-term debt to parent | 3.3 | 5.4 |
Preferred stock – $100 par value; 1,000,000 shares authorized; 511,882 shares issued and outstanding | 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 | 3.3 | 5.4 |
Preferred stock – $100 par value; 1,000,000 shares authorized; 511,882 shares issued and outstanding | 51.2 | 51.2 |
Fair Value | ||
Carrying value and estimated fair value of financial instruments | ||
Long-term debt | 1,318.80 | 1,286.20 |
Long-term debt to parent | 3.5 | 5.7 |
Preferred stock – $100 par value; 1,000,000 shares authorized; 511,882 shares issued and outstanding | $52.50 | $52 |
MISCELLANEOUS_INCOME_Details
MISCELLANEOUS INCOME (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Other Income and Expenses [Abstract] | ||
Equity portion of AFUDC | $2.90 | $3.60 |
Earnings from equity method investments | 2.6 | 2.8 |
Key executive life insurance for retired employees | 0.9 | 0.7 |
Other | 0.2 | 0.2 |
Total miscellaneous income | $6.60 | $7.30 |
REGULATORY_ENVIRONMENT_Details
REGULATORY ENVIRONMENT (Details) (USD $) | 1 Months Ended | 3 Months Ended | 12 Months Ended | 1 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2015 | Dec. 31, 2014 | Apr. 30, 2015 |
Public Service Commission of Wisconsin (PSCW) | 2015 Rates | |||||
Regulatory Environment | |||||
Approved return on common equity percent reflected in rates of customers | 10.20% | ||||
Approved percent of capital structure composed of common equity | 50.28% | ||||
Percentage price variance from rate case-approved fuel and purchased power costs before deferral is requirec | 2.00% | 2.00% | |||
Public Service Commission of Wisconsin (PSCW) | 2014 Rates | |||||
Regulatory Environment | |||||
Approved return on common equity percent reflected in rates of customers | 10.20% | ||||
Approved percent of capital structure composed of common equity | 50.14% | ||||
Public Service Commission of Wisconsin (PSCW) | Retail electric rates | 2015 Rates | |||||
Regulatory Environment | |||||
Approved annual increase (decrease) in rates for customers | 24.6 | ||||
Costs of fuel for electric generation | 42 | ||||
Change in decoupling amounts to be collected from (refunded to) customers in rates | -9 | ||||
Customer recoveries (refunds) related to decoupling | -4 | ||||
Public Service Commission of Wisconsin (PSCW) | Retail electric rates | 2014 Rates | |||||
Regulatory Environment | |||||
Approved annual increase (decrease) in rates for customers | -12.8 | ||||
Customer recoveries (refunds) related to decoupling | -13 | ||||
Public Service Commission of Wisconsin (PSCW) | Retail natural gas rates | 2015 Rates | |||||
Regulatory Environment | |||||
Approved annual increase (decrease) in rates for customers | -15.4 | ||||
Change in decoupling amounts to be collected from (refunded to) customers in rates | -16 | ||||
Customer recoveries (refunds) related to decoupling | -8 | ||||
Public Service Commission of Wisconsin (PSCW) | Retail natural gas rates | 2014 Rates | |||||
Regulatory Environment | |||||
Approved annual increase (decrease) in rates for customers | 4 | ||||
Customer recoveries (refunds) related to decoupling | 8 | ||||
Subsequent event | Public Service Commission of Wisconsin (PSCW) | 2016 Rates | |||||
Regulatory Environment | |||||
Requested return on common equity percent reflected in rates of customers | 10.20% | ||||
Requested percent of capital structure composed of common equity | 50.52% | ||||
Subsequent event | Public Service Commission of Wisconsin (PSCW) | Retail electric rates | 2016 Rates | |||||
Regulatory Environment | |||||
Requested annual increase (decrease) in rates for customers | 94.1 | ||||
Subsequent event | Public Service Commission of Wisconsin (PSCW) | Retail natural gas rates | 2016 Rates | |||||
Regulatory Environment | |||||
Requested annual increase (decrease) in rates for customers | 9.4 | ||||
Subsequent event | Michigan Public Service Commission (MPSC) | Retail electric rates | 2015 Rates | |||||
Regulatory Environment | |||||
Approved annual increase (decrease) in rates for customers | 4 | ||||
Approved return on common equity percent reflected in rates of customers | 10.20% | ||||
Approved percent of capital structure composed of common equity | 50.48% | ||||
Period of rate recognition | 3 years |
SEGMENTS_OF_BUSINESS_Details
SEGMENTS OF BUSINESS (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
segment | ||
Segment Reporting [Abstract] | ||
Number of reportable segments | 3 | |
Segment reporting information | ||
Revenues | $424.70 | $555.70 |
Depreciation and amortization expense | 29.2 | 27.6 |
Miscellaneous income | 6.6 | 7.3 |
Interest expense | 13.9 | 14 |
Provision for income taxes | 23 | 29.8 |
Preferred stock dividend requirements | -0.8 | -0.8 |
Net income attributed to common shareholder | 39 | 50.3 |
Intersegment revenues | ||
Segment reporting information | ||
Revenues | 0 | 0 |
Reconciling Eliminations | ||
Segment reporting information | ||
Revenues | 0 | 0 |
Depreciation and amortization expense | -0.1 | -0.1 |
Miscellaneous income | 0 | 0 |
Interest expense | 0 | 0 |
Provision for income taxes | 0 | 0 |
Preferred stock dividend requirements | 0 | 0 |
Net income attributed to common shareholder | 0 | 0 |
Reconciling Eliminations | Intersegment revenues | ||
Segment reporting information | ||
Revenues | -2.8 | -4.7 |
Utility Segments | ||
Segment reporting information | ||
Revenues | 424.7 | 555.7 |
Depreciation and amortization expense | 29.2 | 27.5 |
Miscellaneous income | 2.9 | 3.5 |
Interest expense | 13.5 | 13.5 |
Provision for income taxes | 22 | 28.8 |
Preferred stock dividend requirements | -0.8 | -0.8 |
Net income attributed to common shareholder | 36.8 | 47.9 |
Utility Segments | Intersegment revenues | ||
Segment reporting information | ||
Revenues | 2.6 | 4.4 |
Utility Segments | Electric Utility | ||
Segment reporting information | ||
Revenues | 295.8 | 321.4 |
Depreciation and amortization expense | 25 | 23.5 |
Miscellaneous income | 2.8 | 3.5 |
Interest expense | 10.9 | 10.9 |
Provision for income taxes | 16.4 | 15.5 |
Preferred stock dividend requirements | -0.7 | -0.7 |
Net income attributed to common shareholder | 27.9 | 27.2 |
Utility Segments | Electric Utility | Intersegment revenues | ||
Segment reporting information | ||
Revenues | 0 | 0 |
Utility Segments | Natural Gas Utility | ||
Segment reporting information | ||
Revenues | 128.9 | 234.3 |
Depreciation and amortization expense | 4.2 | 4 |
Miscellaneous income | 0.1 | 0 |
Interest expense | 2.6 | 2.6 |
Provision for income taxes | 5.6 | 13.3 |
Preferred stock dividend requirements | -0.1 | -0.1 |
Net income attributed to common shareholder | 8.9 | 20.7 |
Utility Segments | Natural Gas Utility | Intersegment revenues | ||
Segment reporting information | ||
Revenues | 2.6 | 4.4 |
Nonutility Segments | Other | ||
Segment reporting information | ||
Revenues | 0 | 0 |
Depreciation and amortization expense | 0.1 | 0.2 |
Miscellaneous income | 3.7 | 3.8 |
Interest expense | 0.4 | 0.5 |
Provision for income taxes | 1 | 1 |
Preferred stock dividend requirements | 0 | 0 |
Net income attributed to common shareholder | 2.2 | 2.4 |
Nonutility Segments | Other | Intersegment revenues | ||
Segment reporting information | ||
Revenues | $0.20 | $0.30 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Related party transactions | |||
Notes payable to parent | $3.30 | $5.40 | |
Current portion of notes payable to parent | 0.5 | 2.5 | |
Equity earnings from WPS Investments, LLC | 2.6 | 2.8 | |
ATC | |||
Related party transactions | |||
Accounts payable to related party | 8.4 | 8.2 | |
Charges from equity method investee for network transmission services | 25.3 | 24.7 | |
Charges to equity method investee for services, construction, and operations | 2.4 | 2.4 | |
WRPC | |||
Related party transactions | |||
Purchases from related party | 1 | 1 | |
Charges to equity method investee for services, construction, and operations | 0.3 | 0.4 | |
WPS Investments, LLC | |||
Related party transactions | |||
Equity earnings from WPS Investments, LLC | 2.3 | 2.5 | |
Equity method investment, ownership interest (as a percent) | 10.94% | ||
Integrys Energy Group | |||
Related party transactions | |||
Liability related to income tax allocation | 5.9 | 6.1 | |
UPPCO | Electric transactions | |||
Related party transactions | |||
Sales to related party | 0 | 5.4 | |
IES | Natural gas transactions | |||
Related party transactions | |||
Sales to related party | 0 | 0.1 | |
Purchases from related party | 0 | 2.3 | |
WPS Leasing | Integrys Energy Group | |||
Related party transactions | |||
Notes payable to parent | 3.3 | 5.4 | |
Current portion of notes payable to parent | 0.5 | 2.5 | |
Interest expense | $0.10 | $0.10 |
NEW_ACCOUNTING_PRONOUNCEMENTS_
NEW ACCOUNTING PRONOUNCEMENTS (Details) | 3 Months Ended |
Mar. 31, 2015 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Potential effective date deferral | 1 year |