Document and Entity Information
Document and Entity Information Document - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-7978 | |
Entity Registrant Name | Black Hills Power, Inc. | |
Entity Incorporation, State or Country Code | SD | |
Entity Tax Identification Number | 46-0111677 | |
Entity Address, Address Line One | 7001 Mount Rushmore Road | |
Entity Address, City or Town | Rapid City | |
Entity Address, State or Province | SD | |
Entity Address, Postal Zip Code | 57702 | |
City Area Code | 605 | |
Local Phone Number | 721-1700 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 23,416,396 | |
Entity Central Index Key | 0000012400 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 |
Condensed Statements of Compreh
Condensed Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Revenues | $ 71,611 | $ 79,041 |
Operating expenses: | ||
Fuel and purchased power | 15,987 | 22,733 |
Operations and maintenance | 21,059 | 19,557 |
Depreciation and amortization | 11,141 | 10,077 |
Taxes - property | 2,231 | 2,032 |
Total operating expenses | 50,418 | 54,399 |
Operating income | 21,193 | 24,642 |
Other income (expense): | ||
Interest expense incurred net of amounts capitalized (including amortization of debt issuance costs, premiums and discounts) | (5,948) | (5,547) |
Interest income | 150 | 115 |
Other income (expense), net | 359 | (375) |
Total other income (expense), net | (5,439) | (5,807) |
Income before income taxes | 15,754 | 18,835 |
Income tax (expense) | (2,419) | (3,338) |
Net income | 13,335 | 15,497 |
Other comprehensive income (loss), net of tax: | ||
Reclassification of net realized (gains) losses on settled/amortized interest rate swaps (net of tax of $(3) and $0, respectively) | 12 | 0 |
Reclassification adjustment of benefit plan liability - net gain (loss) (net of tax of $(7) and $(4), respectively) | 25 | 12 |
Other comprehensive income (loss), net of tax | 37 | 12 |
Comprehensive income | $ 13,372 | $ 15,509 |
Condensed Statements of Compr_2
Condensed Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Reclassification adjustment of cash flow hedges settled, (tax) benefit | $ (3) | $ 0 |
Reclassification adjustment of benefit and other postretirement plans included in net income, (tax) benefit | $ (7) | $ (4) |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash | $ 6 | $ 6 |
Accounts receivable, net | 25,278 | 25,532 |
Accounts receivable from affiliates | 8,149 | 7,838 |
Materials, supplies and fuel | 29,776 | 27,950 |
Regulatory assets, current | 25,344 | 21,588 |
Other current assets | 7,299 | 4,949 |
Total current assets | 95,852 | 87,863 |
Investments | 5,104 | 5,079 |
Property, plant and equipment | 1,493,942 | 1,494,670 |
Less: accumulated depreciation and amortization | (385,153) | (400,054) |
Total property, plant and equipment, net | 1,108,789 | 1,094,616 |
Other assets: | ||
Regulatory assets, non-current | 50,362 | 54,109 |
Other assets, non-current | 18,585 | 18,690 |
Total other assets, non-current | 68,947 | 72,799 |
TOTAL ASSETS | 1,278,692 | 1,260,357 |
Current liabilities: | ||
Accounts payable | 17,801 | 20,654 |
Accounts payable to affiliates | 32,620 | 32,121 |
Accrued liabilities | 31,336 | 25,492 |
Money pool notes payable | 60,068 | 57,585 |
Notes payable to Parent | 45,000 | 25,000 |
Regulatory liabilities, current | 3,548 | 3,162 |
Total current liabilities | 190,373 | 164,014 |
Long-term debt | 337,356 | 340,176 |
Deferred credits and other liabilities: | ||
Deferred income tax liabilities, net | 112,904 | 112,202 |
Regulatory liabilities, non-current | 163,698 | 163,009 |
Benefit plan liabilities | 14,473 | 14,636 |
Other deferred credits and other liabilities | 15,612 | 15,397 |
Total deferred credits and other liabilities | 306,687 | 305,244 |
Commitments and contingencies (Notes 5, 6 and 9) | ||
Stockholder’s equity: | ||
Common stock $1 par value; 50,000,000 shares authorized; 23,416,396 shares issued | 23,416 | 23,416 |
Additional paid-in capital | 39,575 | 39,575 |
Retained earnings | 382,628 | 389,312 |
Accumulated other comprehensive loss | (1,343) | (1,380) |
Total stockholder’s equity | 444,276 | 450,923 |
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY | $ 1,278,692 | $ 1,260,357 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common Stock, Par Value (usd per share) | $ 1 | $ 1 |
Common Stock, Shares authorized | 50,000,000 | 50,000,000 |
Common Stock, Shares Issued | 23,416,396 | 23,416,396 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating activities: | ||
Net income | $ 13,335 | $ 15,497 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 11,141 | 10,077 |
Deferred income tax | (276) | 1,718 |
Employee benefits | 324 | 195 |
Other adjustments, net | (137) | 1,044 |
Change in operating assets and liabilities: | ||
Accounts receivable and other current assets | (3,189) | (2,437) |
Accounts payable and other current liabilities | 2,113 | 6,210 |
Regulatory assets - current | (546) | (1,413) |
Regulatory liabilities - current | 385 | (444) |
Other operating activities, net | (206) | (594) |
Net cash provided by operating activities | 22,944 | 29,853 |
Investing activities: | ||
Property, plant and equipment additions | (21,747) | (24,386) |
Other investing activities | (825) | (169) |
Net cash (used in) investing activities | (22,572) | (24,555) |
Financing activities: | ||
Change in money pool notes payable, net | 2,483 | (5,390) |
Net borrowings (payments) of Notes payable to Parent | 20,000 | 0 |
Long-term debt - repayments | (2,855) | 0 |
Dividend to Parent company | (20,000) | 0 |
Other financing activities | 0 | (15) |
Net cash (used in) financing activities | (372) | (5,405) |
Net Cash Provided by (Used in) Continuing Operations [Abstract] | ||
Net change in cash | 0 | (107) |
Cash, beginning of period | 6 | 112 |
Cash, end of period | 6 | 5 |
Supplemental cash flow information: | ||
Interest (net of amounts capitalized) | (3,501) | (3,345) |
Accrued property, plant and equipment purchases at March 31 | $ 8,433 | $ 8,633 |
Condensed Statements of Common
Condensed Statements of Common Stockholder's Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | AOCI Attributable to Parent |
Common Stock, Shares Issued - Beginning Balance at Dec. 31, 2018 | 23,416,396 | ||||
Stockholders' Equity - Beginning Balance at Dec. 31, 2018 | $ 404,245 | $ 23,416 | $ 39,575 | $ 342,145 | $ (891) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 15,497 | 15,497 | |||
Other comprehensive income (loss), net of tax | 12 | 12 | |||
Other adjustments | 1 | 1 | |||
Common Stock, Shares Issued - Ending Balance at Mar. 31, 2019 | 23,416,396 | ||||
Stockholders' Equity - Ending Balance at Mar. 31, 2019 | 419,748 | $ 23,416 | 39,575 | 357,636 | (879) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Implementation of New Accounting Principal | $ (7) | (7) | |||
Common Stock, Shares Issued - Beginning Balance at Dec. 31, 2019 | 23,416,396 | 23,416,396 | |||
Stockholders' Equity - Beginning Balance at Dec. 31, 2019 | $ 450,923 | $ 23,416 | 39,575 | 389,312 | (1,380) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 13,335 | 13,335 | |||
Other comprehensive income (loss), net of tax | 37 | 37 | |||
Dividend to Parent company | $ (20,000) | (20,000) | |||
Common Stock, Shares Issued - Ending Balance at Mar. 31, 2020 | 23,416,396 | 23,416,396 | |||
Stockholders' Equity - Ending Balance at Mar. 31, 2020 | $ 444,276 | $ 23,416 | $ 39,575 | 382,628 | $ (1,343) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Implementation of New Accounting Principal | $ (19) | $ (19) |
Management's Statement_
Management's Statement: | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Management's Statement | Management’s Statement The unaudited condensed financial statements included herein have been prepared by Black Hills Power, Inc. (“South Dakota Electric”, the “Company,” “we,” “us” or “our”), pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations; however, we believe that the footnotes adequately disclose the information presented. These condensed financial statements should be read in conjunction with the financial statements and the notes thereto, included in our 2019 Annual Report on Form 10-K filed with the SEC. The information furnished in the accompanying condensed financial statements reflects certain estimates required and all adjustments, including accruals, which are, in the opinion of management, necessary for a fair presentation of the March 31, 2020 , December 31, 2019 and March 31, 2019 financial information and are of a normal recurring nature. The results of operations for the three months ended March 31, 2020 and March 31, 2019 , and our financial condition as of March 31, 2020 and December 31, 2019 are not necessarily indicative of the results of operations and financial condition to be expected as of or for any other period. COVID-19 Pandemic In March 2020, the World Health Organization categorized COVID-19 as a pandemic and the President of the United States declared the outbreak a national emergency. The U.S. government has deemed electric utilities as “critical” in providing essential services during this emergency. As a provider of critical services, the Company has an obligation to provide services to our customers. The Company remains focused on protecting the health of its employees and the communities in which it operates while assuring the continuity of its business operations. The Company’s Condensed Financial Statements reflect estimates and assumptions made by management that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Financial Statements and reported amounts of revenue and expenses during the reporting periods presented. The Company considered the impacts of COVID-19 on the assumptions and estimates used and determined that for the three months ended March 31, 2020, there were no material adverse impacts on the Company’s results of operations. Change in Accounting Principle - Pension Accounting Asset Method Effective January 1, 2020, we changed our method of accounting for net periodic benefit cost. Prior to the change, the Company used a calculated value for determining market-related value of plan assets which amortized the effects of gains and losses over a five-year period. Effective with the accounting change, the Company will continue to use a calculated value for the return-seeking assets (equities) in the portfolio and change to fair value for the liability-hedging assets (fixed income). See Note 6 for additional information. Recently Issued Accounting Standards Simplifying the Accounting for Income Taxes, ASU 2019-12 In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes as part of its overall simplification initiative to reduce costs and complexity in applying accounting standards while maintaining or improving the usefulness of the information provided to users of the financial statements. Amendments include removal of certain exceptions to the general principles of ASC 740, Income Taxes, and simplification in several other areas such as accounting for a franchise tax (or similar tax) that is partially based on income. The new guidance is effective for interim and annual periods beginning after December 15, 2020 with early adoption permitted. We are currently reviewing this standard to assess the impact on our financial position, results of operations and cash flows. Recently Adopted Accounting Standards Financial Instruments -- Credit Losses: Measurement of Credit Losses on Financial Instruments, ASU 2018-19 In June 2016, the FASB issued ASU 2016-13, Financial Instruments -- Credit Losses: Measurement of Credit Losses on Financial Instruments, which was subsequently amended by ASU 2018-19, ASU 2019-04, 2019-05, 2019-10, and 2019-11. The standard introduces new accounting guidance for credit losses on financial instruments within its scope, including trade receivables. This new guidance adds an impairment model that is based on expected losses rather than incurred losses. We adopted this standard on January 1, 2020, with prior year comparative financial information remaining as previously reported when transitioning to the new standard. On January 1, 2020, we recorded an increase to our allowance for credit losses, primarily associated with the inclusion of expected losses on unbilled revenue. The cumulative effect of the adoption, net of tax impact, was recorded as an adjustment to retained earnings. Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, ASU 2018-15 In August 2018, the FASB issued ASU 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which aligns the requirements for recording implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. As a result, certain categories of implementation costs that previously would have been charged to expense as incurred are now capitalized as prepayments and amortized over the term of the arrangement. We adopted this standard prospectively on January 1, 2020. Adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. |
Revenue_
Revenue: | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Our revenue contracts generally provide for performance obligations that are: fulfilled and transfer control to customers over time; represent a series of distinct services that are substantially the same; involve the same pattern of transfer to the customer; and provide a right to consideration from our customers in an amount that corresponds directly with the value to the customer for the performance completed to date. Therefore, we recognize revenue in the amount to which we have a right to invoice. The following tables depict the disaggregation of revenue from contracts with customers by customer type and timing of revenue recognition for each of the reporting segments for the three months ended March 31, 2020 and 2019 . Sales tax and other similar taxes are excluded from revenues. Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 (in thousands) Customer types: Retail $ 51,427 $ 53,076 Wholesale 4,382 8,343 Market - off-system sales 2,377 4,670 Transmission/Other 13,300 12,831 Revenue from contracts with customers 71,486 78,920 Other revenues 125 121 Total revenues $ 71,611 $ 79,041 Timing of revenue recognition: Services transferred over time $ 71,486 $ 78,920 Revenue from contracts with customers $ 71,486 $ 78,920 Contract Balances The nature of our primary revenue contracts provides an unconditional right to consideration upon service delivery; therefore, no customer contract assets or liabilities exist. The unconditional right to consideration is represented by the balance in our Accounts Receivable and is further discussed in Note 3 . We do not typically incur costs that would be capitalized to obtain or fulfill a revenue contract. |
Accounts Receivable_
Accounts Receivable: | 3 Months Ended |
Mar. 31, 2020 | |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | |
Accounts Receivable | Accounts Receivable Following is a summary of Accounts receivable, net included in the accompanying Condensed Balance Sheets (in thousands) as of: March 31, 2020 December 31, 2019 Accounts receivable, trade $ 15,577 $ 14,778 Unbilled revenues 10,059 10,914 Less allowance for credit losses (358 ) (160 ) Accounts receivable, net $ 25,278 $ 25,532 The ongoing credit evaluation of our customers during the COVID-19 pandemic is further discussed in the Credit Risk section of Note 7 . The Company did not experience material credit losses or customer defaults during the three months ended March 31, 2020. |
Regulatory Accounting_
Regulatory Accounting: | 3 Months Ended |
Mar. 31, 2020 | |
Regulated Operations [Abstract] | |
Regulatory Accounting | Regulatory Matters We had the following regulatory assets and liabilities (in thousands) as of: March 31, 2020 December 31, 2019 Regulatory assets: Loss on reacquired debt (a) $ 921 $ 989 Deferred taxes on AFUDC (b) 4,882 4,927 Employee benefit plans and related deferred taxes (c) 20,866 20,661 Deferred energy and fuel cost adjustments (b) 23,854 23,203 Deferred taxes on flow through accounting (c) 10,297 9,801 Decommissioning costs (a) 5,767 6,211 Vegetation management (a) 7,486 8,062 Other regulatory assets (a) 1,633 1,843 Total regulatory assets $ 75,706 $ 75,697 Less current regulatory assets (25,344 ) (21,588 ) Regulatory assets, non-current $ 50,362 $ 54,109 Regulatory liabilities: Cost of removal for utility plant (a) $ 58,422 $ 57,318 Employee benefit plan costs and related deferred taxes (c) 6,986 7,023 Excess deferred income taxes (c) 97,741 98,228 TCJA revenue reserve 3,548 3,162 Other regulatory liabilities (c) 549 440 Total regulatory liabilities $ 167,246 $ 166,171 Less current regulatory liabilities (3,548 ) (3,162 ) Regulatory liabilities, non-current $ 163,698 $ 163,009 ____________________ (a) We are allowed a recovery of costs, but we are not allowed a rate of return. (b) In addition to recovery of costs, we are allowed a rate of return. (c) In addition to recovery or repayment of costs, we are allowed a return on a portion of this amount or a reduction in rate base. Regulatory Activity There have been no significant changes to our Regulatory Matters from those previously disclosed in Note 7 of the Notes to the Financial Statements in our 2019 Annual Report on Form 10-K. |
Related-Party Transactions_
Related-Party Transactions: | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party Transactions Dividend to Parent For the three months ended March 31, 2020 , we paid a $20 million dividend to BHC. We did not record any dividends for the three months ended March 31, 2019 . Receivables and Payables We have accounts receivable and accounts payable balances related to transactions with other BHC subsidiaries. The balances were as follows (in thousands) as of: March 31, 2020 December 31, 2019 Accounts receivable from affiliates $ 8,149 $ 7,838 Accounts payable to affiliates $ 32,620 $ 32,121 Money Pool Notes Payable We participate in the Utility Money Pool Agreement (the Agreement). Under the Agreement, we may borrow from the pool; however the Agreement restricts the pool from loaning funds to BHC or to any of BHC’s non-utility subsidiaries. The Agreement does not restrict us from paying dividends to BHC. Borrowings under the Agreement bear interest at the weighted average daily cost of our parent company’s external borrowings as defined under the Agreement or, if there are no external funds outstanding on that date, then the rate will be the daily one-month LIBOR plus 1.0% . At March 31, 2020 , the average cost of borrowing under the Utility Money Pool was 1.92% . We had the following balances with the Utility Money Pool (in thousands) as of: March 31, 2020 December 31, 2019 Money pool notes payable $ 60,068 $ 57,585 Our net interest income (expense) relating to balances with the Utility Money Pool was as follows (in thousands): Three Months Ended March 31, 2020 2019 Net interest income (expense) $ (287 ) $ (273 ) Notes payable to Parent On March 1, 2020, we entered into a $45 million , 4.11% short-term promissory note with BHC. This note is eligible for annual renewal at December 31, 2020. The current note replaces the prior $25 million short-term promissory note entered into on June 1, 2019 and renewed at December 31, 2019. We had the following balances for our Notes payable to Parent balance (in thousands) as of: March 31, 2020 December 31, 2019 Notes payable to Parent $ 45,000 $ 25,000 Our Net interest income (expense) relating to balances of the Notes Payable to Parent was as follows (in thousands): Three Months Ended March 31, 2020 2019 Net interest income (expense) $ (388 ) $ — Other related party activity was as follows (in thousands): Three Months Ended March 31, 2020 2019 Revenue: Energy sold to Wyoming Electric $ 294 $ 574 Rent from electric properties $ 989 $ 896 Horizon Point shared facility revenue $ 2,840 $ 3,007 Fuel and purchased power : Purchases from WRDC mine $ 4,317 $ 4,657 Purchase of excess energy from Wyoming Electric $ 161 $ 132 Purchase of renewable wind energy from Wyoming Electric - Happy Jack $ 792 $ 535 Purchase of renewable wind energy from Wyoming Electric - Silver Sage $ 1,392 $ 983 Gas transportation service agreement with Wyoming Electric for firm and interruptible gas transportation $ 82 $ 76 Operations and maintenance: Corporate support services and fees from BHSC $ 10,419 $ 10,191 Wygen III ground lease with WRDC $ 251 $ 246 |
Employee Benefit Plans_
Employee Benefit Plans: | 3 Months Ended |
Mar. 31, 2020 | |
Defined Benefit Plan [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Change in Accounting Principle - Pension Accounting Asset Method Effective January 1, 2020, the Company changed its method of accounting for net periodic benefit cost. Prior to the change, the Company used a calculated value for determining market-related value of plan assets which amortized the effects of gains and losses over a five-year period. Effective with the accounting change, the Company will continue to use a calculated value for the return-seeking assets (equities) in the portfolio and fair value for the liability-hedging assets (fixed income). The Company considers the fair value method for determining market-related value of liability-hedging assets to be a preferable method of accounting because asset-related gains and losses are subject to amortization into pension cost immediately. Additionally, the fair value for liability-hedging assets allows for the impact of gains and losses on this portion of the asset portfolio to be reflected in tandem with changes in the liability which is linked to changes in the discount rate assumption for remeasurement. We evaluated the effect of this change in accounting method and deemed it immaterial to the historical and current financial statements and therefore did not account for the change retrospectively. Accordingly, the Company calculated the cumulative difference using a calculated value versus fair value to determine market-related value for liability-hedging assets of the portfolio. The cumulative effect of this change, as of January 1, 2020, resulted in a $0.1 million decrease to prior service costs, as recorded in Other income (expense), net within the accompanying Condensed Statements of Comprehensive Income for the three months ended March 31, 2020. Defined Benefit Pension Plan The components of net periodic benefit cost for the Defined Benefit Pension Plan were as follows (in thousands): Three Months Ended March 31, 2020 2019 Service cost $ 92 $ 91 Interest cost 463 603 Expected return on plan assets (781 ) (851 ) Prior service cost — 2 Net loss (gain) 511 305 Net periodic benefit cost $ 285 $ 150 Defined Benefit Postretirement Healthcare Plan The components of net periodic benefit cost for the Defined Benefit Postretirement Healthcare Plan were as follows (in thousands): Three Months Ended March 31, 2020 2019 Service cost $ 39 $ 37 Interest cost 32 47 Prior service cost (benefit) (84 ) (84 ) Net periodic benefit cost $ (13 ) $ — Supplemental Non-qualified Defined Benefit Plans The components of net periodic benefit cost for the Supplemental Non-qualified Defined Benefit Plans were as follows (in thousands): Three Months Ended March 31, 2020 2019 Interest cost $ 21 $ 29 Net loss (gain) 31 16 Net periodic benefit cost $ 52 $ 45 Contributions Contributions to the Defined Benefit Pension Plan are cash contributions made directly to the Pension Plan Trust account. Contributions to the Postretirement Healthcare and Supplemental Plans are made in the form of benefit payments. Contributions made for 2020 and anticipated contributions for 2020 and 2021 are as follows (in thousands): Contributions Remaining Anticipated Contributions for Anticipated Contributions for Three Months Ended March 31, 2020 2020 2021 Defined Benefit Pension Plan $ — $ 1,739 $ 1,703 Defined Benefit Postretirement Healthcare Plan $ 147 $ 440 $ 597 Supplemental Non-qualified Defined Benefit Plans $ 80 $ 241 $ 304 |
Derivatives and Fair Values_
Derivatives and Fair Values: | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Fair Value | Derivatives and Fair Values Our activities in the regulated and non-regulated energy sectors expose us to a number of risks in the normal operations of our businesses. Depending on the activity, we are exposed to varying degrees of market risk and credit risk. Market Risk Market risk is the potential loss that may occur as a result of an adverse change in market price, rate or supply. We are exposed to commodity price risk associated with our purchased power costs which include market fluctuations due to unpredictable factors such as weather, market speculation, transmission constraints, and other factors that may impact electric power supply and demand. Credit Risk Credit risk is the risk of financial loss resulting from non-performance of contractual obligations by a counterparty. For production and generation activities, we attempt to mitigate our credit exposure by conducting business primarily with high credit quality entities, setting tenor and credit limits commensurate with counterparty financial strength, obtaining master netting agreements, and mitigating credit exposure with less creditworthy counterparties through parental guarantees, prepayments, letters of credit, and other security agreements. We perform ongoing credit evaluations of our customers and adjust credit limits based on payment history and the customers’ current creditworthiness, as determined by review of their current credit information. We maintain a provision for estimated credit losses based upon historical experience and any specific customer collection issue that is identified. Although we did not experience material credit losses or customer defaults for the three months ended March 31, 2020, we are monitoring COVID-19 impacts and changes to customer load, consistency in customer payments, requests for deferred or discounted payments, and requests for changes to credit limits to quantify future financial impacts to allowance for credit losses. Derivatives We have wholesale power purchase and sale contracts used to manage purchased power costs and customer load requirements associated with serving our electric customers that are considered derivative instruments. Changes in the fair value of these commodity derivatives are recorded in Fuel and purchased power, net of amounts credited to customers under margin-sharing mechanisms. The contract or notional amounts and terms of the derivative commodity instruments held at our utilities are composed of both long and short positions. We were in a net long position as of: March 31, 2020 December 31, 2019 MWh Maximum Term (months) MWh Maximum Term (months) Wholesale power contracts (a) 195,825 9 — 0 __________ (a) Volumes exclude contracts that qualify for the normal purchases and normal sales exception. From time to time we utilize risk management contracts including interest rate swaps to fix the interest on variable rate debt or to lock in the Treasury yield component associated with anticipated issuance of senior notes. For swaps that settled in connection with the issuance of senior debt, the effective portion is deferred as a component in AOCI and recognized as interest expense over the life of the senior note. As of March 31, 2020, we had no outstanding interest rate swap agreements. Derivatives by Balance Sheet Classification As required by accounting standards for derivatives and hedges, fair values within the following tables are presented on a gross basis aside from the netting of asset and liability positions. Netting of positions is permitted in accordance with accounting standards for offsetting and under terms of our master netting agreements that allow us to settle positive and negative positions. The following table presents the fair value and balance sheet classification of our derivative instruments (in thousands) as of: Balance Sheet Location March 31, 2020 December 31, 2019 Derivatives not designated as hedges: Asset derivative instruments: Current commodity derivatives Other current assets $ 1,362 $ — Total derivatives not designated as hedges $ 1,362 $ — Derivatives Designated as Hedges Derivatives designated as cash flow hedges relate to a treasury lock entered into in August 2002 to hedge $50 million of our First Mortgage Bonds due on August 15, 2032. The treasury lock cash settled on August 8, 2002, the bond pricing date, and resulted in a $1.8 million loss. The treasury lock is treated as a cash flow hedge and the resulting loss is carried in Accumulated other comprehensive loss and is being amortized over the life of the related bonds. Three Months Ended March 31, Three Months Ended March 31, 2020 2019 2020 2019 Derivatives in Cash Flow Hedging Relationships Gain/(Loss) Recognized in OCI Income Statement Location Amount of Gain/(Loss) Reclassified from AOCI into Income (in thousands) (in thousands) Interest rate swaps $ 16 $ — Interest expense $ (16 ) $ — Total $ 16 $ — $ (16 ) $ — Derivatives Not Designated as Hedges The following table summarizes the impacts of derivative instruments not designated as hedge instruments on our Condensed Statements of Comprehensive Income for the three months ended March 31, 2020 and 2019 . Note that this presentation does not reflect gains or losses arising from the underlying physical transactions; therefore, it is not indicative of the economic profit or loss we realized when the underlying physical and financial transactions were settled. Three Months Ended March 31, 2020 2019 Derivatives Not Designated as Hedging Instruments Income Statement Location Amount of Gain/(Loss) on Derivatives Recognized in Income (in thousands) Commodity derivatives Fuel and purchased power $ 1,362 $ — $ 1,362 $ — As discussed above, financial instruments used to manage lowest cost resources for our customers are not designated as cash flow hedges. The unrealized gains and losses arising from these derivatives are recognized in the Condensed Statements of Comprehensive Income. Fair Value We use the following fair value hierarchy for determining inputs for our financial instruments. Our assets and liabilities for financial instruments are classified and disclosed in one of the following fair value categories: Level 1 — Unadjusted quoted prices available in active markets that are accessible at the measurement date for identical unrestricted assets or liabilities. Level 1 instruments primarily consist of highly liquid and actively traded financial instruments with quoted pricing information on an ongoing basis. Level 2 — Pricing inputs include quoted prices for identical or similar assets and liabilities in active markets other than quoted prices in Level 1, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 — Pricing inputs are generally less observable from objective sources. These inputs reflect management’s best estimate of fair value using its own assumptions about the assumptions a market participant would use in pricing the asset or liability. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement within the fair value hierarchy levels. We record transfers, if necessary, between levels at the end of the reporting period for all of our financial instruments. Transfers into Level 3, if any, occur when significant inputs used to value the derivative instruments become less observable, such as a significant decrease in the frequency and volume in which the instrument is traded, negatively impacting the availability of observable pricing inputs. Transfers out of Level 3, if any, occur when the significant inputs become more observable, such as when the time between the valuation date and the delivery date of a transaction becomes shorter, positively impacting the availability of observable pricing inputs. We currently do not have any Level 3 investments. Recurring Fair Value Measurements Derivatives Our commodity contracts are valued using the market approach and include wholesale power contracts that do not meet the normal purchases and normal sales exception. For these derivative instruments, the fair value is obtained by utilizing a nationally recognized service that obtains observable inputs to compute the fair value. As of March 31, 2020 Level 1 Level 2 Level 3 Cash Collateral and Counterparty Netting Total (in thousands) Assets: Commodity derivatives $ — $ 1,362 $ — $ — 1,362 As of December 31, 2019 Level 1 Level 2 Level 3 Cash Collateral and Counterparty Netting Total (in thousands) Assets: Commodity derivatives $ — $ — $ — $ — $ — Pension and Postretirement Plan Assets Fair value measurements also apply to the valuation of our pension and postretirement plan assets. Current accounting guidance requires employers to annually disclose information about the fair value measurements of their assets of a defined benefit pension or other postretirement plan. The fair value of these assets was presented in Note 12 to the Financial Statements included in our 2019 Annual Report on Form 10-K. The Company has concluded that the market volatility associated with COVID-19 does not require interim re-measurement of our pension plan assets or defined benefit obligations. Other fair value measures Financial instruments for which the carrying amount did not equal the fair value were as follows (in thousands) as of: March 31, 2020 December 31, 2019 Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt, including current maturities (a) $ 337,356 $ 451,419 $ 340,176 $ 458,286 _________________ (a) Long-term debt is valued based on observable inputs available either directly or indirectly for similar liabilities in active markets and therefore is classified in Level 2 in the fair value hierarchy. Carrying amount of long-term debt is net of deferred financing costs. |
Commitment and Contingencies_
Commitment and Contingencies: | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies There have been no significant changes to commitments and contingencies from those previously disclosed in Note 11 of our Notes to the Financial Statements in our 2019 Annual Report on Form 10-K. |
Long-term Debt_
Long-term Debt: | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt Series 94A Debt On March 24, 2020, South Dakota Electric paid off its $2.9 million , Series 94A variable rate notes due June 1, 2024. These notes were tendered by the sole investor on March 17, 2020. |
Subsequent Events_
Subsequent Events: | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events We evaluated all subsequent event activity and concluded that no subsequent events have occurred that would require recognition in the condensed financial statements or disclosures. There are many uncertainties regarding the COVID-19 pandemic, and the Company is closely monitoring the impact of the pandemic on all aspects of its business, including how it will impact its customers, employees, suppliers, vendors, and business partners. We are unable to predict the impact that COVID-19 will have on our financial position and operating results due to numerous uncertainties. The Company expects to continue to assess the evolving impact of COVID-19 and intends to make adjustments to its responses accordingly. |
Management's Statement (Policie
Management's Statement (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Change in Accounting Principle - Pension Accounting Asset Method | Change in Accounting Principle - Pension Accounting Asset Method Effective January 1, 2020, we changed our method of accounting for net periodic benefit cost. Prior to the change, the Company used a calculated value for determining market-related value of plan assets which amortized the effects of gains and losses over a five-year period. Effective with the accounting change, the Company will continue to use a calculated value for the return-seeking assets (equities) in the portfolio and change to fair value for the liability-hedging assets (fixed income). See Note 6 for additional information. |
Recently Issued and Adopted Accounting Standards | Recently Issued Accounting Standards Simplifying the Accounting for Income Taxes, ASU 2019-12 In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes as part of its overall simplification initiative to reduce costs and complexity in applying accounting standards while maintaining or improving the usefulness of the information provided to users of the financial statements. Amendments include removal of certain exceptions to the general principles of ASC 740, Income Taxes, and simplification in several other areas such as accounting for a franchise tax (or similar tax) that is partially based on income. The new guidance is effective for interim and annual periods beginning after December 15, 2020 with early adoption permitted. We are currently reviewing this standard to assess the impact on our financial position, results of operations and cash flows. Recently Adopted Accounting Standards Financial Instruments -- Credit Losses: Measurement of Credit Losses on Financial Instruments, ASU 2018-19 In June 2016, the FASB issued ASU 2016-13, Financial Instruments -- Credit Losses: Measurement of Credit Losses on Financial Instruments, which was subsequently amended by ASU 2018-19, ASU 2019-04, 2019-05, 2019-10, and 2019-11. The standard introduces new accounting guidance for credit losses on financial instruments within its scope, including trade receivables. This new guidance adds an impairment model that is based on expected losses rather than incurred losses. We adopted this standard on January 1, 2020, with prior year comparative financial information remaining as previously reported when transitioning to the new standard. On January 1, 2020, we recorded an increase to our allowance for credit losses, primarily associated with the inclusion of expected losses on unbilled revenue. The cumulative effect of the adoption, net of tax impact, was recorded as an adjustment to retained earnings. Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, ASU 2018-15 In August 2018, the FASB issued ASU 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which aligns the requirements for recording implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. As a result, certain categories of implementation costs that previously would have been charged to expense as incurred are now capitalized as prepayments and amortized over the term of the arrangement. We adopted this standard prospectively on January 1, 2020. Adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. |
Revenue Recognition | Our revenue contracts generally provide for performance obligations that are: fulfilled and transfer control to customers over time; represent a series of distinct services that are substantially the same; involve the same pattern of transfer to the customer; and provide a right to consideration from our customers in an amount that corresponds directly with the value to the customer for the performance completed to date. Therefore, we recognize revenue in the amount to which we have a right to invoice. The following tables depict the disaggregation of revenue from contracts with customers by customer type and timing of revenue recognition for each of the reporting segments for the three months ended March 31, 2020 and 2019 . Sales tax and other similar taxes are excluded from revenues. Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 (in thousands) Customer types: Retail $ 51,427 $ 53,076 Wholesale 4,382 8,343 Market - off-system sales 2,377 4,670 Transmission/Other 13,300 12,831 Revenue from contracts with customers 71,486 78,920 Other revenues 125 121 Total revenues $ 71,611 $ 79,041 Timing of revenue recognition: Services transferred over time $ 71,486 $ 78,920 Revenue from contracts with customers $ 71,486 $ 78,920 Contract Balances The nature of our primary revenue contracts provides an unconditional right to consideration upon service delivery; therefore, no customer contract assets or liabilities exist. The unconditional right to consideration is represented by the balance in our Accounts Receivable and is further discussed in Note 3 . We do not typically incur costs that would be capitalized to obtain or fulfill a revenue contract. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 (in thousands) Customer types: Retail $ 51,427 $ 53,076 Wholesale 4,382 8,343 Market - off-system sales 2,377 4,670 Transmission/Other 13,300 12,831 Revenue from contracts with customers 71,486 78,920 Other revenues 125 121 Total revenues $ 71,611 $ 79,041 Timing of revenue recognition: Services transferred over time $ 71,486 $ 78,920 Revenue from contracts with customers $ 71,486 $ 78,920 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | |
Schedule of Accounts Receivable | Following is a summary of Accounts receivable, net included in the accompanying Condensed Balance Sheets (in thousands) as of: March 31, 2020 December 31, 2019 Accounts receivable, trade $ 15,577 $ 14,778 Unbilled revenues 10,059 10,914 Less allowance for credit losses (358 ) (160 ) Accounts receivable, net $ 25,278 $ 25,532 The ongoing credit evaluation of our customers during the COVID-19 pandemic is further discussed in the Credit Risk section of Note 7 . The Company did not experience material credit losses or customer defaults during the three months ended March 31, 2020. |
Regulatory Accounting (Tables)
Regulatory Accounting (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Regulated Operations [Abstract] | |
Schedule of Regulatory Assets | March 31, 2020 December 31, 2019 Regulatory assets: Loss on reacquired debt (a) $ 921 $ 989 Deferred taxes on AFUDC (b) 4,882 4,927 Employee benefit plans and related deferred taxes (c) 20,866 20,661 Deferred energy and fuel cost adjustments (b) 23,854 23,203 Deferred taxes on flow through accounting (c) 10,297 9,801 Decommissioning costs (a) 5,767 6,211 Vegetation management (a) 7,486 8,062 Other regulatory assets (a) 1,633 1,843 Total regulatory assets $ 75,706 $ 75,697 Less current regulatory assets (25,344 ) (21,588 ) Regulatory assets, non-current $ 50,362 $ 54,109 Regulatory liabilities: Cost of removal for utility plant (a) $ 58,422 $ 57,318 Employee benefit plan costs and related deferred taxes (c) 6,986 7,023 Excess deferred income taxes (c) 97,741 98,228 TCJA revenue reserve 3,548 3,162 Other regulatory liabilities (c) 549 440 Total regulatory liabilities $ 167,246 $ 166,171 Less current regulatory liabilities (3,548 ) (3,162 ) Regulatory liabilities, non-current $ 163,698 $ 163,009 ____________________ (a) We are allowed a recovery of costs, but we are not allowed a rate of return. (b) In addition to recovery of costs, we are allowed a rate of return. (c) In addition to recovery or repayment of costs, we are allowed a return on a portion of this amount or a reduction in rate base. |
Schedule of Regulatory Liabilities | Regulatory liabilities: Cost of removal for utility plant (a) $ 58,422 $ 57,318 Employee benefit plan costs and related deferred taxes (c) 6,986 7,023 Excess deferred income taxes (c) 97,741 98,228 TCJA revenue reserve 3,548 3,162 Other regulatory liabilities (c) 549 440 Total regulatory liabilities $ 167,246 $ 166,171 Less current regulatory liabilities (3,548 ) (3,162 ) Regulatory liabilities, non-current $ 163,698 $ 163,009 ____________________ (a) We are allowed a recovery of costs, but we are not allowed a rate of return. (b) In addition to recovery of costs, we are allowed a rate of return. (c) In addition to recovery or repayment of costs, we are allowed a return on a portion of this amount or a reduction in rate base. |
Related-Party Transactions (Tab
Related-Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transaction [Line Items] | |
Schedule of Related Party Accounts Receivable and Payable | The balances were as follows (in thousands) as of: March 31, 2020 December 31, 2019 Accounts receivable from affiliates $ 8,149 $ 7,838 Accounts payable to affiliates $ 32,620 $ 32,121 |
Schedule of Related Party Notes | We had the following balances with the Utility Money Pool (in thousands) as of: March 31, 2020 December 31, 2019 Money pool notes payable $ 60,068 $ 57,585 |
Schedule of Related Party Notes Payable to Parent | We had the following balances for our Notes payable to Parent balance (in thousands) as of: March 31, 2020 December 31, 2019 Notes payable to Parent $ 45,000 $ 25,000 |
Schedule of Revenues and Purchases from Related Parties | Other related party activity was as follows (in thousands): Three Months Ended March 31, 2020 2019 Revenue: Energy sold to Wyoming Electric $ 294 $ 574 Rent from electric properties $ 989 $ 896 Horizon Point shared facility revenue $ 2,840 $ 3,007 Fuel and purchased power : Purchases from WRDC mine $ 4,317 $ 4,657 Purchase of excess energy from Wyoming Electric $ 161 $ 132 Purchase of renewable wind energy from Wyoming Electric - Happy Jack $ 792 $ 535 Purchase of renewable wind energy from Wyoming Electric - Silver Sage $ 1,392 $ 983 Gas transportation service agreement with Wyoming Electric for firm and interruptible gas transportation $ 82 $ 76 Operations and maintenance: Corporate support services and fees from BHSC $ 10,419 $ 10,191 Wygen III ground lease with WRDC $ 251 $ 246 |
Subsidiary of Common Parent | |
Related Party Transaction [Line Items] | |
Schedule of Related Party Interest Income Expense | Our net interest income (expense) relating to balances with the Utility Money Pool was as follows (in thousands): Three Months Ended March 31, 2020 2019 Net interest income (expense) $ (287 ) $ (273 ) |
Parent | |
Related Party Transaction [Line Items] | |
Schedule of Related Party Interest Income Expense | Our Net interest income (expense) relating to balances of the Notes Payable to Parent was as follows (in thousands): Three Months Ended March 31, 2020 2019 Net interest income (expense) $ (388 ) $ — |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Defined Benefit Plan [Abstract] | |
Schedule of Net Benefit Costs | The components of net periodic benefit cost for the Defined Benefit Pension Plan were as follows (in thousands): Three Months Ended March 31, 2020 2019 Service cost $ 92 $ 91 Interest cost 463 603 Expected return on plan assets (781 ) (851 ) Prior service cost — 2 Net loss (gain) 511 305 Net periodic benefit cost $ 285 $ 150 Defined Benefit Postretirement Healthcare Plan The components of net periodic benefit cost for the Defined Benefit Postretirement Healthcare Plan were as follows (in thousands): Three Months Ended March 31, 2020 2019 Service cost $ 39 $ 37 Interest cost 32 47 Prior service cost (benefit) (84 ) (84 ) Net periodic benefit cost $ (13 ) $ — Supplemental Non-qualified Defined Benefit Plans The components of net periodic benefit cost for the Supplemental Non-qualified Defined Benefit Plans were as follows (in thousands): Three Months Ended March 31, 2020 2019 Interest cost $ 21 $ 29 Net loss (gain) 31 16 Net periodic benefit cost $ 52 $ 45 |
Schedule of Defined Benefit Plans Contributions | Contributions made for 2020 and anticipated contributions for 2020 and 2021 are as follows (in thousands): Contributions Remaining Anticipated Contributions for Anticipated Contributions for Three Months Ended March 31, 2020 2020 2021 Defined Benefit Pension Plan $ — $ 1,739 $ 1,703 Defined Benefit Postretirement Healthcare Plan $ 147 $ 440 $ 597 Supplemental Non-qualified Defined Benefit Plans $ 80 $ 241 $ 304 |
Derivatives and Fair Values (Ta
Derivatives and Fair Values (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Amounts of Outstanding Derivative Positions | The contract or notional amounts and terms of the derivative commodity instruments held at our utilities are composed of both long and short positions. We were in a net long position as of: March 31, 2020 December 31, 2019 MWh Maximum Term (months) MWh Maximum Term (months) Wholesale power contracts (a) 195,825 9 — 0 __________ (a) Volumes exclude contracts that qualify for the normal purchases and normal sales exception. |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table presents the fair value and balance sheet classification of our derivative instruments (in thousands) as of: Balance Sheet Location March 31, 2020 December 31, 2019 Derivatives not designated as hedges: Asset derivative instruments: Current commodity derivatives Other current assets $ 1,362 $ — Total derivatives not designated as hedges $ 1,362 $ — |
Derivative Instruments, Gain (Loss) | Derivatives Designated as Hedges Derivatives designated as cash flow hedges relate to a treasury lock entered into in August 2002 to hedge $50 million of our First Mortgage Bonds due on August 15, 2032. The treasury lock cash settled on August 8, 2002, the bond pricing date, and resulted in a $1.8 million loss. The treasury lock is treated as a cash flow hedge and the resulting loss is carried in Accumulated other comprehensive loss and is being amortized over the life of the related bonds. Three Months Ended March 31, Three Months Ended March 31, 2020 2019 2020 2019 Derivatives in Cash Flow Hedging Relationships Gain/(Loss) Recognized in OCI Income Statement Location Amount of Gain/(Loss) Reclassified from AOCI into Income (in thousands) (in thousands) Interest rate swaps $ 16 $ — Interest expense $ (16 ) $ — Total $ 16 $ — $ (16 ) $ — Derivatives Not Designated as Hedges The following table summarizes the impacts of derivative instruments not designated as hedge instruments on our Condensed Statements of Comprehensive Income for the three months ended March 31, 2020 and 2019 . Note that this presentation does not reflect gains or losses arising from the underlying physical transactions; therefore, it is not indicative of the economic profit or loss we realized when the underlying physical and financial transactions were settled. Three Months Ended March 31, 2020 2019 Derivatives Not Designated as Hedging Instruments Income Statement Location Amount of Gain/(Loss) on Derivatives Recognized in Income (in thousands) Commodity derivatives Fuel and purchased power $ 1,362 $ — $ 1,362 $ — |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | For these derivative instruments, the fair value is obtained by utilizing a nationally recognized service that obtains observable inputs to compute the fair value. As of March 31, 2020 Level 1 Level 2 Level 3 Cash Collateral and Counterparty Netting Total (in thousands) Assets: Commodity derivatives $ — $ 1,362 $ — $ — 1,362 As of December 31, 2019 Level 1 Level 2 Level 3 Cash Collateral and Counterparty Netting Total (in thousands) Assets: Commodity derivatives $ — $ — $ — $ — $ — |
Fair Value, by Balance Sheet Grouping | Financial instruments for which the carrying amount did not equal the fair value were as follows (in thousands) as of: March 31, 2020 December 31, 2019 Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt, including current maturities (a) $ 337,356 $ 451,419 $ 340,176 $ 458,286 _________________ (a) Long-term debt is valued based on observable inputs available either directly or indirectly for similar liabilities in active markets and therefore is classified in Level 2 in the fair value hierarchy. Carrying amount of long-term debt is net of deferred financing costs. |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | $ 71,486 | $ 78,920 |
Other revenues | 125 | 121 |
Revenues | 71,611 | 79,041 |
Services transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 71,486 | 78,920 |
Retail | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 51,427 | 53,076 |
Wholesale | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 4,382 | 8,343 |
Market - off-system sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 2,377 | 4,670 |
Transmission/Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | $ 13,300 | $ 12,831 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | ||
Accounts receivable, trade | $ 15,577 | $ 14,778 |
Unbilled revenues | 10,059 | 10,914 |
Less allowance for credit losses | (358) | (160) |
Accounts receivable, net | $ 25,278 | $ 25,532 |
Regulatory Accounting_ Regulato
Regulatory Accounting: Regulatory Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Regulatory Assets [Line Items] | ||
Total regulatory assets | $ 75,706 | $ 75,697 |
Less current regulatory assets | (25,344) | (21,588) |
Regulatory assets, non-current | 50,362 | 54,109 |
Loss on reacquired debt | ||
Regulatory Assets [Line Items] | ||
Total regulatory assets | 921 | 989 |
Deferred taxes on AFUDC | ||
Regulatory Assets [Line Items] | ||
Total regulatory assets | 4,882 | 4,927 |
Employee benefit plan costs and related deferred taxes | ||
Regulatory Assets [Line Items] | ||
Total regulatory assets | 20,866 | 20,661 |
Deferred energy and fuel cost adjustments | ||
Regulatory Assets [Line Items] | ||
Total regulatory assets | 23,854 | 23,203 |
Deferred taxes on flow through accounting | ||
Regulatory Assets [Line Items] | ||
Total regulatory assets | 10,297 | 9,801 |
Decommissioning costs | ||
Regulatory Assets [Line Items] | ||
Total regulatory assets | 5,767 | 6,211 |
Vegetation management | ||
Regulatory Assets [Line Items] | ||
Total regulatory assets | 7,486 | 8,062 |
Other regulatory assets | ||
Regulatory Assets [Line Items] | ||
Total regulatory assets | $ 1,633 | $ 1,843 |
Regulatory Accounting_ Regula_2
Regulatory Accounting: Regulatory Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Regulatory Liabilities [Line Items] | ||
Total regulatory liabilities | $ 167,246 | $ 166,171 |
Less current regulatory liabilities | (3,548) | (3,162) |
Regulatory liabilities, non-current | 163,698 | 163,009 |
Cost of removal for utility plant | ||
Regulatory Liabilities [Line Items] | ||
Total regulatory liabilities | 58,422 | 57,318 |
Employee benefit plan costs and related deferred taxes | ||
Regulatory Liabilities [Line Items] | ||
Total regulatory liabilities | 6,986 | 7,023 |
Excess deferred income taxes | ||
Regulatory Liabilities [Line Items] | ||
Total regulatory liabilities | 97,741 | 98,228 |
TCJA revenue reserve | ||
Regulatory Liabilities [Line Items] | ||
Total regulatory liabilities | 3,548 | 3,162 |
Other regulatory liabilities | ||
Regulatory Liabilities [Line Items] | ||
Total regulatory liabilities | $ 549 | $ 440 |
Related-Party Transactions (Det
Related-Party Transactions (Details) - USD ($) $ in Thousands | Mar. 01, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | ||||
Accounts receivable from affiliates | $ 8,149 | $ 7,838 | ||
Accounts payable to affiliates | 32,620 | 32,121 | ||
Money pool notes payable | 60,068 | 57,585 | ||
Notes payable to Parent | 45,000 | 25,000 | ||
Parent | ||||
Related Party Transaction [Line Items] | ||||
Dividend to Parent company | $ 20,000 | |||
Commitment fee percentage | 1.00% | |||
Related Party, Interest Rate | 4.11% | |||
Net interest income (expense) | $ (388) | $ 0 | ||
Extinguishment of Debt, Amount | $ 25,000 | |||
Notes payable to Parent | $ 45,000 | 45,000 | $ 25,000 | |
Subsidiary of Common Parent | Energy sold to Wyoming Electric | ||||
Related Party Transaction [Line Items] | ||||
Revenue | 294 | 574 | ||
Subsidiary of Common Parent | Rent from electric properties | ||||
Related Party Transaction [Line Items] | ||||
Revenue | 989 | 896 | ||
Subsidiary of Common Parent | Horizon Point shared facility revenue | ||||
Related Party Transaction [Line Items] | ||||
Revenue | 2,840 | 3,007 | ||
Subsidiary of Common Parent | Purchases from WRDC mine | ||||
Related Party Transaction [Line Items] | ||||
Fuel, purchased power, and operations & maintenance | 4,317 | 4,657 | ||
Subsidiary of Common Parent | Purchase of excess energy from Wyoming Electric | ||||
Related Party Transaction [Line Items] | ||||
Fuel, purchased power, and operations & maintenance | 161 | 132 | ||
Subsidiary of Common Parent | Purchase of renewable wind energy from Wyoming Electric - Happy Jack | ||||
Related Party Transaction [Line Items] | ||||
Fuel, purchased power, and operations & maintenance | 792 | 535 | ||
Subsidiary of Common Parent | Purchase of renewable wind energy from Wyoming Electric - Silver Sage | ||||
Related Party Transaction [Line Items] | ||||
Fuel, purchased power, and operations & maintenance | 1,392 | 983 | ||
Subsidiary of Common Parent | Gas transportation service agreement with Wyoming Electric for firm and interruptible gas transportation | ||||
Related Party Transaction [Line Items] | ||||
Fuel, purchased power, and operations & maintenance | 82 | 76 | ||
Subsidiary of Common Parent | Corporate support services and fees from BHSC | ||||
Related Party Transaction [Line Items] | ||||
Fuel, purchased power, and operations & maintenance | 10,419 | 10,191 | ||
Subsidiary of Common Parent | Wygen III ground lease with WRDC | ||||
Related Party Transaction [Line Items] | ||||
Fuel, purchased power, and operations & maintenance | $ 251 | 246 | ||
Utility Money Pool | ||||
Related Party Transaction [Line Items] | ||||
Related Party, Interest Rate | 1.92% | |||
Net interest income (expense) | $ (287) | $ (273) |
Employee Benefit Plans_ Change
Employee Benefit Plans: Change in Accounting Principle - Pension Accounting Asset Method (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Other Nonoperating Income (Expense) | |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 0.1 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Defined Benefit Pension Plan | ||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||
Service cost | $ 92 | $ 91 |
Interest cost | 463 | 603 |
Expected return on plan assets | (781) | (851) |
Prior service cost (benefit) | 0 | 2 |
Net loss (gain) | 511 | 305 |
Net periodic benefit cost | 285 | 150 |
Payment for Pension and Other Postretirement Benefits [Abstract] | ||
Contributions | 0 | |
Remaining Anticipated Contributions for | 1,739 | |
Anticipated Contributions for | 1,703 | |
Defined Benefit Postretirement Healthcare Plan | ||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||
Service cost | 39 | 37 |
Interest cost | 32 | 47 |
Prior service cost (benefit) | (84) | (84) |
Net periodic benefit cost | (13) | 0 |
Payment for Pension and Other Postretirement Benefits [Abstract] | ||
Contributions | 147 | |
Remaining Anticipated Contributions for | 440 | |
Anticipated Contributions for | 597 | |
Supplemental Non-qualified Defined Benefit Plans | ||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||
Interest cost | 21 | 29 |
Net loss (gain) | 31 | 16 |
Net periodic benefit cost | 52 | $ 45 |
Payment for Pension and Other Postretirement Benefits [Abstract] | ||
Contributions | 80 | |
Remaining Anticipated Contributions for | 241 | |
Anticipated Contributions for | $ 304 |
Derivatives and Fair Values_ De
Derivatives and Fair Values: Derivatives (Details) - Electricity - Wholesale power contracts - mW | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount | 195,825 | 0 |
Derivative, Remaining Maturity | 9 months | 0 months |
Derivatives and Fair Values_ _2
Derivatives and Fair Values: Derivatives by Balance Sheet Classification (Details) - Commodity Contract - Designated as Hedging Instrument - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Derivatives, Fair Value [Line Items] | ||
Fair Value Hedges, Net | $ 1,362 | $ 0 |
Derivative Assets, Current | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value Hedge Assets | $ 1,362 | $ 0 |
Derivatives and Fair Values_ _3
Derivatives and Fair Values: Derivatives Designated as Hedges (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Aug. 01, 2002 | |
Cash Flow Hedging | |||
Derivative [Line Items] | |||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | $ (16) | $ 0 | |
Cash Flow Hedging | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | 16 | 0 | |
Cash Flow Hedging | Designated as Hedging Instrument | Interest Rate Swap | |||
Derivative [Line Items] | |||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | 16 | 0 | |
Cash Flow Hedging | Interest Expense | Interest Rate Swap | |||
Derivative [Line Items] | |||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | (16) | $ 0 | |
First Mortgage Bonds Due 2032 | |||
Derivative [Line Items] | |||
Derivative, Notional Amount | $ 50,000 | ||
Realized Loss Included Accumulated Other Comprehensive Income (Loss) | $ (1,800) |
Derivatives and Fair Values_ _4
Derivatives and Fair Values: Derivatives Not Designated as Hedge Instruments (Details) - Not Designated as Hedging Instrument - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative [Line Items] | ||
Derivative, Gain (Loss) on Derivative, Net | $ 1,362 | $ 0 |
Cost of Sales | Electricity | ||
Derivative [Line Items] | ||
Derivative, Gain (Loss) on Derivative, Net | $ 1,362 | $ 0 |
Derivatives and Fair Values_ Re
Derivatives and Fair Values: Recurring Fair Value Measurements (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset, Fair Value, Gross Liability and Obligation to Return Cash, Offset | $ 0 | $ 0 |
Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset | 0 | 0 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset | 1,362 | 0 |
Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset | 0 | 0 |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset | $ 1,362 | $ 0 |
Derivatives and Fair Values_ Ot
Derivatives and Fair Values: Other Fair Value Measures (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term Debt | $ 337,356 | $ 340,176 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term Debt, Fair Value | $ 451,419 | $ 458,286 |
Long-term Debt_ Long-term Debt
Long-term Debt: Long-term Debt (Details) $ in Millions | Mar. 24, 2020USD ($) |
Bonds Due 2024 | |
Extinguishment of Debt, Amount | $ 2.9 |