Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 25, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 0-53713 | |
Entity Registrant Name | OTTER TAIL CORPORATION | |
Entity Incorporation, State or Country Code | MN | |
Entity Tax Identification Number | 27-0383995 | |
Entity Address, Address Line One | 215 South Cascade Street | |
Entity Address, Address Line Two | Box 496 | |
Entity Address, City or Town | Fergus Falls | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 56538-0496 | |
City Area Code | 866 | |
Local Phone Number | 410-8780 | |
Title of 12(b) Security | Common Shares, par value $5.00 per share | |
Trading Symbol | OTTR | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 41,630,952 | |
Entity Central Index Key | 0001466593 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 |
CONSOLIDATED BALANCE SHEETS (un
CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and Cash Equivalents | $ 72,987 | $ 1,537 |
Receivables, net of allowance for credit losses | 193,797 | 174,953 |
Inventories | 146,376 | 148,490 |
Regulatory Assets | 29,921 | 27,342 |
Other Current Assets | 17,412 | 17,032 |
Total Current Assets | 460,493 | 369,354 |
Noncurrent Assets | ||
Investments | 52,966 | 56,690 |
Property, Plant and Equipment, net of accumulated depreciation | 2,186,643 | 2,124,605 |
Regulatory Assets | 116,593 | 125,508 |
Intangible Assets, net of accumulated amortization | 8,218 | 9,044 |
Goodwill | 37,572 | 37,572 |
Other Noncurrent Assets | 35,419 | 32,057 |
Total Noncurrent Assets | 2,437,411 | 2,385,476 |
Total Assets | 2,897,904 | 2,754,830 |
Current Liabilities | ||
Short-Term Debt | 0 | 91,163 |
Current Maturities of Long-Term Debt | 0 | 29,983 |
Accounts Payable | 121,995 | 135,089 |
Accrued Salaries and Wages | 27,454 | 31,704 |
Accrued Taxes | 25,635 | 19,245 |
Regulatory Liabilities | 21,114 | 24,844 |
Other Current Liabilities | 45,655 | 55,671 |
Total Current Liabilities | 241,853 | 387,699 |
Noncurrent Liabilities | ||
Pension Benefit Liability | 50,489 | 73,973 |
Other Postretirement Benefits Liability | 67,352 | 66,481 |
Regulatory Liabilities | 240,545 | 234,430 |
Deferred Income Taxes | 212,838 | 188,268 |
Deferred Tax Credits | 16,102 | 16,661 |
Other Noncurrent Liabilities | 60,942 | 62,527 |
Total Noncurrent Liabilities | 648,268 | 642,340 |
Commitments and Contingencies (Note 9) | ||
Capitalization | ||
Long-Term Debt, net of current maturities | 823,760 | 734,014 |
Shareholders' Equity | ||
Common Shares: 50,000,000 shares authorized, $5 par value; 41,630,952 and 41,551,524 outstanding at September 30, 2022 and December 31, 2021 | 208,155 | 207,758 |
Additional Paid-In Capital | 422,448 | 419,760 |
Retained Earnings | 560,398 | 369,783 |
Accumulated Other Comprehensive Loss | (6,978) | (6,524) |
Total Shareholders' Equity | 1,184,023 | 990,777 |
Total Capitalization | 2,007,783 | 1,724,791 |
Total Liabilities and Shareholders' Equity | $ 2,897,904 | $ 2,754,830 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (unaudited) (Parentheticals) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Shareholders' Equity | ||
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, par value (in dollars per share) | $ 5 | $ 5 |
Common stock, shares outstanding (in shares) | 41,630,952 | 41,551,524 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Operating Revenues | ||||
Total Operating Revenues | $ 383,856 | $ 316,294 | $ 1,158,800 | $ 863,612 |
Operating Expenses | ||||
Electric Production Fuel | 24,972 | 17,698 | 54,538 | 44,576 |
Electric Purchased Power | 19,913 | 9,878 | 64,604 | 40,273 |
Electric Operating and Maintenance Expenses | 39,799 | 36,465 | 126,460 | 114,615 |
Cost of Products Sold (excluding depreciation) | 139,361 | 134,212 | 443,586 | 358,767 |
Other Nonelectric Expenses | 16,524 | 16,224 | 50,981 | 45,587 |
Depreciation and Amortization | 22,716 | 22,815 | 69,829 | 68,109 |
Electric Property Taxes | 4,438 | 4,474 | 13,304 | 13,136 |
Total Operating Expenses | 267,723 | 241,766 | 823,302 | 685,063 |
Operating Income | 116,133 | 74,528 | 335,498 | 178,549 |
Other Income and Expense | ||||
Interest Charges | 9,259 | 9,648 | 27,198 | 28,601 |
Nonservice Cost Components of Postretirement Benefits | (52) | 505 | (824) | 1,511 |
Other Income (Expense), net | (174) | 203 | (802) | 2,095 |
Income Before Income Taxes | 106,752 | 64,578 | 308,322 | 150,532 |
Income Tax Expense | 22,513 | 11,824 | 66,143 | 25,380 |
Net Income | $ 84,239 | $ 52,754 | $ 242,179 | $ 125,152 |
Weighted-Average Common Shares Outstanding: | ||||
Basic (in shares) | 41,600 | 41,504 | 41,582 | 41,487 |
Diluted (in shares) | 41,974 | 41,869 | 41,930 | 41,795 |
Earnings Per Share: | ||||
Basic (in dollars per share) | $ 2.02 | $ 1.27 | $ 5.82 | $ 3.02 |
Diluted (in dollars per share) | $ 2.01 | $ 1.26 | $ 5.78 | $ 2.99 |
Electric | ||||
Operating Revenues | ||||
Total Operating Revenues | $ 142,747 | $ 118,775 | $ 404,112 | $ 348,629 |
Product Sales | ||||
Operating Revenues | ||||
Total Operating Revenues | $ 241,109 | $ 197,519 | $ 754,688 | $ 514,983 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 84,239 | $ 52,754 | $ 242,179 | $ 125,152 |
Other Comprehensive Income (Loss): | ||||
Unrealized Loss on Available-for-Sale Securities, net of tax benefit of $46, $7, $127, and $27 | (171) | (26) | (476) | (101) |
Pension and Other Postretirement Benefits, net of tax expense of $(37), $(51), $(8), and $(154) | 106 | 146 | 22 | 437 |
Total Other Comprehensive Income (Loss) | (65) | 120 | (454) | 336 |
Total Comprehensive Income | $ 84,174 | $ 52,874 | $ 241,725 | $ 125,488 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Unrealized Gain (Loss) on Available-for-Sale Securities, tax benefit | $ 46 | $ 7 | $ 127 | $ 27 |
Pension and Other Postretirement Benefit Plan, tax benefit (expense) | $ (37) | $ (51) | $ (8) | $ (154) |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (unaudited) - USD ($) $ in Thousands | Total | Common Shares | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Beginning balance, shares (in shares) at Dec. 31, 2020 | 41,469,879 | ||||
Beginning balance at Dec. 31, 2020 | $ 870,966 | $ 207,349 | $ 414,246 | $ 257,878 | $ (8,507) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock Issued Under Share-Based Compensation Plans, net of shares withheld for employee taxes (in shares) | 70,105 | ||||
Stock Issued Under Share-Based Compensation Plans, net of shares withheld for employee taxes | (1,614) | $ 351 | (1,965) | ||
Stock Issued Under Dividend Reinvestment and Stock Purchase Plans, net of expenses and repurchased shares | (67) | (67) | |||
Net Income | 125,152 | 125,152 | |||
Other Comprehensive Income (Loss) | 336 | 336 | |||
Stock Compensation Expense | 6,354 | 6,354 | |||
Common Dividends | (48,645) | (48,645) | |||
Ending balance, shares (in shares) at Sep. 30, 2021 | 41,539,984 | ||||
Ending balance at Sep. 30, 2021 | 952,482 | $ 207,700 | 418,568 | 334,385 | (8,171) |
Beginning balance, shares (in shares) at Jun. 30, 2021 | 41,538,709 | ||||
Beginning balance at Jun. 30, 2021 | 915,123 | $ 207,694 | 417,870 | 297,850 | (8,291) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock Issued Under Share-Based Compensation Plans, net of shares withheld for employee taxes (in shares) | 1,275 | ||||
Stock Issued Under Share-Based Compensation Plans, net of shares withheld for employee taxes | (126) | $ 6 | (132) | ||
Net Income | 52,754 | 52,754 | |||
Other Comprehensive Income (Loss) | 120 | 120 | |||
Stock Compensation Expense | 830 | 830 | |||
Common Dividends | (16,219) | (16,219) | |||
Ending balance, shares (in shares) at Sep. 30, 2021 | 41,539,984 | ||||
Ending balance at Sep. 30, 2021 | $ 952,482 | $ 207,700 | 418,568 | 334,385 | (8,171) |
Beginning balance, shares (in shares) at Dec. 31, 2021 | 41,551,524 | 41,551,524 | |||
Beginning balance at Dec. 31, 2021 | $ 990,777 | $ 207,758 | 419,760 | 369,783 | (6,524) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock Issued Under Share-Based Compensation Plans, net of shares withheld for employee taxes (in shares) | 79,428 | ||||
Stock Issued Under Share-Based Compensation Plans, net of shares withheld for employee taxes | (2,924) | $ 397 | (3,321) | ||
Stock Issued Under Dividend Reinvestment and Stock Purchase Plans, net of expenses and repurchased shares | (132) | (132) | |||
Net Income | 242,179 | 242,179 | |||
Other Comprehensive Income (Loss) | (454) | (454) | |||
Stock Compensation Expense | 6,141 | 6,141 | |||
Common Dividends | $ (51,564) | (51,564) | |||
Ending balance, shares (in shares) at Sep. 30, 2022 | 41,630,952 | 41,630,952 | |||
Ending balance at Sep. 30, 2022 | $ 1,184,023 | $ 208,155 | 422,448 | 560,398 | (6,978) |
Beginning balance, shares (in shares) at Jun. 30, 2022 | 41,630,799 | ||||
Beginning balance at Jun. 30, 2022 | 1,116,543 | $ 208,154 | 421,951 | 493,351 | (6,913) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock Issued Under Share-Based Compensation Plans, net of shares withheld for employee taxes (in shares) | 153 | ||||
Stock Issued Under Share-Based Compensation Plans, net of shares withheld for employee taxes | 0 | $ 1 | (1) | ||
Stock Issued Under Dividend Reinvestment and Stock Purchase Plans, net of expenses and repurchased shares | (132) | (132) | |||
Net Income | 84,239 | 84,239 | |||
Other Comprehensive Income (Loss) | (65) | (65) | |||
Stock Compensation Expense | 630 | 630 | |||
Common Dividends | $ (17,192) | (17,192) | |||
Ending balance, shares (in shares) at Sep. 30, 2022 | 41,630,952 | 41,630,952 | |||
Ending balance at Sep. 30, 2022 | $ 1,184,023 | $ 208,155 | $ 422,448 | $ 560,398 | $ (6,978) |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (unaudited) (Parentheticals) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||||
Common Dividends (in dollars per share) | $ 0.4125 | $ 0.39 | $ 1.2375 | $ 1.17 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Operating Activities | ||
Net Income | $ 242,179 | $ 125,152 |
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | ||
Depreciation and Amortization | 69,829 | 68,109 |
Deferred Tax Credits | (558) | (558) |
Deferred Income Taxes | 23,648 | 18,835 |
Discretionary Contribution to Pension Plan | (20,000) | (10,000) |
Allowance for Equity Funds Used During Construction | (938) | (427) |
Stock Compensation Expense | 6,141 | 6,354 |
Other, Net | 5,477 | (2,747) |
Changes in Operating Assets and Liabilities: | ||
Receivables | (18,845) | (64,800) |
Inventories | 3,632 | (22,450) |
Regulatory Assets | 170 | 5,301 |
Other Assets | 1,789 | (18,708) |
Accounts Payable | (10,681) | 30,921 |
Accrued and Other Liabilities | (13,970) | 12,027 |
Regulatory Liabilities | (1,208) | 2,350 |
Pension and Other Postretirement Benefits | 1,308 | 5,393 |
Net Cash Provided by Operating Activities | 287,973 | 154,752 |
Investing Activities | ||
Capital Expenditures | (123,227) | (117,312) |
Proceeds from Disposal of Noncurrent Assets | 3,803 | 5,819 |
Cash Used for Investments and Other Assets | (8,132) | (5,591) |
Net Cash Used in Investing Activities | (127,556) | (117,084) |
Financing Activities | ||
Net Borrowings (Repayments) on Short-Term Debt | (91,163) | 16,860 |
Proceeds from Issuance of Long-Term Debt | 90,000 | 0 |
Payments for Retirement of Long-Term Debt | (30,000) | (169) |
Dividends Paid | (51,564) | (48,645) |
Payments for Shares Withheld for Employee Tax Obligations | (2,942) | (1,633) |
Other, net | (3,298) | (3,972) |
Net Cash Used in Financing Activities | (88,967) | (37,559) |
Net Change in Cash and Cash Equivalents | 71,450 | 109 |
Cash and Cash Equivalents at Beginning of Period | 1,537 | 1,163 |
Cash and Cash Equivalents at End of Period | $ 72,987 | $ 1,272 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Overview Otter Tail Corporation (OTC) and its subsidiaries (collectively, the "Company", "us", "our" or "we") form a diverse, multi-platform business consisting of a vertically integrated, regulated utility with generation, transmission and distribution facilities complemented by manufacturing businesses providing metal fabrication for custom machine parts and metal components, manufacturing of extruded and thermoformed plastic products, and manufacturing of polyvinyl chloride (PVC) pipe products. We classify our business into three segments: Electric, Manufacturing and Plastics. Basis of Presentation The unaudited consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the SEC for interim reporting. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles. In the opinion of management, we have included all adjustments, including normal recurring accruals, necessary for a fair presentation of the consolidated financial statements for the periods presented. The consolidated financial statements and condensed notes thereto should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Because of the seasonality of our businesses and other factors, the earnings for the three and nine months ended September 30, 2022 should not be taken as an indication of earnings for all or any part of the balance of the current year or as an indication of earnings for future years. Use of Estimates We use estimates based on the best information available in recording transactions and balances resulting from business operations. As better information becomes available or actual amounts are known, the recorded estimates are revised. Consequently, operating results can be affected by revisions to prior accounting estimates. Reclassifications Certain reclassifications of amounts previously reported have been made to the accompanying consolidated statements of shareholders' equity and consolidated statements of cash flows to maintain consistency and comparability between periods presented. The reclassifications had no impact on previously reported shareholders' equity, net cash provided by operating activities, net cash used in investing activities, net cash used in financing activities, or cash and cash equivalents. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We classify our business into three segments, Electric, Manufacturing and Plastics, consistent with our business strategy, organizational structure and our internal reporting and review processes used by our chief operating decision maker to make decisions regarding allocation of resources, to assess operating performance and to make strategic decisions. Certain assets and costs are not allocated to our operating segments. Corporate operating costs include items such as corporate staff and overhead costs, the results of our captive insurance company and other items excluded from the measurement of operating segment performance. Corporate assets consist primarily of cash and cash equivalents, prepaid expenses, investments and fixed assets. Corporate is not an operating segment, rather it is added to operating segment totals to reconcile to consolidated amounts. Information for each segment and our unallocated corporate costs for the three and nine months ended September 30, 2022 and 2021 are as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Operating Revenue Electric $ 142,747 $ 118,775 $ 404,112 $ 348,629 Manufacturing 98,767 89,977 306,921 250,085 Plastics 142,342 107,542 447,767 264,898 Total $ 383,856 $ 316,294 $ 1,158,800 $ 863,612 Net Income (Loss) Electric $ 24,847 $ 22,528 $ 62,938 $ 55,547 Manufacturing 6,219 4,200 17,858 15,290 Plastics 55,982 28,410 170,788 60,102 Corporate (2,809) (2,384) (9,405) (5,787) Total $ 84,239 $ 52,754 $ 242,179 $ 125,152 The following provides the identifiable assets by segment and corporate assets as of September 30, 2022 and December 31, 2021: (in thousands) September 30, December 31, Identifiable Assets Electric $ 2,347,461 $ 2,283,776 Manufacturing 253,819 251,044 Plastics 179,925 162,565 Corporate 116,699 57,445 Total $ 2,897,904 $ 2,754,830 |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Presented below are our operating revenues to external customers, in total and by amounts arising from contracts with customers and alternative revenue program (ARP) arrangements, disaggregated by revenue source and segment for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Operating Revenues Electric Segment Retail: Residential $ 35,122 $ 33,902 $ 108,883 $ 100,067 Retail: Commercial and Industrial 83,022 60,557 232,532 185,376 Retail: Other 2,033 1,979 6,004 5,687 Total Retail 120,177 96,438 347,419 291,130 Transmission 13,156 13,300 37,409 37,085 Wholesale 7,196 6,944 13,196 14,711 Other 2,218 2,093 6,088 5,703 Total Electric Segment 142,747 118,775 404,112 348,629 Manufacturing Segment Metal Parts and Tooling 84,054 76,455 261,923 210,141 Plastic Products and Tooling 12,723 10,198 36,584 30,624 Scrap Metal Sales 1,990 3,324 8,414 9,320 Total Manufacturing Segment 98,767 89,977 306,921 250,085 Plastics Segment PVC Pipe 142,342 107,542 447,767 264,898 Total Operating Revenue 383,856 316,294 1,158,800 863,612 Less: Non-contract Revenues Included Above Electric Segment - ARP Revenues (548) (33) (7,937) (2,790) Total Operating Revenues from Contracts with Customers $ 384,404 $ 316,327 $ 1,166,737 $ 866,402 |
Select Balance Sheet Informatio
Select Balance Sheet Information | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Select Balance Sheet Information | Select Balance Sheet Information Receivables and Allowance for Credit Losses Receivables as of September 30, 2022 and December 31, 2021 are as follows: (in thousands) September 30, December 31, Receivables Trade $ 167,480 $ 142,297 Other 9,052 10,591 Unbilled Receivables 18,813 23,901 Total Receivables 195,345 176,789 Less: Allowance for Credit Losses (1,548) (1,836) Receivables, net of allowance for credit losses $ 193,797 $ 174,953 The following is a summary of activity in the allowance for credit losses for the nine months ended September 30, 2022 and 2021: (in thousands) 2022 2021 Beginning Balance, January 1 $ 1,836 $ 3,215 Additions Charged to Expense 518 177 Reductions for Amounts Written Off, Net of Recoveries (806) (1,060) Ending Balance, September 30 $ 1,548 $ 2,332 Inventories Inventories consist of the following as of September 30, 2022 and December 31, 2021: (in thousands) September 30, December 31, Raw Material, Fuel and Supplies $ 74,249 $ 72,882 Work in Process 33,765 35,705 Finished Goods 38,362 39,903 Total Inventories $ 146,376 $ 148,490 Investments The following is a summary of our investments as of September 30, 2022 and December 31, 2021: (in thousands) September 30, December 31, Corporate-Owned Life Insurance Policies $ 37,288 $ 41,078 Debt Securities 8,710 9,202 Money Market Funds 1,854 949 Mutual Funds 5,084 5,432 Other Investments 30 29 Total Investments $ 52,966 $ 56,690 The amount of unrealized gains and losses on debt securities as of September 30, 2022 and December 31, 2021 was not material and no unrealized losses were deemed to be other-than-temporary. In addition, the amount of unrealized gains and losses on marketable equity securities still held as of September 30, 2022 and December 31, 2021 was not material. Property, Plant and Equipment Major classes of property, plant and equipment as of September 30, 2022 and December 31, 2021 include: (in thousands) September 30, December 31, Electric Plant Electric Plant in Service $ 2,795,649 $ 2,758,445 Construction Work in Progress 130,486 74,926 Total Gross Electric Plant 2,926,135 2,833,371 Less Accumulated Depreciation and Amortization 850,741 817,302 Net Electric Plant 2,075,394 2,016,069 Nonelectric Property, Plant and Equipment Nonelectric Property, Plant and Equipment in Service 281,584 273,950 Construction Work in Progress 20,746 16,611 Total Gross Nonelectric Property, Plant and Equipment 302,330 290,561 Less Accumulated Depreciation and Amortization 191,081 182,025 Net Nonelectric Property, Plant and Equipment 111,249 108,536 Net Property, Plant and Equipment $ 2,186,643 $ 2,124,605 |
Regulatory Matters
Regulatory Matters | 9 Months Ended |
Sep. 30, 2022 | |
Regulatory Assets and Liabilities Disclosure [Abstract] | |
Regulatory Matters | Regulatory Matters Regulatory Assets and Liabilities The following presents our current and long-term regulatory assets and liabilities as of September 30, 2022 and December 31, 2021 and the period we expect to recover or refund such amounts: Period of September 30, 2022 December 31, 2021 (in thousands) Recovery/Refund Current Long-Term Current Long Term Regulatory Assets Pension and Other Postretirement Benefit Plans 1 Various $ 7,791 $ 110,183 $ 7,791 $ 114,961 Alternative Revenue Program Riders 2 Up to 2 years 7,528 1,988 11,889 5,564 Asset Retirement Obligations 1 Asset lives — 1,323 — 742 ISO Cost Recovery Trackers 1 Up to 2 years 660 740 — 1,342 Unrecovered Project Costs 1 Up to 5 years 320 1,063 2,136 1,455 Deferred Rate Case Expenses 1 Various 412 848 607 1,131 Debt Reacquisition Premiums 1 10 years 25 222 100 240 Fuel Clause Adjustments 1 Up to 1 year 13,185 — 4,819 — Other 1 Various — 226 — 73 Total Regulatory Assets $ 29,921 $ 116,593 $ 27,342 $ 125,508 Regulatory Liabilities Deferred Income Taxes Asset lives $ — $ 128,397 $ — $ 129,437 Plant Removal Obligations Asset lives 8,526 106,008 8,306 101,595 Fuel Clause Adjustments Up to 1 year — — 1,554 — Alternative Revenue Program Riders Various 4,178 6,048 5,772 3,336 Pension and Other Postretirement Benefit Plans Up to 1 year 2,603 — 2,603 — Derivative Instruments Various 5,532 — 6,214 — Other Various 275 92 395 62 Total Regulatory Liabilities $ 21,114 $ 240,545 $ 24,844 $ 234,430 1 Costs subject to recovery without a rate of return. 2 Amount eligible for recovery includes an incentive or rate of return. Minnesota Rate Case On November 2, 2020, Otter Tail Power Company (OTP) filed an initial request with the Minnesota Public Utilities Commission (MPUC) for an increase in revenue recoverable through base rates in Minnesota, and on December 3, 2020, the MPUC approved an interim annual rate increase of $6.9 million, or 3.2%, effective January 1, 2021. On February 1, 2022, the MPUC issued its written order on final rates. The key provisions of the order included a revenue requirement of $209.0 million, based on a return on rate base of 7.18% and an allowed return on equity of 9.48% on an equity ratio of 52.5%. The order also authorized recovery of our remaining Hoot Lake Plant net asset over a five-year period and approved the requested decoupling mechanism for most residential and commercial customer rate groups with a cap of 4% of annual base revenues. On May 12, 2022, OTP's final rate case compliance filing was approved by the MPUC. The filing included final revenue calculations, rate design and resulting tariff revisions, along with a determination of the interim rate refund, which resulted in an increase in revenues during the second quarter of 2022 of $4.1 million. Final rates took effect on July 1, 2022, and interim rate refunds of $15.3 million were applied to customer accounts in the third quarter of 2022. |
Short-Term and Long-Term Borrow
Short-Term and Long-Term Borrowings | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Short-Term and Long-Term Borrowings | Short-Term and Long-Term BorrowingsThe following is a summary of our outstanding short- and long-term borrowings by borrower, OTC or OTP, as of September 30, 2022 and December 31, 2021: Short-Term Debt The following is a summary of our lines of credit as of September 30, 2022 and December 31, 2021: September 30, 2022 December 31, (in thousands) Borrowing Limit Amount Outstanding Letters Amount Available Amount Available OTC Credit Agreement $ 170,000 $ — $ — $ 170,000 $ 147,363 OTP Credit Agreement 170,000 — 9,919 160,081 88,315 Total $ 340,000 $ — $ 9,919 $ 330,081 $ 235,678 On October 31, 2022, OTC entered into a Fifth Amended and Restated Credit Agreement and OTP entered into a Fourth Amended and Restated Credit Agreement, in each case amending and restating the previously existing credit agreements to extend the maturity date of each credit facility from September 30, 2026 to October 29, 2027, and to replace LIBOR as a benchmark interest rate with the Secured Overnight Finance Rate (SOFR). The adoption of SOFR as a benchmark interest rate is in advance of the scheduled elimination of LIBOR as a benchmark interest rate on June 30, 2023. No other significant terms or conditions, including borrowing capacity, credit spreads or financial covenants, were modified under these amendments and restatements. Long-Term Debt The following is a summary of outstanding long-term debt by borrower as of September 30, 2022 and December 31, 2021: (in thousands) Borrower Debt Instrument Rate Maturity September 30, December 31, OTC Guaranteed Senior Notes 3.55% 12/15/26 $ 80,000 $ 80,000 OTP Series 2007B Senior Unsecured Notes 6.15% 08/20/22 — 30,000 OTP Series 2007C Senior Unsecured Notes 6.37% 08/02/27 42,000 42,000 OTP Series 2013A Senior Unsecured Notes 4.68% 02/27/29 60,000 60,000 OTP Series 2019A Senior Unsecured Notes 3.07% 10/10/29 10,000 10,000 OTP Series 2020A Senior Unsecured Notes 3.22% 02/25/30 10,000 10,000 OTP Series 2020B Senior Unsecured Notes 3.22% 08/20/30 40,000 40,000 OTP Series 2021A Senior Unsecured Notes 2.74% 11/29/31 40,000 40,000 OTP Series 2007D Senior Unsecured Notes 6.47% 08/20/37 50,000 50,000 OTP Series 2019B Senior Unsecured Notes 3.52% 10/10/39 26,000 26,000 OTP Series 2020C Senior Unsecured Notes 3.62% 02/25/40 10,000 10,000 OTP Series 2013B Senior Unsecured Notes 5.47% 02/27/44 90,000 90,000 OTP Series 2018A Senior Unsecured Notes 4.07% 02/07/48 100,000 100,000 OTP Series 2019C Senior Unsecured Notes 3.82% 10/10/49 64,000 64,000 OTP Series 2020D Senior Unsecured Notes 3.92% 02/25/50 15,000 15,000 OTP Series 2021B Senior Unsecured Notes 3.69% 11/29/51 100,000 100,000 OTP Series 2022A Senior Unsecured Notes 3.77% 05/20/52 90,000 — Total $ 827,000 $ 767,000 Less: Current Maturities, Net of Unamortized Debt Issuance Costs — 29,983 Unamortized Long-Term Debt Issuance Costs 3,240 3,003 Total Long-Term Debt, Net of Unamortized Debt Issuance Costs $ 823,760 $ 734,014 On June 10, 2021, OTP entered into a Note Purchase Agreement pursuant to which OTP agreed to issue, in a private placement transaction, $230.0 million of senior unsecured notes consisting of (a) $40.0 million of 2.74% Series 2021A Senior Unsecured Notes due November 29, 2031, (b) $100.0 million of 3.69% Series 2021B Senior Unsecured Notes due November 29, 2051 and (c) $90.0 million of 3.77% Series 2022A Senior Unsecured Notes due May 20, 2052. In November 2021, OTP issued its Series 2021A and Series 2021B Notes for aggregate proceeds of $140.0 million, which were used to repay the Series 2011A Notes in full. In May 2022, OTP issued its Series 2022A Notes for proceeds of $90.0 million, which were used to repay the Series 2007B Senior Unsecured Notes at their maturity in August 2022, to repay short-term borrowings, to fund capital expenditures, and for other general corporate purposes. Financial Covenants Certain of OTC's and OTP's short- and long-term debt agreements require the borrower, whether OTC or OTP, to maintain certain financial covenants, including a maximum debt to total capitalization ratio of 0.60 to 1.00, a minimum interest and dividend coverage ratio of 1.50 to 1.00, and a maximum level of priority indebtedness. As of September 30, 2022, OTC and OTP were in compliance with these financial covenants. |
Employee Postretirement Benefit
Employee Postretirement Benefits | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Employee Postretirement Benefits | Employee Postretirement Benefits Pension Plan and Other Postretirement Benefits The Company sponsors a noncontributory funded pension plan (the "Pension Plan"), an unfunded, nonqualified Executive Survivor and Supplemental Retirement Plan (the "ESSRP"), both accounted for as defined benefit pension plans, and a postretirement healthcare plan accounted for as an other postretirement benefit plan. The following tables include the components of net periodic benefit cost of our defined benefit pension plans and other postretirement benefits for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Pension Benefits (Pension Plan) Pension Benefits (ESSRP) Postretirement Benefits (in thousands) 2022 2021 2022 2021 2022 2021 Service Cost $ 1,644 $ 1,866 $ 48 $ 47 $ 335 $ 430 Interest Cost 3,086 2,915 335 307 510 472 Expected Return on Assets (5,921) (5,590) — — — — Amortization of Prior Service Cost — — — — (1,433) (1,432) Amortization of Net Actuarial Loss 1,966 2,728 141 154 765 943 Net Periodic Benefit Cost $ 775 $ 1,919 $ 524 $ 508 $ 177 $ 413 Nine Months Ended September 30, Pension Benefits (Pension Plan) Pension Benefits (ESSRP) Postretirement Benefits (in thousands) 2022 2021 2022 2021 2022 2021 Service Cost $ 4,932 $ 5,597 $ 146 $ 140 $ 1,004 $ 1,291 Interest Cost 9,258 8,745 1,006 921 1,531 1,418 Expected Return on Assets (17,763) (16,769) — — — — Amortization of Prior Service Cost — — — — (4,300) (4,299) Amortization of Net Actuarial Loss 5,899 8,185 425 465 2,297 2,830 Net Periodic Benefit Cost $ 2,326 $ 5,758 $ 1,577 $ 1,526 $ 532 $ 1,240 The following table includes the impact of regulation on the recognition of periodic benefit cost arising from pension and other postretirement benefits for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Net Periodic Benefit Cost $ 1,476 $ 2,840 $ 4,435 $ 8,524 Net Amount Amortized (Deferred) Due to the Effect of Regulation 499 8 823 15 Net Periodic Benefit Cost Recognized $ 1,975 $ 2,848 $ 5,258 $ 8,539 We had no minimum funding requirements for our Pension Plan or any other postretirement benefit plans as of December 31, 2021, but made a discretionary contribution of $20.0 million to our Pension Plan in February 2022. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The reconciliation of the statutory federal income tax rate to our effective tax rate for each of the three and nine months ended September 30, 2022 and 2021 is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Federal Statutory Rate 21.0 % 21.0 % 21.0 % 21.0 % Increases (Decreases) in Tax from: State Taxes on Income, Net of Federal Tax 5.0 5.0 5.0 5.0 Production Tax Credits (PTCs) (3.6) (5.0) (4.1) (6.0) Amortization of Excess Deferred Income Taxes (0.9) (1.6) (0.7) (2.0) North Dakota Wind Tax Credit Amortization, Net of Federal Tax (0.1) (0.2) (0.2) (0.3) Corporate-Owned Life Insurance 0.2 (0.3) 0.4 (0.6) Other, Net (0.5) (0.6) 0.1 (0.2) Effective Tax Rate 21.1 % 18.3 % 21.5 % 16.9 % |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments Ashtabula III Purchase. On June 23, 2022, OTP exercised its option to acquire the Ashtabula III wind farm, a 62.4 megawatt wind farm located in eastern North Dakota, for $49.7 million, subject to certain closing adjustments. Since 2013, OTP has purchased the wind-generated electricity from the Ashtabula III wind farm pursuant to a purchase power agreement, and that agreement granted OTP the option to purchase the wind farm. The purchase has received regulatory approval. We anticipate the transaction will close, subject to certain customary closing conditions, in January 2023. Contingencies FERC ROE. In November 2013 and February 2015, customers filed complaints with the Federal Energy Regulatory Commission (FERC) seeking to reduce the return on equity (ROE) component of the transmission rates that Midcontinent Independent System Operator, Inc. (MISO) transmission owners, including OTP, may collect under the MISO tariff rate. FERC's most recent order, issued on November 19, 2020, adopted a revised ROE methodology and set the base ROE at 10.02% (10.52% with an adder) effective for the fifteen-month period from November 2013 to February 2015 and on a prospective basis beginning in September 2016. The order also dismissed any complaints covering the period from February 2015 to May 2016. On August 9, 2022, the U.S. Court of Appeals for the District of Columbia Circuit vacated the FERC order citing a lack of reasoned explanation by FERC in its adoption of its revised ROE methodology as outlined in its November 2020 order. The U.S. Court of Appeals remanded the matter to FERC to reopen the proceedings. Significant uncertainty exists as to how FERC will proceed upon remand and there is no prescribed timeline under which FERC must act. We have deferred recognition and recorded a refund liability of $2.5 million as of September 30, 2022. This refund liability reflects our best estimate of amounts previously collected from customers under the MISO tariff rate that may be required to be refunded to customers once all regulatory and judicial proceedings are complete and a final ROE is established for the periods outlined above. Regional Haze Rule (RHR). The RHR was adopted in an effort to improve visibility in national parks and wilderness areas. The RHR requires states, in coordination with the Environmental Protection Agency (EPA) and other governmental agencies, to develop and implement plans to achieve natural visibility conditions. The second RHR implementation period covers the years 2018-2028. States are required to submit a state implementation plan to assess reasonable progress with the RHR and determine what additional emission reductions are appropriate, if any. Coyote Station, OTP's jointly owned coal-fired power plant in North Dakota, is subject to assessment in the second implementation period under the North Dakota state implementation plan. The North Dakota Department of Environmental Quality (NDDEQ) submitted its state implementation plan to the EPA for approval in August 2022. In its plan, the NDDEQ concluded it is not reasonable to require additional emission controls during this planning period. The EPA has previously expressed disagreement with the NDDEQ's recommendation to forgo additional emission controls and has indicated that such a plan is not likely to be accepted. We cannot predict with certainty the impact the state implementation plan may have on our business until the state implementation plan has been approved or otherwise acted on by the EPA. However, significant emission control investments could be required and the recovery of such costs from customers would require regulatory approval. Alternatively, investments in emission control equipment may prove to be uneconomic and result in the early retirement of or the sale of our interest in Coyote Station, subject to regulatory approval. We cannot estimate the ultimate financial effects such a retirement or sale may have on our consolidated operating results, financial position or cash flows, but such amounts could be material and the recovery of such costs in rates would be subject to regulatory approval. Other Contingencies. We are party to litigation and regulatory matters arising in the normal course of business. We regularly analyze relevant information and, as necessary, estimate and record accrued liabilities for legal, regulatory enforcement and other matters in which a loss is probable of occurring and can be reasonably estimated. We believe the effect on our consolidated operating results, financial position and cash flows, if any, for the disposition of all matters pending as of September 30, 2022, other than those discussed above, will not be material. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Registration Statements On May 3, 2021, we filed a shelf registration statement with the SEC under which we may offer for sale, from time to time, either separately or together in any combination, equity, debt or other securities described in the shelf registration statement. No new debt or equity has been issued pursuant to the registration statement. The registration statement expires in May 2024. On May 3, 2021, we filed a second registration statement with the SEC for the issuance of up to 1,500,000 common shares under an Automatic Dividend Reinvestment and a Share Purchase Plan, which provides shareholders, retail customers of OTP and other interested investors methods of purchasing our common shares, by reinvesting their dividends or making optional cash investments. Shares purchased under the plan may be newly issued common shares or common shares purchased on the open market. During the nine months ended September 30, 2022, we issued 97,046 shares under this plan. We repurchased a sufficient number of shares on the open market to satisfy issuance under the plan; accordingly no proceeds from the issuance were received. As of September 30, 2022, there were 1,287,774 shares available for purchase or issuance under the plan. The registration statement expires in May 2024. Dividend Restrictions OTC is a holding company with no significant operations of its own. The primary source of funds for payments of dividends to OTC's shareholders is from dividends paid or distributions made by OTC's subsidiaries. As a result of certain statutory limitations or regulatory or financing agreements, the amount of distributions allowed to be made by OTC's subsidiaries or the amount of dividends paid by OTC could be restricted. Both the OTC Credit Agreement and OTP Credit Agreement contain restrictions on the payment of cash dividends upon a default or event of default, including failure to maintain certain financial covenants. As of September 30, 2022, we were in compliance with these financial covenants. Under the Federal Power Act, a public utility may not pay dividends from any funds properly included in a capital account. What constitutes “funds properly included in a capital account” is undefined in the Federal Power Act or the related regulations; however, the FERC has consistently interpreted the provision to allow dividends to be paid as long as i) the source of the dividends is clearly disclosed, ii) the dividend is not excessive and iii) there is no self-dealing on the part of corporate officials. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The following shows the changes in accumulated other comprehensive loss for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, 2022 2021 (in thousands) Pension and Other Postretirement Benefits Net Unrealized Gains (Losses) on Available-for-Sale Securities Total Pension and Other Postretirement Benefits Net Unrealized Gains (Losses) on Available-for-Sale Securities Total Balance, Beginning of Period $ (6,621) $ (292) $ (6,913) $ (8,425) $ 134 $ (8,291) Other Comprehensive Loss Before Reclassifications, net of tax — (172) (172) — (26) (26) Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) 106 (1) 1 (2) 107 146 (1) — (2) 146 Total Other Comprehensive Income (Loss) 106 (171) (65) 146 (26) 120 Balance, End of Period $ (6,515) $ (463) $ (6,978) $ (8,279) $ 108 $ (8,171) Nine Months Ended September 30, 2022 2021 (in thousands) Pension and Other Postretirement Benefits Net Unrealized Gains (Losses) on Available-for-Sale Securities Total Pension and Other Postretirement Benefits Net Unrealized Gains (Losses) on Available-for-Sale Securities Total Balance, Beginning of Period $ (6,537) $ 13 $ (6,524) $ (8,716) $ 209 $ (8,507) Other Comprehensive Loss Before Reclassifications, net of tax — (477) (477) — (58) (58) Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) 22 (1) 1 (2) 23 437 (1) (43) (2) 394 Total Other Comprehensive Income (Loss) 22 (476) (454) 437 (101) 336 Balance, End of Period $ (6,515) $ (463) $ (6,978) $ (8,279) $ 108 $ (8,171) (1) Included in the computation of net periodic pension and other postretirement benefit costs. See Note 7. (2) Included in other income (expense), net on the accompanying consolidated statements of income. |
Share-Based Payments
Share-Based Payments | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Payments | Share-Based Payments Stock Compensation Expense Stock-based compensation expense arising from our employee stock purchase plan and share-based compensation plans, recognized within operating expenses in the consolidated statements of income, amounted to $0.6 million and $0.8 million for the three months ended September 30, 2022 and 2021, respectively, and $6.1 million and $6.4 million for the nine months ended September 30, 2022 and 2021, respectively. Restricted Stock Awards. We grant restricted stock awards to members of our Board of Directors and restricted stock units to certain key employees. The awards vest, depending on award type and recipient, either ratably over periods of three The following is a summary of stock award activity for the nine months ended September 30, 2022: Shares Weighted Average Nonvested, January 1, 2022 138,093 $ 44.48 Granted 51,439 59.96 Vested (47,981) 45.30 Forfeited — — Nonvested, September 30, 2022 141,551 $ 49.83 The fair value of vested awards was $3.0 million and $2.1 million during the nine months ended September 30, 2022 and 2021, respectively. Stock Performance Awards. Stock performance awards are granted to executive officers and certain other key employees. The awards vest at the end of a three-year performance period. The number of common shares awarded, if any, at the end of the performance period ranges from zero to 150% of the target amount based on two performance measures: i) total shareholder return relative to a peer group and ii) return on equity. Vesting of the awards is accelerated in certain circumstances, including on retirement. The amount of common shares awarded on an accelerated vesting is based either on actual performance at the end of the performance period or the amount of common shares earned at target. The grant date fair value of stock performance awards granted during the nine months ended September 30, 2022 and 2021 was determined using a Monte Carlo fair value simulation model incorporating the following assumptions: 2022 2021 Risk-free interest rate 1.52 % 0.18 % Expected term (in years) 3.00 3.00 Expected volatility 32.00 % 32.00 % Dividend yield 2.90 % 3.60 % The risk-free interest rate was derived from yields on U.S. government bonds of a similar term. The expected term of the award is equal to the three-year performance period. Expected volatility was estimated based on actual historical volatility of our common stock. Dividend yield was estimated based on historic and future yield estimates. The following is a summary of stock performance award activity for the nine months ended September 30, 2022 (share amounts reflect awards at target): Shares Weighted Average Nonvested, January 1, 2022 189,600 $ 42.54 Granted 55,800 54.91 Vested (55,600) 43.30 Forfeited — — Nonvested, September 30, 2022 189,800 $ 45.95 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The numerator used in the calculation of both basic and diluted earnings per common share is net income. The denominator used in the calculation of basic earnings per common share is the weighted average number of common shares outstanding during the period. The denominator used in the calculation of diluted earnings per common share is derived by adjusting basic shares outstanding for the dilutive effect of potential common shares outstanding, which consist of time and performance based stock awards and employee stock purchase plan shares. The following includes the computation of the denominator for basic and diluted weighted-average shares outstanding for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Weighted Average Common Shares Outstanding – Basic 41,600 41,504 41,582 41,487 Effect of Dilutive Securities: Stock Performance Awards 276 262 251 209 Restricted Stock Awards 97 88 96 82 Employee Stock Purchase Plan Shares and Other 1 15 1 17 Dilutive Effect of Potential Common Shares 374 365 348 308 Weighted Average Common Shares Outstanding – Diluted 41,974 41,869 41,930 41,795 The amount of shares excluded from diluted weighted-average common shares outstanding because such shares were anti-dilutive was not material for the three and nine months ended September 30, 2022 and 2021. |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative InstrumentsOTP enters into derivative instruments to manage its exposure to future price variability and reduce volatility in prices for our retail customers. These derivative instruments are not designated as qualifying hedging transactions but provide for an economic hedge against future price variability. The instruments are recorded at fair value on the consolidated balance sheets. In accordance with rate-making and cost recovery processes, we recognize a regulatory asset or liability to defer losses or gains from derivative activity until settlement of the associated derivative instrument. As of September 30, 2022, OTP had outstanding pay-fixed, receive-variable swap agreements with an aggregate notional amount of 156,800 megawatt-hours of electricity, which will be settled periodically throughout 2022 and 2023. As of September 30, 2022, the fair value of these derivative instruments was $5.4 million, of which $5.5 million is included in other current assets and $0.1 million, which is included in other noncurrent liabilities, on the consolidated balance sheets. As of December 31, 2021, the fair value of these types of derivative contracts was $6.2 million, which is included in other current assets. No contracts settled during the three months ended September 30, 2022. During the nine months ended September 30, 2022, contracts matured and were settled in an aggregate amount of $2.8 million. There were no contracts settled during the three or nine months ended September 30, 2021 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following tables present our assets and liabilities measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021 classified by the input method used to measure fair value: (in thousands) Level 1 Level 2 Level 3 September 30, 2022 Assets: Investments: Money Market Funds $ 1,854 $ — $ — Mutual Funds 5,084 — — Corporate Debt Securities — 1,424 — Government-Backed and Government-Sponsored Enterprises’ Debt Securities — 7,286 — Derivative Instruments — 5,532 — Total Assets $ 6,938 $ 14,242 $ — Liabilities: Derivative Instruments $ — $ 169 $ — Total Liabilities $ — $ 169 $ — December 31, 2021 Assets: Investments: Money Market Funds $ 949 $ — $ — Mutual Funds 5,432 — — Corporate Debt Securities — 1,333 — Government-Backed and Government-Sponsored Enterprises’ Debt Securities — 7,869 — Derivative Instruments — 6,214 — Total Assets $ 6,381 $ 15,416 $ — Level 1 fair value measurements are based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access at the measurement date. The level 2 fair value measurements for government-backed and government-sponsored enterprises and corporate debt securities are determined on the basis of valuations provided by a third-party pricing service which utilizes industry accepted valuation models and observable market inputs to determine valuation. Some valuations or model inputs used by the pricing service may be based on broker quotes. The level 2 fair value measurements for derivative instruments are determined by using inputs such as forward electric commodity prices, adjusted for location differences. These inputs are observable in the marketplace throughout the full term of the instrument, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace. In addition to assets recorded at fair value on a recurring basis, we also hold financial instruments that are not recorded at fair value in the consolidated balance sheets but for which disclosure of the fair value of these financial instruments is provided. The following reflects the carrying value and estimated fair value of these assets and liabilities as of September 30, 2022 and December 31, 2021: September 30, 2022 December 31, 2021 (in thousands) Carrying Fair Value Carrying Fair Value Assets: Cash and Cash Equivalents $ 72,987 $ 72,987 $ 1,537 $ 1,537 Total 72,987 72,987 1,537 1,537 Liabilities: Short-Term Debt — — 91,163 91,163 Long-Term Debt 823,760 679,360 763,997 878,272 Total $ 823,760 $ 679,360 $ 855,160 $ 969,435 The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value: Cash Equivalents: The carrying amount approximates fair value because of the short-term maturity of those instruments. Short-Term Debt: The carrying amount approximates fair value because the debt obligations are short-term and the balances outstanding are subject to variable rates of interest which reset frequently, a Level 2 fair value input. Long-Term Debt: The fair value of long-term debt is estimated based on current market indications for borrowings of similar maturities, a Level 2 fair value input. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the SEC for interim reporting. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles. In the opinion of management, we have included all adjustments, including normal recurring accruals, necessary for a fair presentation of the consolidated financial statements for the periods presented. The consolidated financial statements and condensed notes thereto should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Because of the seasonality of our businesses and other factors, the earnings for the three and nine months ended September 30, 2022 should not be taken as an indication of earnings for all or any part of the balance of the current year or as an indication of earnings for future years. |
Use of Estimates | Use of Estimates We use estimates based on the best information available in recording transactions and balances resulting from business operations. As better information becomes available or actual amounts are known, the recorded estimates are revised. Consequently, operating results can be affected by revisions to prior accounting estimates. |
Reclassifications | Reclassifications Certain reclassifications of amounts previously reported have been made to the accompanying consolidated statements of shareholders' equity and consolidated statements of cash flows to maintain consistency and comparability between periods presented. The reclassifications had no impact on previously reported shareholders' equity, net cash provided by operating activities, net cash used in investing activities, net cash used in financing activities, or cash and cash equivalents. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Information for each segment and our unallocated corporate costs for the three and nine months ended September 30, 2022 and 2021 are as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Operating Revenue Electric $ 142,747 $ 118,775 $ 404,112 $ 348,629 Manufacturing 98,767 89,977 306,921 250,085 Plastics 142,342 107,542 447,767 264,898 Total $ 383,856 $ 316,294 $ 1,158,800 $ 863,612 Net Income (Loss) Electric $ 24,847 $ 22,528 $ 62,938 $ 55,547 Manufacturing 6,219 4,200 17,858 15,290 Plastics 55,982 28,410 170,788 60,102 Corporate (2,809) (2,384) (9,405) (5,787) Total $ 84,239 $ 52,754 $ 242,179 $ 125,152 The following provides the identifiable assets by segment and corporate assets as of September 30, 2022 and December 31, 2021: (in thousands) September 30, December 31, Identifiable Assets Electric $ 2,347,461 $ 2,283,776 Manufacturing 253,819 251,044 Plastics 179,925 162,565 Corporate 116,699 57,445 Total $ 2,897,904 $ 2,754,830 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | Presented below are our operating revenues to external customers, in total and by amounts arising from contracts with customers and alternative revenue program (ARP) arrangements, disaggregated by revenue source and segment for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Operating Revenues Electric Segment Retail: Residential $ 35,122 $ 33,902 $ 108,883 $ 100,067 Retail: Commercial and Industrial 83,022 60,557 232,532 185,376 Retail: Other 2,033 1,979 6,004 5,687 Total Retail 120,177 96,438 347,419 291,130 Transmission 13,156 13,300 37,409 37,085 Wholesale 7,196 6,944 13,196 14,711 Other 2,218 2,093 6,088 5,703 Total Electric Segment 142,747 118,775 404,112 348,629 Manufacturing Segment Metal Parts and Tooling 84,054 76,455 261,923 210,141 Plastic Products and Tooling 12,723 10,198 36,584 30,624 Scrap Metal Sales 1,990 3,324 8,414 9,320 Total Manufacturing Segment 98,767 89,977 306,921 250,085 Plastics Segment PVC Pipe 142,342 107,542 447,767 264,898 Total Operating Revenue 383,856 316,294 1,158,800 863,612 Less: Non-contract Revenues Included Above Electric Segment - ARP Revenues (548) (33) (7,937) (2,790) Total Operating Revenues from Contracts with Customers $ 384,404 $ 316,327 $ 1,166,737 $ 866,402 |
Select Balance Sheet Informat_2
Select Balance Sheet Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Receivables | Receivables as of September 30, 2022 and December 31, 2021 are as follows: (in thousands) September 30, December 31, Receivables Trade $ 167,480 $ 142,297 Other 9,052 10,591 Unbilled Receivables 18,813 23,901 Total Receivables 195,345 176,789 Less: Allowance for Credit Losses (1,548) (1,836) Receivables, net of allowance for credit losses $ 193,797 $ 174,953 |
Schedule of Activity in Allowance for Credit Losses | The following is a summary of activity in the allowance for credit losses for the nine months ended September 30, 2022 and 2021: (in thousands) 2022 2021 Beginning Balance, January 1 $ 1,836 $ 3,215 Additions Charged to Expense 518 177 Reductions for Amounts Written Off, Net of Recoveries (806) (1,060) Ending Balance, September 30 $ 1,548 $ 2,332 |
Schedule of Inventories | Inventories consist of the following as of September 30, 2022 and December 31, 2021: (in thousands) September 30, December 31, Raw Material, Fuel and Supplies $ 74,249 $ 72,882 Work in Process 33,765 35,705 Finished Goods 38,362 39,903 Total Inventories $ 146,376 $ 148,490 |
Schedule of Investments | The following is a summary of our investments as of September 30, 2022 and December 31, 2021: (in thousands) September 30, December 31, Corporate-Owned Life Insurance Policies $ 37,288 $ 41,078 Debt Securities 8,710 9,202 Money Market Funds 1,854 949 Mutual Funds 5,084 5,432 Other Investments 30 29 Total Investments $ 52,966 $ 56,690 |
Schedule of Property, Plant and Equipment | Major classes of property, plant and equipment as of September 30, 2022 and December 31, 2021 include: (in thousands) September 30, December 31, Electric Plant Electric Plant in Service $ 2,795,649 $ 2,758,445 Construction Work in Progress 130,486 74,926 Total Gross Electric Plant 2,926,135 2,833,371 Less Accumulated Depreciation and Amortization 850,741 817,302 Net Electric Plant 2,075,394 2,016,069 Nonelectric Property, Plant and Equipment Nonelectric Property, Plant and Equipment in Service 281,584 273,950 Construction Work in Progress 20,746 16,611 Total Gross Nonelectric Property, Plant and Equipment 302,330 290,561 Less Accumulated Depreciation and Amortization 191,081 182,025 Net Nonelectric Property, Plant and Equipment 111,249 108,536 Net Property, Plant and Equipment $ 2,186,643 $ 2,124,605 |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Regulatory Assets and Liabilities Disclosure [Abstract] | |
Schedule of Regulatory Assets and Liabilities | The following presents our current and long-term regulatory assets and liabilities as of September 30, 2022 and December 31, 2021 and the period we expect to recover or refund such amounts: Period of September 30, 2022 December 31, 2021 (in thousands) Recovery/Refund Current Long-Term Current Long Term Regulatory Assets Pension and Other Postretirement Benefit Plans 1 Various $ 7,791 $ 110,183 $ 7,791 $ 114,961 Alternative Revenue Program Riders 2 Up to 2 years 7,528 1,988 11,889 5,564 Asset Retirement Obligations 1 Asset lives — 1,323 — 742 ISO Cost Recovery Trackers 1 Up to 2 years 660 740 — 1,342 Unrecovered Project Costs 1 Up to 5 years 320 1,063 2,136 1,455 Deferred Rate Case Expenses 1 Various 412 848 607 1,131 Debt Reacquisition Premiums 1 10 years 25 222 100 240 Fuel Clause Adjustments 1 Up to 1 year 13,185 — 4,819 — Other 1 Various — 226 — 73 Total Regulatory Assets $ 29,921 $ 116,593 $ 27,342 $ 125,508 Regulatory Liabilities Deferred Income Taxes Asset lives $ — $ 128,397 $ — $ 129,437 Plant Removal Obligations Asset lives 8,526 106,008 8,306 101,595 Fuel Clause Adjustments Up to 1 year — — 1,554 — Alternative Revenue Program Riders Various 4,178 6,048 5,772 3,336 Pension and Other Postretirement Benefit Plans Up to 1 year 2,603 — 2,603 — Derivative Instruments Various 5,532 — 6,214 — Other Various 275 92 395 62 Total Regulatory Liabilities $ 21,114 $ 240,545 $ 24,844 $ 234,430 1 Costs subject to recovery without a rate of return. 2 Amount eligible for recovery includes an incentive or rate of return. |
Short-Term and Long-Term Borr_2
Short-Term and Long-Term Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Line of Credit Facilities | The following is a summary of our lines of credit as of September 30, 2022 and December 31, 2021: September 30, 2022 December 31, (in thousands) Borrowing Limit Amount Outstanding Letters Amount Available Amount Available OTC Credit Agreement $ 170,000 $ — $ — $ 170,000 $ 147,363 OTP Credit Agreement 170,000 — 9,919 160,081 88,315 Total $ 340,000 $ — $ 9,919 $ 330,081 $ 235,678 |
Schedule of Debt | The following is a summary of outstanding long-term debt by borrower as of September 30, 2022 and December 31, 2021: (in thousands) Borrower Debt Instrument Rate Maturity September 30, December 31, OTC Guaranteed Senior Notes 3.55% 12/15/26 $ 80,000 $ 80,000 OTP Series 2007B Senior Unsecured Notes 6.15% 08/20/22 — 30,000 OTP Series 2007C Senior Unsecured Notes 6.37% 08/02/27 42,000 42,000 OTP Series 2013A Senior Unsecured Notes 4.68% 02/27/29 60,000 60,000 OTP Series 2019A Senior Unsecured Notes 3.07% 10/10/29 10,000 10,000 OTP Series 2020A Senior Unsecured Notes 3.22% 02/25/30 10,000 10,000 OTP Series 2020B Senior Unsecured Notes 3.22% 08/20/30 40,000 40,000 OTP Series 2021A Senior Unsecured Notes 2.74% 11/29/31 40,000 40,000 OTP Series 2007D Senior Unsecured Notes 6.47% 08/20/37 50,000 50,000 OTP Series 2019B Senior Unsecured Notes 3.52% 10/10/39 26,000 26,000 OTP Series 2020C Senior Unsecured Notes 3.62% 02/25/40 10,000 10,000 OTP Series 2013B Senior Unsecured Notes 5.47% 02/27/44 90,000 90,000 OTP Series 2018A Senior Unsecured Notes 4.07% 02/07/48 100,000 100,000 OTP Series 2019C Senior Unsecured Notes 3.82% 10/10/49 64,000 64,000 OTP Series 2020D Senior Unsecured Notes 3.92% 02/25/50 15,000 15,000 OTP Series 2021B Senior Unsecured Notes 3.69% 11/29/51 100,000 100,000 OTP Series 2022A Senior Unsecured Notes 3.77% 05/20/52 90,000 — Total $ 827,000 $ 767,000 Less: Current Maturities, Net of Unamortized Debt Issuance Costs — 29,983 Unamortized Long-Term Debt Issuance Costs 3,240 3,003 Total Long-Term Debt, Net of Unamortized Debt Issuance Costs $ 823,760 $ 734,014 |
Employee Postretirement Benef_2
Employee Postretirement Benefits (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Net Periodic Benefit Costs | The following tables include the components of net periodic benefit cost of our defined benefit pension plans and other postretirement benefits for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Pension Benefits (Pension Plan) Pension Benefits (ESSRP) Postretirement Benefits (in thousands) 2022 2021 2022 2021 2022 2021 Service Cost $ 1,644 $ 1,866 $ 48 $ 47 $ 335 $ 430 Interest Cost 3,086 2,915 335 307 510 472 Expected Return on Assets (5,921) (5,590) — — — — Amortization of Prior Service Cost — — — — (1,433) (1,432) Amortization of Net Actuarial Loss 1,966 2,728 141 154 765 943 Net Periodic Benefit Cost $ 775 $ 1,919 $ 524 $ 508 $ 177 $ 413 Nine Months Ended September 30, Pension Benefits (Pension Plan) Pension Benefits (ESSRP) Postretirement Benefits (in thousands) 2022 2021 2022 2021 2022 2021 Service Cost $ 4,932 $ 5,597 $ 146 $ 140 $ 1,004 $ 1,291 Interest Cost 9,258 8,745 1,006 921 1,531 1,418 Expected Return on Assets (17,763) (16,769) — — — — Amortization of Prior Service Cost — — — — (4,300) (4,299) Amortization of Net Actuarial Loss 5,899 8,185 425 465 2,297 2,830 Net Periodic Benefit Cost $ 2,326 $ 5,758 $ 1,577 $ 1,526 $ 532 $ 1,240 The following table includes the impact of regulation on the recognition of periodic benefit cost arising from pension and other postretirement benefits for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Net Periodic Benefit Cost $ 1,476 $ 2,840 $ 4,435 $ 8,524 Net Amount Amortized (Deferred) Due to the Effect of Regulation 499 8 823 15 Net Periodic Benefit Cost Recognized $ 1,975 $ 2,848 $ 5,258 $ 8,539 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation of the statutory federal income tax rate to our effective tax rate for each of the three and nine months ended September 30, 2022 and 2021 is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Federal Statutory Rate 21.0 % 21.0 % 21.0 % 21.0 % Increases (Decreases) in Tax from: State Taxes on Income, Net of Federal Tax 5.0 5.0 5.0 5.0 Production Tax Credits (PTCs) (3.6) (5.0) (4.1) (6.0) Amortization of Excess Deferred Income Taxes (0.9) (1.6) (0.7) (2.0) North Dakota Wind Tax Credit Amortization, Net of Federal Tax (0.1) (0.2) (0.2) (0.3) Corporate-Owned Life Insurance 0.2 (0.3) 0.4 (0.6) Other, Net (0.5) (0.6) 0.1 (0.2) Effective Tax Rate 21.1 % 18.3 % 21.5 % 16.9 % |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Loss | The following shows the changes in accumulated other comprehensive loss for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, 2022 2021 (in thousands) Pension and Other Postretirement Benefits Net Unrealized Gains (Losses) on Available-for-Sale Securities Total Pension and Other Postretirement Benefits Net Unrealized Gains (Losses) on Available-for-Sale Securities Total Balance, Beginning of Period $ (6,621) $ (292) $ (6,913) $ (8,425) $ 134 $ (8,291) Other Comprehensive Loss Before Reclassifications, net of tax — (172) (172) — (26) (26) Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) 106 (1) 1 (2) 107 146 (1) — (2) 146 Total Other Comprehensive Income (Loss) 106 (171) (65) 146 (26) 120 Balance, End of Period $ (6,515) $ (463) $ (6,978) $ (8,279) $ 108 $ (8,171) Nine Months Ended September 30, 2022 2021 (in thousands) Pension and Other Postretirement Benefits Net Unrealized Gains (Losses) on Available-for-Sale Securities Total Pension and Other Postretirement Benefits Net Unrealized Gains (Losses) on Available-for-Sale Securities Total Balance, Beginning of Period $ (6,537) $ 13 $ (6,524) $ (8,716) $ 209 $ (8,507) Other Comprehensive Loss Before Reclassifications, net of tax — (477) (477) — (58) (58) Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) 22 (1) 1 (2) 23 437 (1) (43) (2) 394 Total Other Comprehensive Income (Loss) 22 (476) (454) 437 (101) 336 Balance, End of Period $ (6,515) $ (463) $ (6,978) $ (8,279) $ 108 $ (8,171) (1) Included in the computation of net periodic pension and other postretirement benefit costs. See Note 7. (2) Included in other income (expense), net on the accompanying consolidated statements of income. |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation Arrangements by Share-based Payment Award | The following is a summary of stock award activity for the nine months ended September 30, 2022: Shares Weighted Average Nonvested, January 1, 2022 138,093 $ 44.48 Granted 51,439 59.96 Vested (47,981) 45.30 Forfeited — — Nonvested, September 30, 2022 141,551 $ 49.83 The grant date fair value of stock performance awards granted during the nine months ended September 30, 2022 and 2021 was determined using a Monte Carlo fair value simulation model incorporating the following assumptions: 2022 2021 Risk-free interest rate 1.52 % 0.18 % Expected term (in years) 3.00 3.00 Expected volatility 32.00 % 32.00 % Dividend yield 2.90 % 3.60 % The following is a summary of stock performance award activity for the nine months ended September 30, 2022 (share amounts reflect awards at target): Shares Weighted Average Nonvested, January 1, 2022 189,600 $ 42.54 Granted 55,800 54.91 Vested (55,600) 43.30 Forfeited — — Nonvested, September 30, 2022 189,800 $ 45.95 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following includes the computation of the denominator for basic and diluted weighted-average shares outstanding for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Weighted Average Common Shares Outstanding – Basic 41,600 41,504 41,582 41,487 Effect of Dilutive Securities: Stock Performance Awards 276 262 251 209 Restricted Stock Awards 97 88 96 82 Employee Stock Purchase Plan Shares and Other 1 15 1 17 Dilutive Effect of Potential Common Shares 374 365 348 308 Weighted Average Common Shares Outstanding – Diluted 41,974 41,869 41,930 41,795 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurements, Recurring and Nonrecurring | The following tables present our assets and liabilities measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021 classified by the input method used to measure fair value: (in thousands) Level 1 Level 2 Level 3 September 30, 2022 Assets: Investments: Money Market Funds $ 1,854 $ — $ — Mutual Funds 5,084 — — Corporate Debt Securities — 1,424 — Government-Backed and Government-Sponsored Enterprises’ Debt Securities — 7,286 — Derivative Instruments — 5,532 — Total Assets $ 6,938 $ 14,242 $ — Liabilities: Derivative Instruments $ — $ 169 $ — Total Liabilities $ — $ 169 $ — December 31, 2021 Assets: Investments: Money Market Funds $ 949 $ — $ — Mutual Funds 5,432 — — Corporate Debt Securities — 1,333 — Government-Backed and Government-Sponsored Enterprises’ Debt Securities — 7,869 — Derivative Instruments — 6,214 — Total Assets $ 6,381 $ 15,416 $ — |
Schedule of Fair Value of Assets and Liabilities | The following reflects the carrying value and estimated fair value of these assets and liabilities as of September 30, 2022 and December 31, 2021: September 30, 2022 December 31, 2021 (in thousands) Carrying Fair Value Carrying Fair Value Assets: Cash and Cash Equivalents $ 72,987 $ 72,987 $ 1,537 $ 1,537 Total 72,987 72,987 1,537 1,537 Liabilities: Short-Term Debt — — 91,163 91,163 Long-Term Debt 823,760 679,360 763,997 878,272 Total $ 823,760 $ 679,360 $ 855,160 $ 969,435 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 9 Months Ended |
Sep. 30, 2022 segment | |
Accounting Policies [Abstract] | |
Number of operating segments | 3 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 9 Months Ended |
Sep. 30, 2022 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Information - Schedule
Segment Information - Schedule of Segment Reporting Information, by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||||
Total Operating Revenues | $ 383,856 | $ 316,294 | $ 1,158,800 | $ 863,612 | |
Net Income (Loss) | 84,239 | 52,754 | 242,179 | 125,152 | |
Identifiable Assets | 2,897,904 | 2,897,904 | $ 2,754,830 | ||
Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Net Income (Loss) | (2,809) | (2,384) | (9,405) | (5,787) | |
Identifiable Assets | 116,699 | 116,699 | 57,445 | ||
Electric | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Total Operating Revenues | 142,747 | 118,775 | 404,112 | 348,629 | |
Net Income (Loss) | 24,847 | 22,528 | 62,938 | 55,547 | |
Identifiable Assets | 2,347,461 | 2,347,461 | 2,283,776 | ||
Manufacturing | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Total Operating Revenues | 98,767 | 89,977 | 306,921 | 250,085 | |
Net Income (Loss) | 6,219 | 4,200 | 17,858 | 15,290 | |
Identifiable Assets | 253,819 | 253,819 | 251,044 | ||
Plastics | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Total Operating Revenues | 142,342 | 107,542 | 447,767 | 264,898 | |
Net Income (Loss) | 55,982 | $ 28,410 | 170,788 | $ 60,102 | |
Identifiable Assets | $ 179,925 | $ 179,925 | $ 162,565 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | $ 383,856 | $ 316,294 | $ 1,158,800 | $ 863,612 |
Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues from Contracts with Customers | 384,404 | 316,327 | 1,166,737 | 866,402 |
Operating Segments | Electric | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | 142,747 | 118,775 | 404,112 | 348,629 |
Electric Segment - ARP Revenues | (548) | (33) | (7,937) | (2,790) |
Operating Segments | Manufacturing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | 98,767 | 89,977 | 306,921 | 250,085 |
Operating Segments | Plastics | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | 142,342 | 107,542 | 447,767 | 264,898 |
Operating Segments | Total Retail | Electric | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | 120,177 | 96,438 | 347,419 | 291,130 |
Operating Segments | Retail: Residential | Electric | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | 35,122 | 33,902 | 108,883 | 100,067 |
Operating Segments | Retail: Commercial and Industrial | Electric | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | 83,022 | 60,557 | 232,532 | 185,376 |
Operating Segments | Retail: Other | Electric | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | 2,033 | 1,979 | 6,004 | 5,687 |
Operating Segments | Transmission | Electric | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | 13,156 | 13,300 | 37,409 | 37,085 |
Operating Segments | Wholesale | Electric | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | 7,196 | 6,944 | 13,196 | 14,711 |
Operating Segments | Other | Electric | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | 2,218 | 2,093 | 6,088 | 5,703 |
Operating Segments | Metal Parts and Tooling | Manufacturing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | 84,054 | 76,455 | 261,923 | 210,141 |
Operating Segments | Plastic Products and Tooling | Manufacturing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | 12,723 | 10,198 | 36,584 | 30,624 |
Operating Segments | Scrap Metal Sales | Manufacturing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | $ 1,990 | $ 3,324 | $ 8,414 | $ 9,320 |
Select Balance Sheet Informat_3
Select Balance Sheet Information - Schedule of Receivables (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Trade | $ 167,480 | $ 142,297 | ||
Other | 9,052 | 10,591 | ||
Unbilled Receivables | 18,813 | 23,901 | ||
Total Receivables | 195,345 | 176,789 | ||
Less: Allowance for Credit Losses | (1,548) | (1,836) | $ (2,332) | $ (3,215) |
Receivables, net of allowance for credit losses | $ 193,797 | $ 174,953 |
Select Balance Sheet Informat_4
Select Balance Sheet Information - Summary of Activity in Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning Balance, January 1 | $ 1,836 | $ 3,215 |
Additions Charged to Expense | 518 | 177 |
Reductions for Amounts Written Off, Net of Recoveries | (806) | (1,060) |
Ending Balance, September 30 | $ 1,548 | $ 2,332 |
Select Balance Sheet Informat_5
Select Balance Sheet Information - Schedule of Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw Material, Fuel and Supplies | $ 74,249 | $ 72,882 |
Work in Process | 33,765 | 35,705 |
Finished Goods | 38,362 | 39,903 |
Inventories | $ 146,376 | $ 148,490 |
Select Balance Sheet Informat_6
Select Balance Sheet Information - Schedule of Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Corporate-Owned Life Insurance Policies | $ 37,288 | $ 41,078 |
Debt Securities | 8,710 | 9,202 |
Money Market Funds | 1,854 | 949 |
Mutual Funds | 5,084 | 5,432 |
Other Investments | 30 | 29 |
Total Investments | $ 52,966 | $ 56,690 |
Select Balance Sheet Informat_7
Select Balance Sheet Information - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, net of accumulated depreciation | $ 2,186,643 | $ 2,124,605 |
Electric Plant | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,926,135 | 2,833,371 |
Less Accumulated Depreciation and Amortization | 850,741 | 817,302 |
Property, Plant and Equipment, net of accumulated depreciation | 2,075,394 | 2,016,069 |
Nonelectric Property, Plant and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 302,330 | 290,561 |
Less Accumulated Depreciation and Amortization | 191,081 | 182,025 |
Property, Plant and Equipment, net of accumulated depreciation | 111,249 | 108,536 |
Electric Plant in Service | Electric Plant | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,795,649 | 2,758,445 |
Construction Work in Progress | Electric Plant | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 130,486 | 74,926 |
Construction Work in Progress | Nonelectric Property, Plant and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 20,746 | 16,611 |
Nonelectric Property, Plant and Equipment in Service | Nonelectric Property, Plant and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 281,584 | $ 273,950 |
Regulatory Matters - Schedule o
Regulatory Matters - Schedule of Regulatory Assets and Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory assets - current | $ 29,921 | $ 27,342 |
Regulatory assets, long-term | 116,593 | 125,508 |
Regulatory liabilities, current | 21,114 | 24,844 |
Regulatory liabilities, long -term | 240,545 | 234,430 |
Deferred Income Taxes | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory liabilities, current | 0 | 0 |
Regulatory liabilities, long -term | 128,397 | 129,437 |
Plant Removal Obligations | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory liabilities, current | 8,526 | 8,306 |
Regulatory liabilities, long -term | 106,008 | 101,595 |
Fuel Clause Adjustments | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory liabilities, current | 0 | 1,554 |
Regulatory liabilities, long -term | $ 0 | 0 |
Regulatory Liabilities - Remaining Recovery/Refund Period | 1 year | |
Alternative Revenue Program Riders | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory liabilities, current | $ 4,178 | 5,772 |
Regulatory liabilities, long -term | 6,048 | 3,336 |
Pension and Other Postretirement Benefit Plans | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory liabilities, current | 2,603 | 2,603 |
Regulatory liabilities, long -term | $ 0 | 0 |
Regulatory Liabilities - Remaining Recovery/Refund Period | 1 year | |
Derivative Instruments | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory liabilities, current | $ 5,532 | 6,214 |
Regulatory liabilities, long -term | 0 | 0 |
Other | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory liabilities, current | 275 | 395 |
Regulatory liabilities, long -term | 92 | 62 |
Pension and Other Postretirement Benefit Plans | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory assets - current | 7,791 | 7,791 |
Regulatory assets, long-term | 110,183 | 114,961 |
Alternative Revenue Program Riders | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory assets - current | 7,528 | 11,889 |
Regulatory assets, long-term | $ 1,988 | 5,564 |
Regulatory Assets - Remaining Recovery/Refund Period | 2 years | |
Asset Retirement Obligations | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory assets - current | $ 0 | 0 |
Regulatory assets, long-term | 1,323 | 742 |
ISO Cost Recovery Trackers | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory assets - current | 660 | 0 |
Regulatory assets, long-term | $ 740 | 1,342 |
Regulatory Assets - Remaining Recovery/Refund Period | 2 years | |
Unrecovered Project Costs | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory assets - current | $ 320 | 2,136 |
Regulatory assets, long-term | $ 1,063 | 1,455 |
Regulatory Assets - Remaining Recovery/Refund Period | 5 years | |
Deferred Rate Case Expenses | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory assets - current | $ 412 | 607 |
Regulatory assets, long-term | 848 | 1,131 |
Debt Reacquisition Premiums | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory assets - current | 25 | 100 |
Regulatory assets, long-term | $ 222 | 240 |
Regulatory Assets - Remaining Recovery/Refund Period | 10 years | |
Fuel Clause Adjustments | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory assets - current | $ 13,185 | 4,819 |
Regulatory assets, long-term | $ 0 | 0 |
Regulatory Assets - Remaining Recovery/Refund Period | 1 year | |
Other | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory assets - current | $ 0 | 0 |
Regulatory assets, long-term | $ 226 | $ 73 |
Regulatory Matters - Narrative
Regulatory Matters - Narrative (Details) - Minnesota Rate Case - MPUC - USD ($) $ in Millions | 3 Months Ended | |||
Feb. 01, 2022 | Dec. 03, 2020 | Sep. 30, 2022 | Jun. 30, 2022 | |
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Revenue, approved rate increase, amount | $ 6.9 | $ 15.3 | $ 4.1 | |
Revenue, approved rate increase, percent | 3.20% | |||
Revenue requirement amount | $ 209 | |||
Approved return on base rate, percent | 7.18% | |||
Approved return on equity, percent | 9.48% | |||
Approved equity ratio, percent | 52.50% | |||
Recovery period | 5 years | |||
Approved cap of annual base revenues, percent | 4% |
Short-Term and Long-Term Borr_3
Short-Term and Long-Term Borrowings - Lines of Credit (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Line of Credit Facility [Line Items] | ||
Borrowing Limit | $ 340,000,000 | |
Amount Outstanding | 0 | $ 91,163,000 |
Letters of Credit | 9,919,000 | |
Amount Available | 330,081,000 | 235,678,000 |
OTC Credit Agreement | ||
Line of Credit Facility [Line Items] | ||
Borrowing Limit | 170,000,000 | |
Amount Outstanding | 0 | |
Letters of Credit | 0 | |
Amount Available | 170,000,000 | 147,363,000 |
OTP Credit Agreement | ||
Line of Credit Facility [Line Items] | ||
Borrowing Limit | 170,000,000 | |
Amount Outstanding | 0 | |
Letters of Credit | 9,919,000 | |
Amount Available | $ 160,081,000 | $ 88,315,000 |
Short-Term and Long-Term Borr_4
Short-Term and Long-Term Borrowings - Breakdown of Outstanding Long-term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 827,000 | $ 767,000 |
Current Maturities, Net of Unamortized Debt Issuance Costs | 0 | 29,983 |
Unamortized Long-Term Debt Issuance Costs | 3,240 | 3,003 |
Total Long-Term Debt, Net of Unamortized Debt Issuance Costs | $ 823,760 | 734,014 |
Guaranteed Senior Notes | ||
Debt Instrument [Line Items] | ||
Rate | 3.55% | |
Long-term debt | $ 80,000 | 80,000 |
Series 2007B Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Rate | 6.15% | |
Long-term debt | $ 0 | 30,000 |
Series 2007C Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Rate | 6.37% | |
Long-term debt | $ 42,000 | 42,000 |
Series 2013A Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Rate | 4.68% | |
Long-term debt | $ 60,000 | 60,000 |
Series 2019A Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Rate | 3.07% | |
Long-term debt | $ 10,000 | 10,000 |
Series 2020A Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Rate | 3.22% | |
Long-term debt | $ 10,000 | 10,000 |
Series 2020B Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Rate | 3.22% | |
Long-term debt | $ 40,000 | 40,000 |
Series 2021A Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Rate | 2.74% | |
Long-term debt | $ 40,000 | 40,000 |
Series 2007D Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Rate | 6.47% | |
Long-term debt | $ 50,000 | 50,000 |
Series 2019B Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Rate | 3.52% | |
Long-term debt | $ 26,000 | 26,000 |
Series 2020C Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Rate | 3.62% | |
Long-term debt | $ 10,000 | 10,000 |
Series 2013B Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Rate | 5.47% | |
Long-term debt | $ 90,000 | 90,000 |
Series 2018A Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Rate | 4.07% | |
Long-term debt | $ 100,000 | 100,000 |
Series 2019C Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Rate | 3.82% | |
Long-term debt | $ 64,000 | 64,000 |
Series 2020D Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Rate | 3.92% | |
Long-term debt | $ 15,000 | 15,000 |
Series 2021B Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Rate | 3.69% | |
Long-term debt | $ 100,000 | 100,000 |
Series 2022A Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Rate | 3.77% | |
Long-term debt | $ 90,000 | $ 0 |
Short-Term and Long-Term Borr_5
Short-Term and Long-Term Borrowings - Narrative (Details) - USD ($) | 1 Months Ended | |||
May 31, 2022 | Nov. 30, 2021 | Sep. 30, 2022 | Jun. 10, 2021 | |
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 230,000,000 | |||
Proceeds from issuance of debt | $ 90,000,000 | $ 140,000,000 | ||
Series 2021A Senior Unsecured Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate (as a percent) | 2.74% | |||
Series 2021A Senior Unsecured Notes | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 40,000,000 | |||
Interest rate (as a percent) | 2.74% | |||
Series 2021B Senior Unsecured Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate (as a percent) | 3.69% | |||
Series 2021B Senior Unsecured Notes | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 100,000,000 | |||
Interest rate (as a percent) | 3.69% | |||
Series 2022A Senior Unsecured Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate (as a percent) | 3.77% | |||
Series 2022A Senior Unsecured Notes | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 90,000,000 | |||
Interest rate (as a percent) | 3.77% | |||
Minimum | ||||
Debt Instrument [Line Items] | ||||
Interest and dividend coverage ratio | 1.50 | |||
Maximum | ||||
Debt Instrument [Line Items] | ||||
Debt to total capitalization ratio | 60% |
Employee Postretirement Benef_3
Employee Postretirement Benefits - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Net Periodic Benefit Cost | $ 1,476 | $ 2,840 | $ 4,435 | $ 8,524 |
Pension Benefits (Pension Plan) | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service Cost | 1,644 | 1,866 | 4,932 | 5,597 |
Interest Cost | 3,086 | 2,915 | 9,258 | 8,745 |
Expected Return on Assets | (5,921) | (5,590) | (17,763) | (16,769) |
Amortization of Prior Service Cost | 0 | 0 | 0 | 0 |
Amortization of Net Actuarial Loss | 1,966 | 2,728 | 5,899 | 8,185 |
Net Periodic Benefit Cost | 775 | 1,919 | 2,326 | 5,758 |
Pension Benefits (ESSRP) | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service Cost | 48 | 47 | 146 | 140 |
Interest Cost | 335 | 307 | 1,006 | 921 |
Expected Return on Assets | 0 | 0 | 0 | 0 |
Amortization of Prior Service Cost | 0 | 0 | 0 | 0 |
Amortization of Net Actuarial Loss | 141 | 154 | 425 | 465 |
Net Periodic Benefit Cost | 524 | 508 | 1,577 | 1,526 |
Postretirement Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service Cost | 335 | 430 | 1,004 | 1,291 |
Interest Cost | 510 | 472 | 1,531 | 1,418 |
Expected Return on Assets | 0 | 0 | 0 | 0 |
Amortization of Prior Service Cost | (1,433) | (1,432) | (4,300) | (4,299) |
Amortization of Net Actuarial Loss | 765 | 943 | 2,297 | 2,830 |
Net Periodic Benefit Cost | $ 177 | $ 413 | $ 532 | $ 1,240 |
Employee Postretirement Benef_4
Employee Postretirement Benefits - Composition of Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Retirement Benefits [Abstract] | ||||
Net Periodic Benefit Cost | $ 1,476 | $ 2,840 | $ 4,435 | $ 8,524 |
Net Amount Amortized (Deferred) Due to the Effect of Regulation | 499 | 8 | 823 | 15 |
Net Periodic Benefit Cost Recognized | $ 1,975 | $ 2,848 | $ 5,258 | $ 8,539 |
Employee Postretirement Benef_5
Employee Postretirement Benefits - Narrative (Details) $ in Millions | 1 Months Ended |
Feb. 28, 2022 USD ($) | |
Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Contributions by employer | $ 20 |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Rate (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Federal Statutory Rate | 21% | 21% | 21% | 21% |
Increases (Decreases) in Tax from: | ||||
State Taxes on Income, Net of Federal Tax | 5% | 5% | 5% | 5% |
Production Tax Credits (PTCs) | (3.60%) | (5.00%) | (4.10%) | (6.00%) |
Amortization of Excess Deferred Income Taxes | (0.90%) | (1.60%) | (0.70%) | (2.00%) |
North Dakota Wind Tax Credit Amortization, Net of Federal Tax | (0.10%) | (0.20%) | (0.20%) | (0.30%) |
Corporate-Owned Life Insurance | 0.20% | (0.30%) | 0.40% | (0.60%) |
Other, Net | (0.50%) | (0.60%) | 0.10% | (0.20%) |
Effective Tax Rate | 21.10% | 18.30% | 21.50% | 16.90% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Otter Tail Power Company $ in Millions | Jun. 23, 2022 USD ($) MWh | Sep. 30, 2022 USD ($) |
Other Commitments [Line Items] | ||
Option exercised | MWh | 62.4 | |
Payments to acquire wind farm | $ 49.7 | |
Federal Energy Regulatory Commission | ||
Other Commitments [Line Items] | ||
Estimated liability of refund obligation | $ 2.5 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Jan. 26, 2022 | May 03, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | |
Class of Stock [Line Items] | ||||
Total capitalization | $ 2,007,783 | $ 1,724,791 | ||
Otter Tail Power Company | ||||
Class of Stock [Line Items] | ||||
Equity to total capitalization ratio | 54.90% | |||
Net assets restricted from distribution | $ 686,600 | |||
Minimum | Otter Tail Power Company | Minnesota Public Utilities Commission | ||||
Class of Stock [Line Items] | ||||
Public utilities, requested equity capital structure, percentage | 48% | |||
Maximum | Otter Tail Power Company | ||||
Class of Stock [Line Items] | ||||
Total capitalization | $ 1,700,000 | |||
Maximum | Otter Tail Power Company | Minnesota Public Utilities Commission | ||||
Class of Stock [Line Items] | ||||
Public utilities, requested equity capital structure, percentage | 58.70% | |||
Second Shelf Registration | ||||
Class of Stock [Line Items] | ||||
Shelf registration (in shares) | 1,500,000 | |||
Number of shares issued (in shares) | 97,046 | |||
Number of shares available for grant (in shares) | 1,287,774 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 1,116,543 | $ 915,123 | $ 990,777 | $ 870,966 |
Other Comprehensive Loss Before Reclassifications, net of tax | (172) | (26) | (477) | (58) |
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) | 107 | 146 | 23 | 394 |
Total Other Comprehensive Income (Loss) | (65) | 120 | (454) | 336 |
Ending balance | 1,184,023 | 952,482 | 1,184,023 | 952,482 |
Pension and Other Postretirement Benefits | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (6,621) | (8,425) | (6,537) | (8,716) |
Other Comprehensive Loss Before Reclassifications, net of tax | 0 | 0 | 0 | 0 |
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) | 106 | 146 | 22 | 437 |
Total Other Comprehensive Income (Loss) | 106 | 146 | 22 | 437 |
Ending balance | (6,515) | (8,279) | (6,515) | (8,279) |
Net Unrealized Gains (Losses) on Available-for-Sale Securities | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (292) | 134 | 13 | 209 |
Other Comprehensive Loss Before Reclassifications, net of tax | (172) | (26) | (477) | (58) |
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) | 1 | 0 | 1 | (43) |
Total Other Comprehensive Income (Loss) | (171) | (26) | (476) | (101) |
Ending balance | (463) | 108 | (463) | 108 |
Accumulated Other Comprehensive Income (Loss) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (6,913) | (8,291) | (6,524) | (8,507) |
Total Other Comprehensive Income (Loss) | (65) | 120 | (454) | 336 |
Ending balance | $ (6,978) | $ (8,171) | $ (6,978) | $ (8,171) |
Share-Based Payments - Narrativ
Share-Based Payments - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based payment arrangement, expense | $ 0.6 | $ 0.8 | $ 6.1 | $ 6.4 |
Restricted Stock Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards vesting period | 4 years | |||
Fair value of awards vested | $ 3 | 2.1 | ||
Restricted Stock Awards | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 3 years | |||
Restricted Stock Awards | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 4 years | |||
Stock Performance Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 3 years | |||
Fair value of awards vested | $ 5.1 | $ 2.5 | ||
Stock Performance Awards | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of target amount as actual payment | 0% | |||
Stock Performance Awards | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of target amount as actual payment | 150% |
Share-Based Payments - Summary
Share-Based Payments - Summary of Restricted Stock Awards and Stock Performance Awards (Details) | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Restricted Stock Awards | |
Shares | |
Beginning of year (in shares) | shares | 138,093 |
Granted (in shares) | shares | 51,439 |
Vested (in shares) | shares | (47,981) |
Forfeited (in shares) | shares | 0 |
End of year (in shares) | shares | 141,551 |
Weighted Average Grant-Date Fair Value | |
Beginning of year (in dollars per share) | $ / shares | $ 44.48 |
Granted (in dollars per share) | $ / shares | 59.96 |
Vested (in dollars per share) | $ / shares | 45.30 |
Forfeited (in dollars per share) | $ / shares | 0 |
End of year (in dollars per share) | $ / shares | $ 49.83 |
Stock Performance Awards | |
Shares | |
Beginning of year (in shares) | shares | 189,600 |
Granted (in shares) | shares | 55,800 |
Vested (in shares) | shares | (55,600) |
Forfeited (in shares) | shares | 0 |
End of year (in shares) | shares | 189,800 |
Weighted Average Grant-Date Fair Value | |
Beginning of year (in dollars per share) | $ / shares | $ 42.54 |
Granted (in dollars per share) | $ / shares | 54.91 |
Vested (in dollars per share) | $ / shares | 43.30 |
Forfeited (in dollars per share) | $ / shares | 0 |
End of year (in dollars per share) | $ / shares | $ 45.95 |
Share-Based Payments - Weighted
Share-Based Payments - Weighted-Average Assumptions (Details) - Stock Performance Awards | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 1.52% | 0.18% |
Expected term (in years) | 3 years | 3 years |
Expected volatility | 32% | 32% |
Dividend yield | 2.90% | 3.60% |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Weighted Average Common Shares Outstanding - Basic (in shares) | 41,600 | 41,504 | 41,582 | 41,487 |
Effect of Dilutive Securities: | ||||
Total Dilutive Shares (in shares) | 374 | 365 | 348 | 308 |
Weighted Average Common Shares Outstanding – Diluted (in shares) | 41,974 | 41,869 | 41,930 | 41,795 |
Stock Performance Awards | ||||
Effect of Dilutive Securities: | ||||
Effect of Dilutive Securities (in shares) | 276 | 262 | 251 | 209 |
Restricted Stock Awards | ||||
Effect of Dilutive Securities: | ||||
Effect of Dilutive Securities (in shares) | 97 | 88 | 96 | 82 |
Employee Stock Purchase Plan Shares and Other | ||||
Effect of Dilutive Securities: | ||||
Effect of Dilutive Securities (in shares) | 1 | 15 | 1 | 17 |
Derivative Instruments (Details
Derivative Instruments (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) MWh | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative Instruments | $ 5,400,000 | $ 5,400,000 | |||
Current derivative asset | 5,500,000 | 5,500,000 | $ 6,200,000 | ||
Noncurrent derivative liability | 100,000 | $ 100,000 | |||
Swap | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Notional amount of outstanding swap agreements | MWh | 156,800 | ||||
Settlement of derivative contract | $ 0 | $ 0 | $ 2,800,000 | $ 0 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Measurements, Recurring and Nonrecurring (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Investments: | ||
Debt Securities | $ 8,710 | $ 9,202 |
Derivative Instruments | 5,400 | |
Level 1 | Fair Value, Recurring | ||
Investments: | ||
Money Market Funds | 1,854 | 949 |
Mutual Funds | 5,084 | 5,432 |
Total Assets | 6,938 | 6,381 |
Level 2 | Fair Value, Recurring | ||
Investments: | ||
Derivative Instruments | 5,532 | 6,214 |
Total Assets | 14,242 | 15,416 |
Liabilities: | ||
Derivative Instruments | 169 | |
Total Liabilities | 169 | |
Level 2 | Fair Value, Recurring | Corporate Debt Securities | ||
Investments: | ||
Debt Securities | 1,424 | 1,333 |
Level 2 | Fair Value, Recurring | Government-Backed and Government-Sponsored Enterprises’ Debt Securities | ||
Investments: | ||
Debt Securities | $ 7,286 | $ 7,869 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Fair Value of Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Carrying Amount | ||
Assets: | ||
Cash and Cash Equivalents | $ 72,987 | $ 1,537 |
Total Assets | 72,987 | 1,537 |
Liabilities: | ||
Short-Term Debt | 0 | 91,163 |
Long-Term Debt | 823,760 | 763,997 |
Total | 823,760 | 855,160 |
Fair Value | ||
Assets: | ||
Cash and Cash Equivalents | 72,987 | 1,537 |
Total Assets | 72,987 | 1,537 |
Liabilities: | ||
Short-Term Debt | 0 | 91,163 |
Long-Term Debt | 679,360 | 878,272 |
Total | $ 679,360 | $ 969,435 |
Uncategorized Items - ottr-2022
Label | Element | Value |
Capital Expenditures Incurred but Not yet Paid | us-gaap_CapitalExpendituresIncurredButNotYetPaid | $ 14,358,000 |
Capital Expenditures Incurred but Not yet Paid | us-gaap_CapitalExpendituresIncurredButNotYetPaid | $ 12,438,000 |