Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 27, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
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 $5.00 per share | |
Trading Symbol | OTTR | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 41,710,521 | |
Entity Central Index Key | 0001466593 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 |
CONSOLIDATED BALANCE SHEETS (un
CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current Assets | ||
Cash and Cash Equivalents | $ 189,214 | $ 118,996 |
Receivables, net of allowance for credit losses | 193,175 | 144,393 |
Inventories | 142,007 | 145,952 |
Regulatory Assets | 17,041 | 24,999 |
Other Current Assets | 15,313 | 18,412 |
Total Current Assets | 556,750 | 452,752 |
Noncurrent Assets | ||
Investments | 59,322 | 54,845 |
Property, Plant and Equipment, net of accumulated depreciation | 2,387,260 | 2,212,717 |
Regulatory Assets | 89,491 | 94,655 |
Intangible Assets, net of accumulated amortization | 7,118 | 7,943 |
Goodwill | 37,572 | 37,572 |
Other Noncurrent Assets | 49,956 | 41,177 |
Total Noncurrent Assets | 2,630,719 | 2,448,909 |
Total Assets | 3,187,469 | 2,901,661 |
Current Liabilities | ||
Short-Term Debt | 51,495 | 8,204 |
Accounts Payable | 103,118 | 104,400 |
Accrued Salaries and Wages | 32,227 | 32,327 |
Accrued Taxes | 50,495 | 19,340 |
Regulatory Liabilities | 32,285 | 17,300 |
Other Current Liabilities | 40,413 | 56,065 |
Total Current Liabilities | 310,033 | 237,636 |
Noncurrent Liabilities | ||
Pension Benefit Liability | 33,083 | 33,210 |
Other Postretirement Benefits Liability | 26,101 | 46,977 |
Regulatory Liabilities | 275,809 | 244,497 |
Deferred Income Taxes | 234,787 | 221,302 |
Deferred Tax Credits | 15,358 | 15,916 |
Other Noncurrent Liabilities | 65,371 | 60,985 |
Total Noncurrent Liabilities | 650,509 | 622,887 |
Commitments and Contingencies (Note 9) | ||
Capitalization | ||
Long-Term Debt | 823,998 | 823,821 |
Shareholders' Equity | ||
Common Shares: 50,000,000 shares authorized, $5 par value; 41,710,521 and 41,631,113 outstanding at September 30, 2023 and December 31, 2022 | 208,553 | 208,156 |
Additional Paid-In Capital | 426,358 | 423,034 |
Retained Earnings | 766,844 | 585,212 |
Accumulated Other Comprehensive Income | 1,174 | 915 |
Total Shareholders' Equity | 1,402,929 | 1,217,317 |
Total Capitalization | 2,226,927 | 2,041,138 |
Total Liabilities and Shareholders' Equity | $ 3,187,469 | $ 2,901,661 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (unaudited) (Parentheticals) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
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) | 41,710,521 | 41,631,113 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Operating Revenues | ||||
Total Operating Revenues | $ 358,056 | $ 383,856 | $ 1,034,853 | $ 1,158,800 |
Operating Expenses | ||||
Electric Production Fuel | 19,603 | 24,972 | 45,928 | 54,538 |
Electric Purchased Power | 10,895 | 19,913 | 57,932 | 64,604 |
Electric Operating and Maintenance Expenses | 43,534 | 39,799 | 134,604 | 126,460 |
Cost of Products Sold (excluding depreciation) | 118,303 | 139,361 | 351,330 | 443,586 |
Other Nonelectric Expenses | 15,863 | 16,524 | 51,433 | 50,981 |
Depreciation and Amortization | 24,548 | 22,716 | 72,636 | 69,829 |
Electric Property Taxes | 4,194 | 4,438 | 13,151 | 13,304 |
Total Operating Expenses | 236,940 | 267,723 | 727,014 | 823,302 |
Operating Income | 121,116 | 116,133 | 307,839 | 335,498 |
Other Income and (Expense) | ||||
Interest Expense | (9,175) | (9,259) | (28,285) | (27,198) |
Nonservice Components of Postretirement Benefits | 2,289 | 52 | 7,122 | 824 |
Other Income (Expense), net | 2,471 | (174) | 7,841 | (802) |
Income Before Income Taxes | 116,701 | 106,752 | 294,517 | 308,322 |
Income Tax Expense | 24,727 | 22,513 | 58,093 | 66,143 |
Net Income | $ 91,974 | $ 84,239 | $ 236,424 | $ 242,179 |
Weighted-Average Common Shares Outstanding: | ||||
Basic (in shares) | 41,680 | 41,600 | 41,663 | 41,582 |
Diluted (in shares) | 42,058 | 41,974 | 42,028 | 41,930 |
Earnings Per Share: | ||||
Basic (in dollars per share) | $ 2.21 | $ 2.02 | $ 5.67 | $ 5.82 |
Diluted (in dollars per share) | $ 2.19 | $ 2.01 | $ 5.63 | $ 5.78 |
Electric | ||||
Operating Revenues | ||||
Total Operating Revenues | $ 130,326 | $ 142,747 | $ 395,997 | $ 404,112 |
Product Sales | ||||
Operating Revenues | ||||
Total Operating Revenues | $ 227,730 | $ 241,109 | $ 638,856 | $ 754,688 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 91,974 | $ 84,239 | $ 236,424 | $ 242,179 |
Other Comprehensive Income (Loss): | ||||
Unrealized Gain (Loss) on Available-for-Sale Securities, net of tax (expense) benefit of $4, $46, $(1) and $127 | (17) | (171) | 2 | (476) |
Pension and Other Postretirement Benefits, net of tax expense of $108, $37, $90 and $8 | 310 | 106 | 257 | 22 |
Total Other Comprehensive Income (Loss) | 293 | (65) | 259 | (454) |
Total Comprehensive Income | $ 92,267 | $ 84,174 | $ 236,683 | $ 241,725 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Unrealized Gain (Loss) on Available-for-Sale Securities, tax (expense) benefit | $ 4 | $ 46 | $ (1) | $ 127 |
Pension and Other Postretirement Benefits, net of tax expense | $ (108) | $ (37) | $ (90) | $ (8) |
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 (in shares) at Dec. 31, 2021 | 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 Stock Purchase Plan, net of expenses | (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 (in shares) at Sep. 30, 2022 | 41,630,952 | ||||
Ending balance at Sep. 30, 2022 | 1,184,023 | $ 208,155 | 422,448 | 560,398 | (6,978) |
Beginning balance (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 Stock Purchase Plan, net of expenses | (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 (in shares) at Sep. 30, 2022 | 41,630,952 | ||||
Ending balance at Sep. 30, 2022 | $ 1,184,023 | $ 208,155 | 422,448 | 560,398 | (6,978) |
Beginning balance (in shares) at Dec. 31, 2022 | 41,631,113 | 41,631,113 | |||
Beginning balance at Dec. 31, 2022 | $ 1,217,317 | $ 208,156 | 423,034 | 585,212 | 915 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock Issued Under Share-Based Compensation Plans, net of shares withheld for employee taxes (in shares) | 79,408 | ||||
Stock Issued Under Share-Based Compensation Plans, net of shares withheld for employee taxes | (3,088) | $ 397 | (3,485) | ||
Stock Issued Under Stock Purchase Plan, net of expenses | (166) | (166) | |||
Net Income | 236,424 | 236,424 | |||
Other Comprehensive Income (Loss) | 259 | 259 | |||
Stock Compensation Expense | 6,975 | 6,975 | |||
Common Dividends | $ (54,792) | (54,792) | |||
Ending balance (in shares) at Sep. 30, 2023 | 41,710,521 | 41,710,521 | |||
Ending balance at Sep. 30, 2023 | $ 1,402,929 | $ 208,553 | 426,358 | 766,844 | 1,174 |
Beginning balance (in shares) at Jun. 30, 2023 | 41,710,521 | ||||
Beginning balance at Jun. 30, 2023 | 1,328,439 | $ 208,553 | 425,867 | 693,138 | 881 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 91,974 | 91,974 | |||
Other Comprehensive Income (Loss) | 293 | 293 | |||
Stock Compensation Expense | 491 | 491 | |||
Common Dividends | $ (18,268) | (18,268) | |||
Ending balance (in shares) at Sep. 30, 2023 | 41,710,521 | 41,710,521 | |||
Ending balance at Sep. 30, 2023 | $ 1,402,929 | $ 208,553 | $ 426,358 | $ 766,844 | $ 1,174 |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (unaudited) (Parentheticals) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||
Common Dividends (in dollars per share) | $ 0.4375 | $ 0.4125 | $ 1.3125 | $ 1.2375 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Operating Activities | ||
Net Income | $ 236,424 | $ 242,179 |
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | ||
Depreciation and Amortization | 72,636 | 69,829 |
Deferred Tax Credits | (558) | (558) |
Deferred Income Taxes | 10,800 | 23,648 |
Discretionary Contribution to Pension Plan | 0 | (20,000) |
Investment (Gains) Losses | (3,734) | 5,406 |
Stock Compensation Expense | 6,975 | 6,141 |
Other, Net | (164) | (867) |
Changes in Operating Assets and Liabilities: | ||
Receivables | (48,782) | (18,845) |
Inventories | 4,873 | 3,632 |
Regulatory Assets | 8,387 | 170 |
Other Assets | 3,899 | 1,789 |
Accounts Payable | (511) | (10,681) |
Accrued and Other Liabilities | 13,858 | (13,970) |
Regulatory Liabilities | 21,601 | (1,208) |
Pension and Other Postretirement Benefits | (7,209) | 1,308 |
Net Cash Provided by Operating Activities | 318,495 | 287,973 |
Investing Activities | ||
Capital Expenditures | (229,849) | (123,227) |
Proceeds from Disposal of Noncurrent Assets | 4,746 | 3,803 |
Cash Used for Investments and Other Assets | (6,915) | (8,132) |
Net Cash Used in Investing Activities | (232,018) | (127,556) |
Financing Activities | ||
Net Borrowings (Repayments) of Short-Term Debt | 43,292 | (91,163) |
Proceeds from Issuance of Long-Term Debt | 0 | 90,000 |
Payments for Retirement of Long-Term Debt | 0 | (30,000) |
Dividends Paid | (54,792) | (51,564) |
Payments for Shares Withheld for Employee Tax Obligations | (3,088) | (2,942) |
Other, net | (1,671) | (3,298) |
Net Cash Used in Financing Activities | (16,259) | (88,967) |
Net Change in Cash and Cash Equivalents | 70,218 | 71,450 |
Cash and Cash Equivalents at Beginning of Period | 118,996 | 1,537 |
Cash and Cash Equivalents at End of Period | 189,214 | 72,987 |
Supplemental Disclosure of Noncash Investing Activities | ||
Accrued Property, Plant and Equipment Additions | $ 13,154 | $ 12,438 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
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, 2022. Because of the seasonality of our businesses and other factors, the earnings for the three and nine months ended September 30, 2023 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 cash flows to maintain consistency and comparability between periods presented. Other, net operating cash flows previously reported for the nine months ended September 30, 2022, included $5.4 million of investment losses, which are presented separately in the current period, and excluded $0.9 million of allowance for equity funds used during construction, which were previously presented separately. The reclassifications had no impact on previously reported net cash provided by operating activities, net cash used in investing activities, net cash used in financing activities, or cash and cash equivalents. Concentration of Deposits and Investments The Company has financial instruments that potentially subject us to a concentration risk, including cash and cash equivalents held in deposit and money market accounts with various financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Corporation up to an insurance limit of $250,000. Currently, our cash and cash equivalents significantly exceed federally insured levels. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The classification of our business into three segments, Electric, Manufacturing, and Plastics is 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, 2023 and 2022 are as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2023 2022 2023 2022 Operating Revenue Electric $ 130,326 $ 142,747 $ 395,997 $ 404,112 Manufacturing 100,678 98,767 309,936 306,921 Plastics 127,052 142,342 328,920 447,767 Total $ 358,056 $ 383,856 $ 1,034,853 $ 1,158,800 Net Income (Loss) Electric $ 24,565 $ 24,847 $ 67,420 $ 62,938 Manufacturing 7,446 6,219 20,276 17,858 Plastics 59,162 55,982 148,240 170,788 Corporate 801 (2,809) 488 (9,405) Total $ 91,974 $ 84,239 $ 236,424 $ 242,179 The following provides the identifiable assets by segment and corporate assets as of September 30, 2023 and December 31, 2022: (in thousands) September 30, December 31, Identifiable Assets Electric $ 2,489,682 $ 2,351,961 Manufacturing 261,044 245,869 Plastics 186,833 126,318 Corporate 249,910 177,513 Total $ 3,187,469 $ 2,901,661 |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Presented below are our operating revenues from 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, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2023 2022 2023 2022 Operating Revenues Electric Segment Retail: Residential $ 33,483 $ 35,122 $ 104,433 $ 108,883 Retail: Commercial and Industrial 75,044 83,022 230,517 232,532 Retail: Other 1,972 2,033 5,717 6,004 Total Retail 110,499 120,177 340,667 347,419 Transmission 13,670 13,156 40,606 37,409 Wholesale 4,752 7,196 9,260 13,196 Other 1,405 2,218 5,464 6,088 Total Electric Segment 130,326 142,747 395,997 404,112 Manufacturing Segment Metal Parts and Tooling 89,518 84,054 268,981 261,923 Plastic Products and Tooling 8,847 12,723 33,059 36,584 Scrap Metal 2,313 1,990 7,896 8,414 Total Manufacturing Segment 100,678 98,767 309,936 306,921 Plastics Segment PVC Pipe 127,052 142,342 328,920 447,767 Total Operating Revenue 358,056 383,856 1,034,853 1,158,800 Less: Non-contract Revenues Included Above Electric Segment - ARP Revenues (744) (548) (2,289) (7,937) Total Operating Revenues from Contracts with Customers $ 358,800 $ 384,404 $ 1,037,142 $ 1,166,737 |
Select Balance Sheet Informatio
Select Balance Sheet Information | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 and December 31, 2022 are as follows: (in thousands) September 30, December 31, Receivables Trade $ 171,745 $ 112,126 Other 7,738 9,983 Unbilled Receivables 15,679 23,932 Total Receivables 195,162 146,041 Less: Allowance for Credit Losses 1,987 1,648 Receivables, net of allowance for credit losses $ 193,175 $ 144,393 The following is a summary of activity in the allowance for credit losses for the nine months ended September 30, 2023 and 2022: (in thousands) 2023 2022 Beginning Balance, January 1 $ 1,648 $ 1,836 Additions Charged to Expense 1,176 518 Reductions for Amounts Written Off, Net of Recoveries (837) (806) Ending Balance, September 30 $ 1,987 $ 1,548 Inventories Inventories consist of the following as of September 30, 2023 and December 31, 2022: (in thousands) September 30, December 31, Raw Material, Fuel and Supplies $ 72,657 $ 70,374 Work in Process 30,267 31,766 Finished Goods 39,083 43,812 Total Inventories $ 142,007 $ 145,952 Investments The following is a summary of our investments as of September 30, 2023 and December 31, 2022: (in thousands) September 30, December 31, Corporate-Owned Life Insurance Policies $ 39,794 $ 38,991 Corporate and Government Debt Securities 8,986 8,761 Money Market Funds 3,223 1,560 Mutual Funds 7,289 5,503 Other Investments 30 30 Total Investments $ 59,322 $ 54,845 The amount of unrealized gains and losses on debt securities as of September 30, 2023 and December 31, 2022 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, 2023 and December 31, 2022 was not material. Property, Plant and Equipment Major classes of property, plant and equipment as of September 30, 2023 and December 31, 2022 include: (in thousands) September 30, December 31, Electric Plant Electric Plant in Service $ 3,009,031 $ 2,844,379 Construction Work in Progress 129,810 113,932 Total Gross Electric Plant 3,138,841 2,958,311 Less Accumulated Depreciation and Amortization 889,136 859,988 Net Electric Plant 2,249,705 2,098,323 Nonelectric Property, Plant and Equipment Nonelectric Property, Plant and Equipment in Service 303,641 293,928 Construction Work in Progress 39,885 15,170 Total Gross Nonelectric Property, Plant and Equipment 343,526 309,098 Less Accumulated Depreciation and Amortization 205,971 194,704 Net Nonelectric Property, Plant and Equipment 137,555 114,394 Net Property, Plant and Equipment $ 2,387,260 $ 2,212,717 On January 3, 2023, we purchased the Ashtabula III wind farm, located in eastern North Dakota, which consists of 39 wind turbines and the related infrastructure, adding 62.4 megawatts of nameplate capacity to our owned generation assets. The total purchase price of the acquisition was $50.6 million. |
Regulatory Matters
Regulatory Matters | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 and December 31, 2022 and the period we expect to recover or refund such amounts: Period of September 30, 2023 December 31, 2022 (in thousands) Recovery/Refund Current Long-Term Current Long-Term Regulatory Assets Pension and Other Postretirement Benefit Plans 1 Various $ — $ 86,286 $ — $ 88,354 Alternative Revenue Program Riders 2 Up to 2 years 5,780 118 5,679 2,508 Asset Retirement Obligations 1 Asset lives — — — 1,467 Deferred Income Taxes Asset lives — 931 — — ISO Cost Recovery Trackers 1 Up to 2 years 144 260 575 314 Unrecovered Project Costs 1 Up to 4 years 349 962 320 990 Deferred Rate Case Expenses 1 Up to 3 years 377 471 377 754 Fuel Clause Adjustments 1 Up to 1 year 9,141 — 10,893 — Derivative Instruments 1 Up to 2 years 1,225 228 7,130 — Other 1 Various 25 235 25 268 Total Regulatory Assets $ 17,041 $ 89,491 $ 24,999 $ 94,655 Regulatory Liabilities Deferred Income Taxes Asset lives $ — $ 128,886 $ — $ 131,480 Plant Removal Obligations Asset lives 8,456 117,359 8,509 105,733 Fuel Clause Adjustments Up to 1 year 12,217 — 365 — Alternative Revenue Program Riders Up to 1 year 8,426 — 2,504 — North Dakota PTC Refunds Asset lives — 10,281 — 7,136 Pension and Other Postretirement Benefit Plans Various 2,279 19,026 5,589 — Other Various 907 257 333 148 Total Regulatory Liabilities $ 32,285 $ 275,809 $ 17,300 $ 244,497 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 Borrow
Short-Term and Long-Term Borrowings | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Short-Term and Long-Term Borrowings | Short-Term and Long-Term Borrowings The following is a summary of our outstanding short- and long-term borrowings by borrower, OTC or Otter Tail Power Company (OTP), as of September 30, 2023 and December 31, 2022: Short-Term Debt The following is a summary of our lines of credit as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, (in thousands) Borrowing Limit Amount Outstanding Letters Amount Available Amount Available OTC Credit Agreement $ 170,000 $ — $ — $ 170,000 $ 170,000 OTP Credit Agreement 170,000 51,495 9,573 108,932 152,223 Total $ 340,000 $ 51,495 $ 9,573 $ 278,932 $ 322,223 Long-Term Debt The following is a summary of outstanding long-term debt by borrower as of September 30, 2023 and December 31, 2022: (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 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 90,000 Total $ 827,000 $ 827,000 Less: Unamortized Long-Term Debt Issuance Costs 3,002 3,179 Total Long-Term Debt, Net of Unamortized Debt Issuance Costs $ 823,998 $ 823,821 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, 2023, OTC and OTP were in compliance with these financial covenants. |
Employee Postretirement Benefit
Employee Postretirement Benefits | 9 Months Ended |
Sep. 30, 2023 | |
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 table includes the components of net periodic benefit cost (income) related to our defined benefit pension plans and other postretirement benefits for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Pension Benefits (Pension Plan) Pension Benefits (ESSRP) Postretirement Benefits (in thousands) 2023 2022 2023 2022 2023 2022 Service Cost $ 925 $ 1,644 $ 18 $ 48 $ 152 $ 335 Interest Cost 4,109 3,086 472 335 668 510 Expected Return on Assets (6,479) (5,921) — — — — Amortization of Prior Service Cost — — — — (1,433) (1,433) Amortization of Net Actuarial Loss — 1,966 — 141 — 765 Net Periodic Benefit Cost (Income) $ (1,445) $ 775 $ 490 $ 524 $ (613) $ 177 Nine Months Ended September 30, Pension Benefits (Pension Plan) Pension Benefits (ESSRP) Postretirement Benefits (in thousands) 2023 2022 2023 2022 2023 2022 Service Cost $ 2,774 $ 4,932 $ 54 $ 146 $ 458 $ 1,004 Interest Cost 12,327 9,258 1,417 1,006 2,006 1,531 Expected Return on Assets (19,436) (17,763) — — — — Amortization of Prior Service Cost — — — — (4,300) (4,300) Amortization of Net Actuarial Loss — 5,899 — 425 — 2,297 Net Periodic Benefit Cost (Income) $ (4,335) $ 2,326 $ 1,471 $ 1,577 $ (1,836) $ 532 The following table includes the impact of regulation on the recognition of periodic benefit cost (income) arising from pension and other postretirement benefits for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2023 2022 2023 2022 Net Periodic Benefit Cost (Income) $ (1,568) $ 1,476 $ (4,700) $ 4,435 Net Amount Amortized Due to the Effect of Regulation 374 499 864 823 Net Periodic Benefit Cost (Income) Recognized $ (1,194) $ 1,975 $ (3,836) $ 5,258 We had no minimum funding requirements for our Pension Plan or any other postretirement benefit plans as of December 31, 2022. We did not make any contributions to our Pension Plan during the nine months ended September 30, 2023. We made a discretionary contribution to our Pension Plan of $20.0 million during the nine months ended September 30, 2022. In the third quarter of 2023, the Company amended its postretirement healthcare plan to eliminate, for Medicare-eligible participants, the employer-sponsored group waiver medical plan and instead allow participants to select an individual medical plan through a private marketplace exchange. The Company will provide these plan participants with an annual reimbursement to subsidize their medical premiums. The effect of the plan amendment reduced the Company’s projected benefit obligation by $20.1 million as of September 30, 2023. The reduced benefit obligation included a $2.6 million reduction attributable to an increase in the discount rate used to measure the plan liability, which was 6.06%, compared to 5.52% at December 31, 2022. Beginning in October 2023, the $17.5 million of savings attributable to the plan change will be recognized as a reduction to expense over 4.8 years, the expected remaining service period to retirement-age eligibility for active participants. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 and 2022 is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Income Taxes at Federal Statutory Rate $ 24,508 21.0 % $ 22,418 21.0 % $ 61,849 21.0 % $ 64,748 21.0 % Increases (Decreases) in Tax from: State Taxes on Income, Net of Federal Tax 5,832 5.0 5,338 5.0 14,725 5.0 15,416 5.0 Production Tax Credits (PTCs) (5,192) (4.4) (3,828) (3.6) (14,421) (4.9) (12,514) (4.1) Amortization of Excess Deferred Income Taxes (741) (0.6) (955) (0.9) (2,161) (0.7) (2,033) (0.7) North Dakota Wind Tax Credit Amortization, Net of Federal Tax (220) (0.2) (150) (0.1) (530) (0.2) (505) (0.2) Corporate-Owned Life Insurance (120) (0.1) 241 0.2 (998) (0.3) 1,383 0.4 Other, Net 660 0.5 (551) (0.5) (371) (0.2) (352) 0.1 Income Tax Expense / Effective Tax Rate $ 24,727 21.2 % $ 22,513 21.1 % $ 58,093 19.7 % $ 66,143 21.5 % |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments Land Easements. Since 2013, OTP had purchased the wind-generated electricity from the Ashtabula III wind farm pursuant to a power purchase agreement. That agreement granted us the option to purchase the wind farm and on January 3, 2023, we completed the purchase for $50.6 million. In connection with the purchase, we assumed 51 land easements, not classified as leases, which require annual payments. As of September 30, 2023, the remaining payments to be made under the easements total $4.0 million and the commitment to make payments extends into 2034. Contingencies FERC Return on Equity (ROE). In November 2013 and February 2015, customers filed complaints with the Federal Energy Regulatory Commission (FERC) seeking to reduce the return on equity 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 $2.7 million as of September 30, 2023. 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 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. Self-Funding of Transmission Upgrades. The FERC has granted transmission owners within MISO the unilateral authority to determine the funding mechanism for interconnection transmission upgrades that are necessary to accommodate new generation facilities connecting to the electrical grid. Under existing FERC orders, transmission owners can unilaterally determine whether the generator pays the transmission owner in advance for the transmission upgrade or, alternatively, the transmission owner can elect to fund the upgrade and recover over time from the generator the cost of and a return on the upgrade investment (a self-funding). FERC’s orders granting transmission owners this unilateral funding authority have been judicially contested on the basis that transmission owners may be motivated to discriminate among generators in making funding determinations. In the most recent judicial proceedings, the petitioners argued to the U.S. Court of Appeals for the District of Columbia that FERC did not comply with a previous judicial order to fully develop a record regarding the risk of discrimination and the financial risk absorbed by transmission owners for generator-funded upgrades. On December 2, 2022, the Court of Appeals ruled in favor of the petitioners remanding the matter to FERC, instructing the agency to adequately explain the basis of its orders. The Court of Appeals decision did not vacate transmission owners’ unilateral funding authority. OTP, as a transmission owner in MISO, has exercised its authority and elected to self-fund previous transmission upgrades necessary to accommodate new system generation. Under such an election, OTP is recovering the cost of the transmission upgrade and a return on that investment from the generator over a contractual period of time. Should FERC, on remand from the Court of Appeals, eliminate transmission owners’ unilateral funding authority on either a prospective or retrospective basis, our financial results would be impacted. We cannot at this time reasonably predict the outcome of this matter given the uncertainty as to how and when FERC may respond to the judicial remand. 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, 2023, other than those discussed above, will not be material. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2023 | |
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 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, 2023, we issued 81,374 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, 2023, there were 1,169,619 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 the 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, 2023, 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, 2023 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The following presents the changes in accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, 2023 2022 (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 $ 1,281 $ (400) $ 881 $ (6,621) $ (292) $ (6,913) Other Comprehensive Loss Before Reclassifications, net of tax (275) (17) (292) — (172) (172) Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) 585 (1) — (2) 585 106 (1) 1 (2) 107 Total Other Comprehensive Income (Loss) 310 (17) 293 106 (171) (65) Balance, End of Period $ 1,591 $ (417) $ 1,174 $ (6,515) $ (463) $ (6,978) Nine Months Ended September 30, 2023 2022 (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 $ 1,334 $ (419) $ 915 $ (6,537) $ 13 $ (6,524) Other Comprehensive Income (Loss) Before Reclassifications, net of tax (275) 1 (274) — (477) (477) Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) 532 (1) 1 (2) 533 22 (1) 1 (2) 23 Total Other Comprehensive Income (Loss) 257 2 259 22 (476) (454) Balance, End of Period $ 1,591 $ (417) $ 1,174 $ (6,515) $ (463) $ (6,978) (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, 2023 | |
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 $0.5 million and $0.6 million for the three months ended September 30, 2023 and 2022, and $7.0 million and $6.1 million for the nine months ended September 30, 2023 and 2022. Restricted Stock Awards. We grant restricted stock awards to members of our Board of Directors and restricted stock units to executive officers and other 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, 2023: Shares Weighted-Average Nonvested, January 1, 2023 141,551 $ 49.83 Granted 55,205 68.03 Vested (45,493) 50.02 Forfeited (2,350) 52.02 Nonvested, September 30, 2023 148,913 $ 56.48 The fair value of vested awards was $3.1 million and $3.0 million during the nine months ended September 30, 2023 and 2022. 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 number of common shares awarded on an accelerated vesting is based either on actual performance at the end of the performance period or the number of common shares earned at target. The grant date fair value of stock performance awards granted during the nine months ended September 30, 2023 and 2022 was determined using a Monte Carlo fair value simulation model incorporating the following assumptions: 2023 2022 Risk-free interest rate 4.15 % 1.52 % Expected term (in years) 3 3 Expected volatility 34.00 % 32.00 % Dividend yield 2.50 % 2.90 % 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 historical and future yield estimates. The following is a summary of stock performance award activity for the nine months ended September 30, 2023 (share amounts reflect awards at target): Shares Weighted-Average Nonvested, January 1, 2023 189,800 $ 45.95 Granted 59,400 61.97 Vested (55,000) 47.79 Forfeited — — Nonvested, September 30, 2023 194,200 $ 50.33 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per ShareThe 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, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2023 2022 2023 2022 Weighted-Average Common Shares Outstanding – Basic 41,680 41,600 41,663 41,582 Effect of Dilutive Securities: Stock Performance Awards 277 276 266 251 Restricted Stock Awards 100 97 97 96 Employee Stock Purchase Plan Shares 1 1 2 1 Dilutive Effect of Potential Common Shares 378 374 365 348 Weighted-Average Common Shares Outstanding – Diluted 42,058 41,974 42,028 41,930 The number 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, 2023 and 2022. |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative InstrumentsOTP enters into derivative instruments to manage its exposure to future market energy 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 market energy 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, 2023, OTP had multiple outstanding pay-fixed, receive-variable swap agreements with an aggregate notional amount of 195,400 megawatt-hours of electricity, with various settlement dates extending to December 31, 2024. As of September 30, 2023, the fair value of these derivative instruments was $1.5 million, of which $1.2 million is included in other current liabilities and $0.3 million is included in other noncurrent liabilities on the consolidated balance sheets. As of December 31, 2022, the fair value of these types of derivative contracts was $7.1 million, which is included in other current liabilities. There were no contracts which matured during the three months ended September 30, 2023 or 2022. During the nine months ended September 30, 2023 and 2022, contracts matured and were settled in an aggregate amount of a $16.0 million loss and a $2.8 million gain, respectively. Gains and losses recognized on the settlement of derivative instruments are recorded in electric purchased power in the consolidated statements of income. Such settlement gains and losses are returned to or recovered from our electric customers through fuel recovery mechanisms in each state. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 and December 31, 2022 classified by the input method used to measure fair value: (in thousands) Level 1 Level 2 Level 3 September 30, 2023 Assets: Investments: Money Market Funds $ 3,223 $ — $ — Mutual Funds 7,289 — — Corporate Debt Securities — 1,498 — Government-Backed and Government-Sponsored Enterprises’ Debt Securities — 7,488 — Total Assets $ 10,512 $ 8,986 $ — Liabilities: Derivative Instruments $ — $ 1,452 $ — Total Liabilities $ — $ 1,452 $ — December 31, 2022 Assets: Investments: Money Market Funds $ 1,560 $ — $ — Mutual Funds 5,503 — — Corporate Debt Securities — 1,434 — Government-Backed and Government-Sponsored Enterprises’ Debt Securities — 7,327 — Total Assets $ 7,063 $ 8,761 $ — Liabilities: Derivative Instruments — 7,130 — Total Liabilities $ — $ 7,130 $ — 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 based on 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, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 (in thousands) Carrying Fair Value Carrying Fair Value Assets: Cash and Cash Equivalents $ 189,214 $ 189,214 $ 118,996 $ 118,996 Total 189,214 189,214 118,996 118,996 Liabilities: Short-Term Debt 51,495 51,495 8,204 8,204 Long-Term Debt 823,998 661,986 823,821 681,615 Total $ 875,493 $ 713,481 $ 832,025 $ 689,819 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. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income | $ 91,974 | $ 84,239 | $ 236,424 | $ 242,179 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
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, 2022. Because of the seasonality of our businesses and other factors, the earnings for the three and nine months ended September 30, 2023 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 cash flows to maintain consistency and comparability between periods presented. Other, net operating cash flows previously reported for the nine months ended September 30, 2022, included $5.4 million of investment losses, which are presented separately in the current period, and excluded $0.9 million of allowance for equity funds used during construction, which were previously presented separately. The reclassifications had no impact on previously reported net cash provided by operating activities, net cash used in investing activities, net cash used in financing activities, or cash and cash equivalents. |
Concentration of Deposits and Investments | Concentration of Deposits and Investments The Company has financial instruments that potentially subject us to a concentration risk, including cash and cash equivalents held in deposit and money market accounts with various financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Corporation up to an insurance limit of $250,000. Currently, our cash and cash equivalents significantly exceed federally insured levels. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 and 2022 are as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2023 2022 2023 2022 Operating Revenue Electric $ 130,326 $ 142,747 $ 395,997 $ 404,112 Manufacturing 100,678 98,767 309,936 306,921 Plastics 127,052 142,342 328,920 447,767 Total $ 358,056 $ 383,856 $ 1,034,853 $ 1,158,800 Net Income (Loss) Electric $ 24,565 $ 24,847 $ 67,420 $ 62,938 Manufacturing 7,446 6,219 20,276 17,858 Plastics 59,162 55,982 148,240 170,788 Corporate 801 (2,809) 488 (9,405) Total $ 91,974 $ 84,239 $ 236,424 $ 242,179 The following provides the identifiable assets by segment and corporate assets as of September 30, 2023 and December 31, 2022: (in thousands) September 30, December 31, Identifiable Assets Electric $ 2,489,682 $ 2,351,961 Manufacturing 261,044 245,869 Plastics 186,833 126,318 Corporate 249,910 177,513 Total $ 3,187,469 $ 2,901,661 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | Presented below are our operating revenues from 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, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2023 2022 2023 2022 Operating Revenues Electric Segment Retail: Residential $ 33,483 $ 35,122 $ 104,433 $ 108,883 Retail: Commercial and Industrial 75,044 83,022 230,517 232,532 Retail: Other 1,972 2,033 5,717 6,004 Total Retail 110,499 120,177 340,667 347,419 Transmission 13,670 13,156 40,606 37,409 Wholesale 4,752 7,196 9,260 13,196 Other 1,405 2,218 5,464 6,088 Total Electric Segment 130,326 142,747 395,997 404,112 Manufacturing Segment Metal Parts and Tooling 89,518 84,054 268,981 261,923 Plastic Products and Tooling 8,847 12,723 33,059 36,584 Scrap Metal 2,313 1,990 7,896 8,414 Total Manufacturing Segment 100,678 98,767 309,936 306,921 Plastics Segment PVC Pipe 127,052 142,342 328,920 447,767 Total Operating Revenue 358,056 383,856 1,034,853 1,158,800 Less: Non-contract Revenues Included Above Electric Segment - ARP Revenues (744) (548) (2,289) (7,937) Total Operating Revenues from Contracts with Customers $ 358,800 $ 384,404 $ 1,037,142 $ 1,166,737 |
Select Balance Sheet Informat_2
Select Balance Sheet Information (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Receivables | Receivables as of September 30, 2023 and December 31, 2022 are as follows: (in thousands) September 30, December 31, Receivables Trade $ 171,745 $ 112,126 Other 7,738 9,983 Unbilled Receivables 15,679 23,932 Total Receivables 195,162 146,041 Less: Allowance for Credit Losses 1,987 1,648 Receivables, net of allowance for credit losses $ 193,175 $ 144,393 |
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, 2023 and 2022: (in thousands) 2023 2022 Beginning Balance, January 1 $ 1,648 $ 1,836 Additions Charged to Expense 1,176 518 Reductions for Amounts Written Off, Net of Recoveries (837) (806) Ending Balance, September 30 $ 1,987 $ 1,548 |
Schedule of Inventories | Inventories consist of the following as of September 30, 2023 and December 31, 2022: (in thousands) September 30, December 31, Raw Material, Fuel and Supplies $ 72,657 $ 70,374 Work in Process 30,267 31,766 Finished Goods 39,083 43,812 Total Inventories $ 142,007 $ 145,952 |
Schedule of Investments | The following is a summary of our investments as of September 30, 2023 and December 31, 2022: (in thousands) September 30, December 31, Corporate-Owned Life Insurance Policies $ 39,794 $ 38,991 Corporate and Government Debt Securities 8,986 8,761 Money Market Funds 3,223 1,560 Mutual Funds 7,289 5,503 Other Investments 30 30 Total Investments $ 59,322 $ 54,845 |
Schedule of Property, Plant and Equipment | Major classes of property, plant and equipment as of September 30, 2023 and December 31, 2022 include: (in thousands) September 30, December 31, Electric Plant Electric Plant in Service $ 3,009,031 $ 2,844,379 Construction Work in Progress 129,810 113,932 Total Gross Electric Plant 3,138,841 2,958,311 Less Accumulated Depreciation and Amortization 889,136 859,988 Net Electric Plant 2,249,705 2,098,323 Nonelectric Property, Plant and Equipment Nonelectric Property, Plant and Equipment in Service 303,641 293,928 Construction Work in Progress 39,885 15,170 Total Gross Nonelectric Property, Plant and Equipment 343,526 309,098 Less Accumulated Depreciation and Amortization 205,971 194,704 Net Nonelectric Property, Plant and Equipment 137,555 114,394 Net Property, Plant and Equipment $ 2,387,260 $ 2,212,717 |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 and December 31, 2022 and the period we expect to recover or refund such amounts: Period of September 30, 2023 December 31, 2022 (in thousands) Recovery/Refund Current Long-Term Current Long-Term Regulatory Assets Pension and Other Postretirement Benefit Plans 1 Various $ — $ 86,286 $ — $ 88,354 Alternative Revenue Program Riders 2 Up to 2 years 5,780 118 5,679 2,508 Asset Retirement Obligations 1 Asset lives — — — 1,467 Deferred Income Taxes Asset lives — 931 — — ISO Cost Recovery Trackers 1 Up to 2 years 144 260 575 314 Unrecovered Project Costs 1 Up to 4 years 349 962 320 990 Deferred Rate Case Expenses 1 Up to 3 years 377 471 377 754 Fuel Clause Adjustments 1 Up to 1 year 9,141 — 10,893 — Derivative Instruments 1 Up to 2 years 1,225 228 7,130 — Other 1 Various 25 235 25 268 Total Regulatory Assets $ 17,041 $ 89,491 $ 24,999 $ 94,655 Regulatory Liabilities Deferred Income Taxes Asset lives $ — $ 128,886 $ — $ 131,480 Plant Removal Obligations Asset lives 8,456 117,359 8,509 105,733 Fuel Clause Adjustments Up to 1 year 12,217 — 365 — Alternative Revenue Program Riders Up to 1 year 8,426 — 2,504 — North Dakota PTC Refunds Asset lives — 10,281 — 7,136 Pension and Other Postretirement Benefit Plans Various 2,279 19,026 5,589 — Other Various 907 257 333 148 Total Regulatory Liabilities $ 32,285 $ 275,809 $ 17,300 $ 244,497 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, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Line of Credit Facilities | The following is a summary of our lines of credit as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, (in thousands) Borrowing Limit Amount Outstanding Letters Amount Available Amount Available OTC Credit Agreement $ 170,000 $ — $ — $ 170,000 $ 170,000 OTP Credit Agreement 170,000 51,495 9,573 108,932 152,223 Total $ 340,000 $ 51,495 $ 9,573 $ 278,932 $ 322,223 |
Schedule of Debt | The following is a summary of outstanding long-term debt by borrower as of September 30, 2023 and December 31, 2022: (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 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 90,000 Total $ 827,000 $ 827,000 Less: Unamortized Long-Term Debt Issuance Costs 3,002 3,179 Total Long-Term Debt, Net of Unamortized Debt Issuance Costs $ 823,998 $ 823,821 |
Employee Postretirement Benef_2
Employee Postretirement Benefits (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Retirement Benefits [Abstract] | |
Schedule of Net Periodic Benefit Cost (Income) | The following table includes the components of net periodic benefit cost (income) related to our defined benefit pension plans and other postretirement benefits for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Pension Benefits (Pension Plan) Pension Benefits (ESSRP) Postretirement Benefits (in thousands) 2023 2022 2023 2022 2023 2022 Service Cost $ 925 $ 1,644 $ 18 $ 48 $ 152 $ 335 Interest Cost 4,109 3,086 472 335 668 510 Expected Return on Assets (6,479) (5,921) — — — — Amortization of Prior Service Cost — — — — (1,433) (1,433) Amortization of Net Actuarial Loss — 1,966 — 141 — 765 Net Periodic Benefit Cost (Income) $ (1,445) $ 775 $ 490 $ 524 $ (613) $ 177 Nine Months Ended September 30, Pension Benefits (Pension Plan) Pension Benefits (ESSRP) Postretirement Benefits (in thousands) 2023 2022 2023 2022 2023 2022 Service Cost $ 2,774 $ 4,932 $ 54 $ 146 $ 458 $ 1,004 Interest Cost 12,327 9,258 1,417 1,006 2,006 1,531 Expected Return on Assets (19,436) (17,763) — — — — Amortization of Prior Service Cost — — — — (4,300) (4,300) Amortization of Net Actuarial Loss — 5,899 — 425 — 2,297 Net Periodic Benefit Cost (Income) $ (4,335) $ 2,326 $ 1,471 $ 1,577 $ (1,836) $ 532 The following table includes the impact of regulation on the recognition of periodic benefit cost (income) arising from pension and other postretirement benefits for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2023 2022 2023 2022 Net Periodic Benefit Cost (Income) $ (1,568) $ 1,476 $ (4,700) $ 4,435 Net Amount Amortized Due to the Effect of Regulation 374 499 864 823 Net Periodic Benefit Cost (Income) Recognized $ (1,194) $ 1,975 $ (3,836) $ 5,258 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 and 2022 is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Income Taxes at Federal Statutory Rate $ 24,508 21.0 % $ 22,418 21.0 % $ 61,849 21.0 % $ 64,748 21.0 % Increases (Decreases) in Tax from: State Taxes on Income, Net of Federal Tax 5,832 5.0 5,338 5.0 14,725 5.0 15,416 5.0 Production Tax Credits (PTCs) (5,192) (4.4) (3,828) (3.6) (14,421) (4.9) (12,514) (4.1) Amortization of Excess Deferred Income Taxes (741) (0.6) (955) (0.9) (2,161) (0.7) (2,033) (0.7) North Dakota Wind Tax Credit Amortization, Net of Federal Tax (220) (0.2) (150) (0.1) (530) (0.2) (505) (0.2) Corporate-Owned Life Insurance (120) (0.1) 241 0.2 (998) (0.3) 1,383 0.4 Other, Net 660 0.5 (551) (0.5) (371) (0.2) (352) 0.1 Income Tax Expense / Effective Tax Rate $ 24,727 21.2 % $ 22,513 21.1 % $ 58,093 19.7 % $ 66,143 21.5 % |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Income (Loss) | The following presents the changes in accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, 2023 2022 (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 $ 1,281 $ (400) $ 881 $ (6,621) $ (292) $ (6,913) Other Comprehensive Loss Before Reclassifications, net of tax (275) (17) (292) — (172) (172) Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) 585 (1) — (2) 585 106 (1) 1 (2) 107 Total Other Comprehensive Income (Loss) 310 (17) 293 106 (171) (65) Balance, End of Period $ 1,591 $ (417) $ 1,174 $ (6,515) $ (463) $ (6,978) Nine Months Ended September 30, 2023 2022 (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 $ 1,334 $ (419) $ 915 $ (6,537) $ 13 $ (6,524) Other Comprehensive Income (Loss) Before Reclassifications, net of tax (275) 1 (274) — (477) (477) Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) 532 (1) 1 (2) 533 22 (1) 1 (2) 23 Total Other Comprehensive Income (Loss) 257 2 259 22 (476) (454) Balance, End of Period $ 1,591 $ (417) $ 1,174 $ (6,515) $ (463) $ (6,978) (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, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Nonvested Restricted Stock Shares Activity | The following is a summary of stock award activity for the nine months ended September 30, 2023: Shares Weighted-Average Nonvested, January 1, 2023 141,551 $ 49.83 Granted 55,205 68.03 Vested (45,493) 50.02 Forfeited (2,350) 52.02 Nonvested, September 30, 2023 148,913 $ 56.48 |
Schedule of Share-Based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions | The grant date fair value of stock performance awards granted during the nine months ended September 30, 2023 and 2022 was determined using a Monte Carlo fair value simulation model incorporating the following assumptions: 2023 2022 Risk-free interest rate 4.15 % 1.52 % Expected term (in years) 3 3 Expected volatility 34.00 % 32.00 % Dividend yield 2.50 % 2.90 % |
Schedule of Share-based Compensation Arrangements by Share-based Payment Award | The following is a summary of stock performance award activity for the nine months ended September 30, 2023 (share amounts reflect awards at target): Shares Weighted-Average Nonvested, January 1, 2023 189,800 $ 45.95 Granted 59,400 61.97 Vested (55,000) 47.79 Forfeited — — Nonvested, September 30, 2023 194,200 $ 50.33 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2023 2022 2023 2022 Weighted-Average Common Shares Outstanding – Basic 41,680 41,600 41,663 41,582 Effect of Dilutive Securities: Stock Performance Awards 277 276 266 251 Restricted Stock Awards 100 97 97 96 Employee Stock Purchase Plan Shares 1 1 2 1 Dilutive Effect of Potential Common Shares 378 374 365 348 Weighted-Average Common Shares Outstanding – Diluted 42,058 41,974 42,028 41,930 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 and December 31, 2022 classified by the input method used to measure fair value: (in thousands) Level 1 Level 2 Level 3 September 30, 2023 Assets: Investments: Money Market Funds $ 3,223 $ — $ — Mutual Funds 7,289 — — Corporate Debt Securities — 1,498 — Government-Backed and Government-Sponsored Enterprises’ Debt Securities — 7,488 — Total Assets $ 10,512 $ 8,986 $ — Liabilities: Derivative Instruments $ — $ 1,452 $ — Total Liabilities $ — $ 1,452 $ — December 31, 2022 Assets: Investments: Money Market Funds $ 1,560 $ — $ — Mutual Funds 5,503 — — Corporate Debt Securities — 1,434 — Government-Backed and Government-Sponsored Enterprises’ Debt Securities — 7,327 — Total Assets $ 7,063 $ 8,761 $ — Liabilities: Derivative Instruments — 7,130 — Total Liabilities $ — $ 7,130 $ — |
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, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 (in thousands) Carrying Fair Value Carrying Fair Value Assets: Cash and Cash Equivalents $ 189,214 $ 189,214 $ 118,996 $ 118,996 Total 189,214 189,214 118,996 118,996 Liabilities: Short-Term Debt 51,495 51,495 8,204 8,204 Long-Term Debt 823,998 661,986 823,821 681,615 Total $ 875,493 $ 713,481 $ 832,025 $ 689,819 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 USD ($) segment | Sep. 30, 2022 USD ($) | |
Accounting Policies [Abstract] | ||
Number of operating segments | segment | 3 | |
Number of reportable segments | segment | 3 | |
Investment losses | $ | $ (3,734) | $ 5,406 |
Allowance for equity funds used during construction | $ | $ 900 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 9 Months Ended |
Sep. 30, 2023 segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 3 |
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, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | |||||
Total Operating Revenues | $ 358,056 | $ 383,856 | $ 1,034,853 | $ 1,158,800 | |
Net Income (Loss) | 91,974 | 84,239 | 236,424 | 242,179 | |
Identifiable Assets | 3,187,469 | 3,187,469 | $ 2,901,661 | ||
Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Net Income (Loss) | 801 | (2,809) | 488 | (9,405) | |
Identifiable Assets | 249,910 | 249,910 | 177,513 | ||
Electric | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Total Operating Revenues | 130,326 | 142,747 | 395,997 | 404,112 | |
Net Income (Loss) | 24,565 | 24,847 | 67,420 | 62,938 | |
Identifiable Assets | 2,489,682 | 2,489,682 | 2,351,961 | ||
Manufacturing | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Total Operating Revenues | 100,678 | 98,767 | 309,936 | 306,921 | |
Net Income (Loss) | 7,446 | 6,219 | 20,276 | 17,858 | |
Identifiable Assets | 261,044 | 261,044 | 245,869 | ||
Plastics | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Total Operating Revenues | 127,052 | 142,342 | 328,920 | 447,767 | |
Net Income (Loss) | 59,162 | $ 55,982 | 148,240 | $ 170,788 | |
Identifiable Assets | $ 186,833 | $ 186,833 | $ 126,318 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | $ 358,056 | $ 383,856 | $ 1,034,853 | $ 1,158,800 |
Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues from Contracts with Customers | 358,800 | 384,404 | 1,037,142 | 1,166,737 |
Operating Segments | Electric | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | 130,326 | 142,747 | 395,997 | 404,112 |
Electric Segment - ARP Revenues | (744) | (548) | (2,289) | (7,937) |
Operating Segments | Manufacturing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | 100,678 | 98,767 | 309,936 | 306,921 |
Operating Segments | Plastics | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | 127,052 | 142,342 | 328,920 | 447,767 |
Operating Segments | Total Retail | Electric | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | 110,499 | 120,177 | 340,667 | 347,419 |
Operating Segments | Retail: Residential | Electric | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | 33,483 | 35,122 | 104,433 | 108,883 |
Operating Segments | Retail: Commercial and Industrial | Electric | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | 75,044 | 83,022 | 230,517 | 232,532 |
Operating Segments | Retail: Other | Electric | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | 1,972 | 2,033 | 5,717 | 6,004 |
Operating Segments | Transmission | Electric | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | 13,670 | 13,156 | 40,606 | 37,409 |
Operating Segments | Wholesale | Electric | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | 4,752 | 7,196 | 9,260 | 13,196 |
Operating Segments | Other | Electric | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | 1,405 | 2,218 | 5,464 | 6,088 |
Operating Segments | Metal Parts and Tooling | Manufacturing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | 89,518 | 84,054 | 268,981 | 261,923 |
Operating Segments | Plastic Products and Tooling | Manufacturing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | 8,847 | 12,723 | 33,059 | 36,584 |
Operating Segments | Scrap Metal | Manufacturing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Operating Revenues | $ 2,313 | $ 1,990 | $ 7,896 | $ 8,414 |
Select Balance Sheet Informat_3
Select Balance Sheet Information - Schedule of Receivables (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Trade | $ 171,745 | $ 112,126 | ||
Other | 7,738 | 9,983 | ||
Unbilled Receivables | 15,679 | 23,932 | ||
Total Receivables | 195,162 | 146,041 | ||
Less: Allowance for Credit Losses | 1,987 | 1,648 | $ 1,548 | $ 1,836 |
Receivables, net of allowance for credit losses | $ 193,175 | $ 144,393 |
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, 2023 | Sep. 30, 2022 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning Balance, January 1 | $ 1,648 | $ 1,836 |
Additions Charged to Expense | 1,176 | 518 |
Reductions for Amounts Written Off, Net of Recoveries | (837) | (806) |
Ending Balance, September 30 | $ 1,987 | $ 1,548 |
Select Balance Sheet Informat_5
Select Balance Sheet Information - Schedule of Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw Material, Fuel and Supplies | $ 72,657 | $ 70,374 |
Work in Process | 30,267 | 31,766 |
Finished Goods | 39,083 | 43,812 |
Total Inventories | $ 142,007 | $ 145,952 |
Select Balance Sheet Informat_6
Select Balance Sheet Information - Schedule of Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Corporate-Owned Life Insurance Policies | $ 39,794 | $ 38,991 |
Corporate and Government Debt Securities | 8,986 | 8,761 |
Money Market Funds | 3,223 | 1,560 |
Mutual Funds | 7,289 | 5,503 |
Other Investments | 30 | 30 |
Total Investments | $ 59,322 | $ 54,845 |
Select Balance Sheet Informat_7
Select Balance Sheet Information - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, net of accumulated depreciation | $ 2,387,260 | $ 2,212,717 |
Electric Plant | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 3,138,841 | 2,958,311 |
Less Accumulated Depreciation and Amortization | 889,136 | 859,988 |
Property, Plant and Equipment, net of accumulated depreciation | 2,249,705 | 2,098,323 |
Nonelectric Property, Plant and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 343,526 | 309,098 |
Less Accumulated Depreciation and Amortization | 205,971 | 194,704 |
Property, Plant and Equipment, net of accumulated depreciation | 137,555 | 114,394 |
Electric Plant in Service | Electric Plant | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 3,009,031 | 2,844,379 |
Construction Work in Progress | Electric Plant | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 129,810 | 113,932 |
Construction Work in Progress | Nonelectric Property, Plant and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 39,885 | 15,170 |
Nonelectric Property, Plant and Equipment in Service | Nonelectric Property, Plant and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 303,641 | $ 293,928 |
Select Balance Sheet Informat_8
Select Balance Sheet Information - Narrative (Details) - Ashtabula III Wind Farm $ in Millions | Jan. 03, 2023 USD ($) MWh windTurbine |
Business Acquisition [Line Items] | |
Number of wind turbines | windTurbine | 39 |
Wind farm, megawatts | MWh | 62.4 |
Purchase price | $ | $ 50.6 |
Regulatory Matters - Schedule o
Regulatory Matters - Schedule of Regulatory Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory assets - current | $ 17,041 | $ 24,999 |
Regulatory assets, long-term | 89,491 | 94,655 |
Regulatory liabilities, current | 32,285 | 17,300 |
Regulatory liabilities, long -term | 275,809 | 244,497 |
Deferred Income Taxes | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory liabilities, current | 0 | 0 |
Regulatory liabilities, long -term | 128,886 | 131,480 |
Plant Removal Obligations | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory liabilities, current | 8,456 | 8,509 |
Regulatory liabilities, long -term | 117,359 | 105,733 |
Fuel Clause Adjustments | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory liabilities, current | 12,217 | 365 |
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 | $ 8,426 | 2,504 |
Regulatory liabilities, long -term | $ 0 | 0 |
Regulatory liabilities - Remaining Recovery/Refund Period | 1 year | |
North Dakota PTC Refunds | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory liabilities, current | $ 0 | 0 |
Regulatory liabilities, long -term | 10,281 | 7,136 |
Pension and Other Postretirement Benefit Plans | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory liabilities, current | 2,279 | 5,589 |
Regulatory liabilities, long -term | 19,026 | 0 |
Other | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory liabilities, current | 907 | 333 |
Regulatory liabilities, long -term | 257 | 148 |
Pension and Other Postretirement Benefit Plans | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory assets - current | 0 | 0 |
Regulatory assets, long-term | 86,286 | 88,354 |
Alternative Revenue Program Riders | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory assets - current | 5,780 | 5,679 |
Regulatory assets, long-term | $ 118 | 2,508 |
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 | 0 | 1,467 |
Deferred Income Taxes | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory assets - current | 0 | 0 |
Regulatory assets, long-term | 931 | 0 |
ISO Cost Recovery Trackers | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory assets - current | 144 | 575 |
Regulatory assets, long-term | $ 260 | 314 |
Regulatory assets - Remaining Recovery/Refund Period | 2 years | |
Unrecovered Project Costs | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory assets - current | $ 349 | 320 |
Regulatory assets, long-term | $ 962 | 990 |
Regulatory assets - Remaining Recovery/Refund Period | 4 years | |
Deferred Rate Case Expenses | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory assets - current | $ 377 | 377 |
Regulatory assets, long-term | $ 471 | 754 |
Regulatory assets - Remaining Recovery/Refund Period | 3 years | |
Fuel Clause Adjustments | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory assets - current | $ 9,141 | 10,893 |
Regulatory assets, long-term | $ 0 | 0 |
Regulatory assets - Remaining Recovery/Refund Period | 1 year | |
Derivative Instruments | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory assets - current | $ 1,225 | 7,130 |
Regulatory assets, long-term | $ 228 | 0 |
Regulatory assets - Remaining Recovery/Refund Period | 2 years | |
Other | ||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||
Regulatory assets - current | $ 25 | 25 |
Regulatory assets, long-term | $ 235 | $ 268 |
Short-Term and Long-Term Borr_3
Short-Term and Long-Term Borrowings - Lines of Credit (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Line of Credit Facility [Line Items] | ||
Borrowing Limit | $ 340,000,000 | |
Amount Outstanding | 51,495,000 | $ 8,204,000 |
Letters of Credit | 9,573,000 | |
Amount Available | 278,932,000 | 322,223,000 |
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 | 170,000,000 |
OTP Credit Agreement | ||
Line of Credit Facility [Line Items] | ||
Borrowing Limit | 170,000,000 | |
Amount Outstanding | 51,495,000 | |
Letters of Credit | 9,573,000 | |
Amount Available | $ 108,932,000 | $ 152,223,000 |
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, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 827,000 | $ 827,000 |
Less: Unamortized Long-Term Debt Issuance Costs | 3,002 | 3,179 |
Total Long-Term Debt, Net of Unamortized Debt Issuance Costs | $ 823,998 | 823,821 |
Guaranteed Senior Notes | ||
Debt Instrument [Line Items] | ||
Rate | 3.55% | |
Long-term debt | $ 80,000 | 80,000 |
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 | $ 90,000 |
Short-Term and Long-Term Borr_5
Short-Term and Long-Term Borrowings - Narrative (Details) | Sep. 30, 2023 |
Maximum | |
Debt Instrument [Line Items] | |
Debt to total capitalization ratio | 60% |
Minimum | |
Debt Instrument [Line Items] | |
Interest and dividend coverage ratio | 1.50 |
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, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Net Periodic Benefit Cost (Income) | $ (1,568) | $ 1,476 | $ (4,700) | $ 4,435 |
Pension Benefits (Pension Plan) | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service Cost | 925 | 1,644 | 2,774 | 4,932 |
Interest Cost | 4,109 | 3,086 | 12,327 | 9,258 |
Expected Return on Assets | (6,479) | (5,921) | (19,436) | (17,763) |
Amortization of Prior Service Cost | 0 | 0 | 0 | 0 |
Amortization of Net Actuarial Loss | 0 | 1,966 | 0 | 5,899 |
Net Periodic Benefit Cost (Income) | (1,445) | 775 | (4,335) | 2,326 |
Pension Benefits (ESSRP) | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service Cost | 18 | 48 | 54 | 146 |
Interest Cost | 472 | 335 | 1,417 | 1,006 |
Expected Return on Assets | 0 | 0 | 0 | 0 |
Amortization of Prior Service Cost | 0 | 0 | 0 | 0 |
Amortization of Net Actuarial Loss | 0 | 141 | 0 | 425 |
Net Periodic Benefit Cost (Income) | 490 | 524 | 1,471 | 1,577 |
Postretirement Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service Cost | 152 | 335 | 458 | 1,004 |
Interest Cost | 668 | 510 | 2,006 | 1,531 |
Expected Return on Assets | 0 | 0 | 0 | 0 |
Amortization of Prior Service Cost | (1,433) | (1,433) | (4,300) | (4,300) |
Amortization of Net Actuarial Loss | 0 | 765 | 0 | 2,297 |
Net Periodic Benefit Cost (Income) | $ (613) | $ 177 | $ (1,836) | $ 532 |
Employee Postretirement Benef_4
Employee Postretirement Benefits - Composition of Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Retirement Benefits [Abstract] | ||||
Net Periodic Benefit Cost (Income) | $ (1,568) | $ 1,476 | $ (4,700) | $ 4,435 |
Net Amount Amortized Due to the Effect of Regulation | 374 | 499 | 864 | 823 |
Net Periodic Benefit Cost (Income) Recognized | $ (1,194) | $ 1,975 | $ (3,836) | $ 5,258 |
Employee Postretirement Benef_5
Employee Postretirement Benefits - Narrative (Details) - Pension Plan - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2023 | Sep. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Oct. 01, 2023 | Dec. 31, 2022 | |
Defined Benefit Plan Disclosure [Line Items] | ||||||
Contributions by employer | $ 0 | $ 20,000,000 | ||||
Reduction from plan amendment | $ (20,100,000) | |||||
Reduction attributable to increase in discount rate to measurement plan liability | $ 2,600,000 | |||||
Discount rate (as a percent) | 6.06% | 6.06% | 5.52% | |||
Subsequent Event | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Savings attributable to the plan change | $ 17,500,000 | |||||
Expected remaining service period (in years) | 4 years 9 months 18 days |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Rate (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income Taxes at Federal Statutory Rate | $ 24,508 | $ 22,418 | $ 61,849 | $ 64,748 |
Income Taxes at Federal Statutory Rate | 21% | 21% | 21% | 21% |
Increases (Decreases) in Tax from: | ||||
State Taxes on Income, Net of Federal Tax | $ 5,832 | $ 5,338 | $ 14,725 | $ 15,416 |
Production Tax Credits (PTCs) | (5,192) | (3,828) | (14,421) | (12,514) |
Amortization of Excess Deferred Income Taxes | (741) | (955) | (2,161) | (2,033) |
North Dakota Wind Tax Credit Amortization, Net of Federal Tax | (220) | (150) | (530) | (505) |
Corporate-Owned Life Insurance | (120) | 241 | (998) | 1,383 |
Other, Net | 660 | (551) | (371) | (352) |
Income Tax Expense / Effective Tax Rate | $ 24,727 | $ 22,513 | $ 58,093 | $ 66,143 |
Increases (Decreases) in Tax from: | ||||
State Taxes on Income, Net of Federal Tax | 5% | 5% | 5% | 5% |
Production Tax Credits (PTCs) | (4.40%) | (3.60%) | (4.90%) | (4.10%) |
Amortization of Excess Deferred Income Taxes | (0.60%) | (0.90%) | (0.70%) | (0.70%) |
North Dakota Wind Tax Credit Amortization, Net of Federal Tax | (0.20%) | (0.10%) | (0.20%) | (0.20%) |
Corporate-Owned Life Insurance | (0.10%) | 0.20% | (0.30%) | 0.40% |
Other, Net | 0.50% | (0.50%) | (0.20%) | 0.10% |
Income Tax Expense / Effective Tax Rate | 21.20% | 21.10% | 19.70% | 21.50% |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Jan. 03, 2023 USD ($) landEasement | Sep. 30, 2023 USD ($) |
Ashtabula III Wind Farm | ||
Other Commitments [Line Items] | ||
Purchase price | $ 50.6 | |
Otter Tail Power Company | Federal Energy Regulatory Commission | ||
Other Commitments [Line Items] | ||
Estimated liability of refund obligation | $ 2.7 | |
Otter Tail Power Company | Ashtabula III Wind Farm | ||
Other Commitments [Line Items] | ||
Purchase price | $ 50.6 | |
Otter Tail Power Company | Ashtabula III Wind Farm | Land Easement Payments | ||
Other Commitments [Line Items] | ||
Number of land easements | landEasement | 51 | |
Remaining payments under easements | $ 4 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Aug. 29, 2023 | May 03, 2021 | Sep. 30, 2023 | Dec. 31, 2022 | |
Class of Stock [Line Items] | ||||
Total capitalization | $ 2,226,927 | $ 2,041,138 | ||
Otter Tail Power Company | ||||
Class of Stock [Line Items] | ||||
Equity to total capitalization ratio | 55% | |||
Net assets restricted from distribution | $ 743,500 | |||
Minimum | Otter Tail Power Company | Minnesota Public Utilities Commission | ||||
Class of Stock [Line Items] | ||||
Public utilities, requested equity capital structure, percentage | 48.30% | |||
Maximum | Otter Tail Power Company | ||||
Class of Stock [Line Items] | ||||
Total capitalization | $ 2,000,000 | |||
Maximum | Otter Tail Power Company | Minnesota Public Utilities Commission | ||||
Class of Stock [Line Items] | ||||
Public utilities, requested equity capital structure, percentage | 59.10% | |||
Second Shelf Registration | ||||
Class of Stock [Line Items] | ||||
Shelf registration (in shares) | 1,500,000 | |||
Number of shares issued (in shares) | 81,374 | |||
Number of shares available for grant (in shares) | 1,169,619 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 1,328,439 | $ 1,116,543 | $ 1,217,317 | $ 990,777 |
Other Comprehensive Income (Loss) Before Reclassifications, net of tax | (292) | (172) | (274) | (477) |
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) | 585 | 107 | 533 | 23 |
Total Other Comprehensive Income (Loss) | 293 | (65) | 259 | (454) |
Ending balance | 1,402,929 | 1,184,023 | 1,402,929 | 1,184,023 |
Pension and Other Postretirement Benefits | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 1,281 | (6,621) | 1,334 | (6,537) |
Other Comprehensive Income (Loss) Before Reclassifications, net of tax | (275) | 0 | (275) | 0 |
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) | 585 | 106 | 532 | 22 |
Total Other Comprehensive Income (Loss) | 310 | 106 | 257 | 22 |
Ending balance | 1,591 | (6,515) | 1,591 | (6,515) |
Net Unrealized Gains (Losses) on Available-for-Sale Securities | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (400) | (292) | (419) | 13 |
Other Comprehensive Income (Loss) Before Reclassifications, net of tax | (17) | (172) | 1 | (477) |
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) | 0 | 1 | 1 | 1 |
Total Other Comprehensive Income (Loss) | (17) | (171) | 2 | (476) |
Ending balance | (417) | (463) | (417) | (463) |
Accumulated Other Comprehensive Income (Loss) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 881 | (6,913) | 915 | (6,524) |
Total Other Comprehensive Income (Loss) | 293 | (65) | 259 | (454) |
Ending balance | $ 1,174 | $ (6,978) | $ 1,174 | $ (6,978) |
Share-Based Payments - Narrativ
Share-Based Payments - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based payment arrangement, expense | $ 0.5 | $ 0.6 | $ 7 | $ 6.1 |
Restricted Stock Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Cliff awards vesting period | 4 years | |||
Fair value of awards vested | $ 3.1 | 3 | ||
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 | $ 5.3 | $ 5.1 | ||
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, 2023 $ / shares shares | |
Restricted Stock Awards | |
Shares | |
Beginning of year (in shares) | shares | 141,551 |
Granted (in shares) | shares | 55,205 |
Vested (in shares) | shares | (45,493) |
Forfeited (in shares) | shares | (2,350) |
End of year (in shares) | shares | 148,913 |
Weighted-Average Grant-Date Fair Value | |
Beginning of year (in dollars per share) | $ / shares | $ 49.83 |
Granted (in dollars per share) | $ / shares | 68.03 |
Vested (in dollars per share) | $ / shares | 50.02 |
Forfeited (in dollars per share) | $ / shares | 52.02 |
End of year (in dollars per share) | $ / shares | $ 56.48 |
Stock Performance Awards | |
Shares | |
Beginning of year (in shares) | shares | 189,800 |
Granted (in shares) | shares | 59,400 |
Vested (in shares) | shares | (55,000) |
Forfeited (in shares) | shares | 0 |
End of year (in shares) | shares | 194,200 |
Weighted-Average Grant-Date Fair Value | |
Beginning of year (in dollars per share) | $ / shares | $ 45.95 |
Granted (in dollars per share) | $ / shares | 61.97 |
Vested (in dollars per share) | $ / shares | 47.79 |
Forfeited (in dollars per share) | $ / shares | 0 |
End of year (in dollars per share) | $ / shares | $ 50.33 |
Share-Based Payments - Weighted
Share-Based Payments - Weighted-Average Assumptions (Details) - Stock Performance Awards | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 4.15% | 1.52% |
Expected term (in years) | 3 years | 3 years |
Expected volatility | 34% | 32% |
Dividend yield | 2.50% | 2.90% |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Weighted-Average Common Shares Outstanding – Basic (in shares) | 41,680 | 41,600 | 41,663 | 41,582 |
Effect of Dilutive Securities: | ||||
Total Dilutive Shares (in shares) | 378 | 374 | 365 | 348 |
Weighted-Average Common Shares Outstanding – Diluted (in shares) | 42,058 | 41,974 | 42,028 | 41,930 |
Stock Performance Awards | ||||
Effect of Dilutive Securities: | ||||
Effect of Dilutive Securities (in shares) | 277 | 276 | 266 | 251 |
Restricted Stock Awards | ||||
Effect of Dilutive Securities: | ||||
Effect of Dilutive Securities (in shares) | 100 | 97 | 97 | 96 |
Employee Stock Purchase Plan Shares | ||||
Effect of Dilutive Securities: | ||||
Effect of Dilutive Securities (in shares) | 1 | 1 | 2 | 1 |
Derivative Instruments (Details
Derivative Instruments (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) MWh | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Current derivative liability | $ 1,500,000 | $ 1,500,000 | $ 7,100,000 | ||
Other Current Liabilities | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative liability | 1,200,000 | 1,200,000 | |||
Other Noncurrent Liabilities | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative liability | 300,000 | $ 300,000 | |||
Swap | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Notional amount of outstanding swap agreements | MWh | 195,400 | ||||
Gain (loss) on derivatives, net | $ 0 | $ 0 | $ (16,000,000) | $ 2,800,000 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Measurements, Recurring and Nonrecurring (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Investments: | ||
Corporate and Government Debt Securities | $ 8,986 | $ 8,761 |
Level 1 | Fair Value, Recurring | ||
Investments: | ||
Money Market Funds | 3,223 | 1,560 |
Mutual Funds | 7,289 | 5,503 |
Total Assets | 10,512 | 7,063 |
Liabilities: | ||
Derivative Instruments | 0 | 0 |
Total Liabilities | 0 | 0 |
Level 1 | Fair Value, Recurring | Corporate Debt Securities | ||
Investments: | ||
Corporate and Government Debt Securities | 0 | 0 |
Level 1 | Fair Value, Recurring | Government-Backed and Government-Sponsored Enterprises’ Debt Securities | ||
Investments: | ||
Corporate and Government Debt Securities | 0 | 0 |
Level 2 | Fair Value, Recurring | ||
Investments: | ||
Money Market Funds | 0 | 0 |
Mutual Funds | 0 | 0 |
Total Assets | 8,986 | 8,761 |
Liabilities: | ||
Derivative Instruments | 1,452 | 7,130 |
Total Liabilities | 1,452 | 7,130 |
Level 2 | Fair Value, Recurring | Corporate Debt Securities | ||
Investments: | ||
Corporate and Government Debt Securities | 1,498 | 1,434 |
Level 2 | Fair Value, Recurring | Government-Backed and Government-Sponsored Enterprises’ Debt Securities | ||
Investments: | ||
Corporate and Government Debt Securities | 7,488 | 7,327 |
Level 3 | Fair Value, Recurring | ||
Investments: | ||
Money Market Funds | 0 | 0 |
Mutual Funds | 0 | 0 |
Total Assets | 0 | 0 |
Liabilities: | ||
Derivative Instruments | 0 | 0 |
Total Liabilities | 0 | 0 |
Level 3 | Fair Value, Recurring | Corporate Debt Securities | ||
Investments: | ||
Corporate and Government Debt Securities | 0 | 0 |
Level 3 | Fair Value, Recurring | Government-Backed and Government-Sponsored Enterprises’ Debt Securities | ||
Investments: | ||
Corporate and Government Debt Securities | $ 0 | $ 0 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Fair Value of Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Carrying Amount | ||
Assets: | ||
Cash and Cash Equivalents | $ 189,214 | $ 118,996 |
Total Assets | 189,214 | 118,996 |
Liabilities: | ||
Short-Term Debt | 51,495 | 8,204 |
Long-Term Debt | 823,998 | 823,821 |
Total | 875,493 | 832,025 |
Fair Value | ||
Assets: | ||
Cash and Cash Equivalents | 189,214 | 118,996 |
Total Assets | 189,214 | 118,996 |
Liabilities: | ||
Short-Term Debt | 51,495 | 8,204 |
Long-Term Debt | 661,986 | 681,615 |
Total | $ 713,481 | $ 689,819 |