Document and Entity Information
Document and Entity Information Document | 6 Months Ended |
Jun. 30, 2020shares | |
Document and Entity Information [Line Items] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Jun. 30, 2020 |
Document Transition Report | false |
Entity File Number | 1-3548 |
Entity Registrant Name | ALLETE, Inc. |
State of Incorporation | MN |
Entity Tax Identification Number | 41-0418150 |
Entity Address, Address Line One | 30 West Superior Street |
Entity Address, City or Town | Duluth |
Entity Address, State or Province | MN |
Entity Address, Postal Zip Code | 55802-2093 |
City Area Code | 218 |
Local Phone Number | 279-5000 |
Title of 12(b) Security | Common Stock, without par value |
Trading Symbol | ALE |
Name of Exchange | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 51,880,664 |
Entity Central Index Key | 0000066756 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q2 |
Amendment Flag | false |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Current Assets [Abstract] | ||
Cash and Cash Equivalents | $ 25.7 | $ 69.3 |
Accounts Receivable (Less Allowance of $1.3 and $0.9) | 85.8 | 96.4 |
Inventories – Net | 82 | 72.8 |
Prepayments and Other | 29.5 | 31 |
Total Current Assets | 223 | 269.5 |
Property, Plant and Equipment – Net | 4,644.5 | 4,377 |
Regulatory Assets | 424.7 | 420.5 |
Equity Investments | 267.1 | 197.6 |
Other Non-Current Assets | 201.1 | 218.2 |
Total Assets | 5,760.4 | 5,482.8 |
Current Liabilities [Abstract] | ||
Accounts Payable | 86.1 | 165.2 |
Accrued Taxes | 48.5 | 50.8 |
Accrued Interest | 18 | 18.1 |
Long-Term Debt Due Within One Year | 509.7 | 212.9 |
Other | 65.4 | 60.4 |
Total Current Liabilities | 727.7 | 507.4 |
Long-Term Debt | 1,381 | 1,400.9 |
Deferred Income Taxes | 202.3 | 212.8 |
Regulatory Liabilities | 569.6 | 560.3 |
Defined Benefit Pension and Other Postretirement Benefit Plans | 159.5 | 172.8 |
Other Non-Current Liabilities | 288.1 | 293 |
Total Liabilities | 3,328.2 | 3,147.2 |
Commitments, Guarantees and Contingencies (Note 6) | ||
Equity [Abstract] | ||
Common Stock Without Par Value, 80.0 Shares Authorized, 51.9 and 51.7 Shares Issued and Outstanding | 1,447.7 | 1,436.7 |
Accumulated Other Comprehensive Loss | (23.3) | (23.6) |
Retained Earnings | 841.3 | 818.8 |
Total ALLETE Equity | 2,265.7 | 2,231.9 |
Non-Controlling Interest in Subsidiaries | 166.5 | 103.7 |
Total Equity | 2,432.2 | 2,335.6 |
Total Liabilities and Equity | $ 5,760.4 | $ 5,482.8 |
Consolidated Balance Sheet Pare
Consolidated Balance Sheet Parentheticals - USD ($) shares in Millions, $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Accounts Receivable [Abstract] | ||
Accounts Receivable, Allowance | $ 1.3 | $ 0.9 |
Common Stock [Abstract] | ||
Common Stock, Par Value | $ 0 | $ 0 |
Common Stock, Shares Authorized | 80 | 80 |
Common Stock, Shares Outstanding | 51.9 | 51.7 |
Common Stock, Shares Issued | 51.9 | 51.7 |
Consolidated Statement of Incom
Consolidated Statement of Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Operating Revenues [Abstract] | ||||
Contracts with Customers - Utility | $ 200.8 | $ 249.8 | $ 466.1 | $ 532 |
Contracts with Customers - Non-utility | 39.6 | 37.7 | 83.1 | 109.8 |
Other - Non-utility | 2.8 | 2.9 | 5.6 | 5.8 |
Total Operating Revenue | 243.2 | 290.4 | 554.8 | 647.6 |
Operating Expenses [Abstract] | ||||
Fuel, Purchased Power and Gas - Utility | 69.3 | 87.9 | 158.3 | 197.7 |
Transmission Services - Utility | 16.4 | 19.2 | 34.9 | 37.5 |
Cost of Sales - Non-utility | 16.3 | 16.5 | 33.2 | 47.1 |
Operating and Maintenance | 59 | 66.7 | 120 | 142.9 |
Depreciation and Amortization | 54.5 | 50.2 | 107.9 | 102.1 |
Taxes Other than Income Taxes | 15 | 13.7 | 27.6 | 27.3 |
Total Operating Expenses | 230.5 | 254.2 | 481.9 | 554.6 |
Operating Income | 12.7 | 36.2 | 72.9 | 93 |
Other Income (Expense) [Abstract] | ||||
Interest Expense | (15.9) | (16.3) | (31.6) | (32.8) |
Equity Earnings | 6.4 | 4.8 | 11.6 | 10.4 |
Gain on Sale of U.S. Water Services | 0 | 0.5 | 0 | 20.6 |
Other | 5.2 | 4.2 | 6.2 | 11.6 |
Total Other Income (Expense) | (4.3) | (6.8) | (13.8) | 9.8 |
Income Before Income Taxes | 8.4 | 29.4 | 59.1 | 102.8 |
Income Tax Expense (Benefit) | (8.5) | (4.8) | (22.3) | (1.9) |
Net Income | 16.9 | 34.2 | 81.4 | 104.7 |
Net Loss Attributable to Non-Controlling Interest | (3.2) | 0 | (5) | 0 |
Net Income Attributable to ALLETE | $ 20.1 | $ 34.2 | $ 86.4 | $ 104.7 |
Earnings Per Share [Abstract] | ||||
Basic (Shares) | 51.8 | 51.6 | 51.8 | 51.6 |
Diluted (Shares) | 51.9 | 51.7 | 51.8 | 51.7 |
Basic Earnings Per Share of Common Stock | $ 0.39 | $ 0.66 | $ 1.67 | $ 2.03 |
Diluted Earnings Per Share of Common Stock | $ 0.39 | $ 0.66 | $ 1.67 | $ 2.02 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Comprehensive Income [Abstract] | ||||
Net Income | $ 16.9 | $ 34.2 | $ 81.4 | $ 104.7 |
Other Comprehensive Income (Loss) [Abstract] | ||||
Unrealized Gain on Securities Net of Income Tax Expense of $0.1, $0.1, $– and $0.1 | 0.4 | 0.1 | 0 | 0.2 |
Defined Benefit Pension and Other Postretirement Benefit Plans Net of Income Tax Expense of $–, $–, $0.1 and $0.1 | 0.1 | 0.2 | 0.3 | 0.2 |
Total Other Comprehensive Income | 0.5 | 0.3 | 0.3 | 0.4 |
Total Comprehensive Income | 17.4 | 34.5 | 81.7 | 105.1 |
Net Loss Attributable to Non-Controlling Interest | (3.2) | 0 | (5) | 0 |
Total Comprehensive Income Attributable to ALLETE | $ 20.6 | $ 34.5 | $ 86.7 | $ 105.1 |
Consolidated Statement of Com_2
Consolidated Statement of Comprehensive Income Parentheticals - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Unrealized Gain (Loss) on Securities, Income Tax Expense | $ 0.1 | $ 0.1 | $ 0 | $ 0.1 |
Defined Benefit Pension and Other Postretirement Benefit Plans, Income Tax Expense | $ 0 | $ 0 | $ 0.1 | $ 0.1 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Operating Activities [Abstract] | ||
Net Income | $ 81.4 | $ 104.7 |
AFUDC – Equity | (1.4) | (1.3) |
Income from Equity Investments – Net of Dividends | (2.2) | (2.2) |
Realized and Unrealized (Gain) Loss on Investments and Property, Plant and Equipment | 1.1 | (2.6) |
Depreciation Expense | 107.9 | 100.8 |
Amortization of PSAs | (5.6) | (5.8) |
Amortization of Other Intangible Assets and Other Assets | 5.2 | 7 |
Deferred Income Tax Benefit | (22.3) | (2.1) |
Share-Based and ESOP Compensation Expense | 3.1 | 3.3 |
Defined Benefit Pension and Postretirement Benefit Expense | 0 | 2.1 |
Payments / Provision for Interim Rate Refund | 11.7 | (40) |
Payments / Provision for Tax Reform Refund | (0.1) | (10.3) |
Bad Debt Expense | 1.1 | (0.6) |
Gain on Sale of U.S. Water Services | 0 | (20.6) |
Changes in Operating Assets and Liabilities [Abstract] | ||
Accounts Receivable | 9.5 | 34 |
Inventories | (9.3) | (9.5) |
Prepayments and Other | 3.3 | 3.4 |
Accounts Payable | (11.6) | (11.2) |
Other Current Liabilities | (8.5) | (24.2) |
Cash Contributions to Defined Benefit Pension Plans | (10.7) | (10.4) |
Changes in Regulatory and Other Non-Current Assets | (16.8) | (8.5) |
Changes in Regulatory and Other Non-Current Liabilities | 8.7 | (10.8) |
Cash from Operating Activities | 144.5 | 95.2 |
Investing Activities [Abstract] | ||
Proceeds from Sale of Available-for-sale Securities | 2.1 | 6 |
Payments for Purchase of Available-for-sale Securities | (2.3) | (5.9) |
Payments for Equity Investments | (66.6) | (4.6) |
Return of Capital From Equity Investments | 0 | 8.3 |
Proceeds from Sale of U.S. Water Services - Net of Transaction Costs and Cash Retained | 0 | 264.2 |
Additions to Property, Plant and Equipment | (419.9) | (236) |
Payments for (Proceeds from) Other Investing Activities | (0.7) | 14 |
Cash from (for) Investing Activities | (487.4) | 46 |
Financing Activities [Abstract] | ||
Proceeds from Issuance of Common Stock | 7.9 | 1.5 |
Proceeds from Issuance of Long-term Debt | 297.4 | 100 |
Repayments of Long-Term Debt | (20.9) | (49.8) |
Proceeds from Noncontrolling Interests | 67.8 | 0 |
Acquisition-Related Contingent Consideration Payments | 0 | (3.8) |
Dividends on Common Stock | (63.9) | (60.7) |
Other Financing Activities | (0.5) | (0.8) |
Cash from (for) Financing Activities | 287.8 | (13.6) |
Change in Cash, Cash Equivalents and Restricted Cash | (55.1) | 127.6 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 37.4 | $ 206.6 |
Consolidated Statement of Share
Consolidated Statement of Shareholders' Equity - USD ($) | Total | Common Stock [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] |
Balance, Beginning Balance at Dec. 31, 2018 | $ 1,428,500,000 | $ (27,300,000) | $ 754,600,000 | $ 0 | |
Consolidated Statement of Shareholders' Equity [Roll Forward] | |||||
Common Stock Issued | 4,800,000 | ||||
Unrealized Gain (Loss) on Debt Securities | $ 200,000 | 200,000 | |||
Defined Benefit Pension and Other Postretirement Plans | 200,000 | 200,000 | |||
Net Income (Loss) Attributable to ALLETE | 104,700,000 | 104,700,000 | |||
Common Stock Dividends | 60,700,000 | (60,700,000) | |||
Proceeds from Noncontrolling Interests | 0 | 0 | |||
Net Loss Attributable to Non-Controlling Interest | 0 | 0 | |||
Balance, End of Period at Jun. 30, 2019 | $ 2,205,000,000 | 1,433,300,000 | (26,900,000) | 798,600,000 | 0 |
Consolidated Statement of Shareholders' Equity [Roll Forward] | |||||
Dividends Per Share of Common Stock | $ 1.175 | ||||
Balance, Beginning Balance at Mar. 31, 2019 | 1,431,100,000 | (27,200,000) | 794,800,000 | 0 | |
Consolidated Statement of Shareholders' Equity [Roll Forward] | |||||
Common Stock Issued | 2,200,000 | ||||
Unrealized Gain (Loss) on Debt Securities | $ 100,000 | 100,000 | |||
Defined Benefit Pension and Other Postretirement Plans | 200,000 | 200,000 | |||
Net Income (Loss) Attributable to ALLETE | 34,200,000 | 34,200,000 | |||
Common Stock Dividends | (30,400,000) | ||||
Proceeds from Noncontrolling Interests | 0 | ||||
Net Loss Attributable to Non-Controlling Interest | 0 | 0 | |||
Balance, End of Period at Jun. 30, 2019 | $ 2,205,000,000 | 1,433,300,000 | (26,900,000) | 798,600,000 | 0 |
Consolidated Statement of Shareholders' Equity [Roll Forward] | |||||
Dividends Per Share of Common Stock | $ 0.5875 | ||||
Balance, Beginning Balance at Dec. 31, 2019 | $ 2,335,600,000 | 1,436,700,000 | (23,600,000) | 818,800,000 | 103,700,000 |
Consolidated Statement of Shareholders' Equity [Roll Forward] | |||||
Common Stock Issued | 11,000,000 | ||||
Unrealized Gain (Loss) on Debt Securities | 0 | 0 | |||
Defined Benefit Pension and Other Postretirement Plans | 300,000 | 300,000 | |||
Net Income (Loss) Attributable to ALLETE | 86,400,000 | 86,400,000 | |||
Common Stock Dividends | 63,900,000 | (63,900,000) | |||
Proceeds from Noncontrolling Interests | 67,800,000 | 67,800,000 | |||
Net Loss Attributable to Non-Controlling Interest | (5,000,000) | (5,000,000) | |||
Balance, End of Period at Jun. 30, 2020 | $ 2,432,200,000 | 1,447,700,000 | (23,300,000) | 841,300,000 | 166,500,000 |
Consolidated Statement of Shareholders' Equity [Roll Forward] | |||||
Dividends Per Share of Common Stock | $ 1.235 | ||||
Balance, Beginning Balance at Mar. 31, 2020 | 1,441,700,000 | (23,800,000) | 853,200,000 | 101,900,000 | |
Consolidated Statement of Shareholders' Equity [Roll Forward] | |||||
Common Stock Issued | 6,000,000 | ||||
Unrealized Gain (Loss) on Debt Securities | $ 400,000 | 400,000 | |||
Defined Benefit Pension and Other Postretirement Plans | 100,000 | 100,000 | |||
Net Income (Loss) Attributable to ALLETE | 20,100,000 | 20,100,000 | |||
Common Stock Dividends | (32,000,000) | ||||
Proceeds from Noncontrolling Interests | 67,800,000 | ||||
Net Loss Attributable to Non-Controlling Interest | (3,200,000) | (3,200,000) | |||
Balance, End of Period at Jun. 30, 2020 | $ 2,432,200,000 | $ 1,447,700,000 | $ (23,300,000) | $ 841,300,000 | $ 166,500,000 |
Consolidated Statement of Shareholders' Equity [Roll Forward] | |||||
Dividends Per Share of Common Stock | $ 0.6175 |
Operations and Significant Acco
Operations and Significant Accounting Policies - Supplemental Statement of Cash Flows Information - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Supplemental Cash Flow Information [Abstract] | ||
Cash Paid for Interest – Net of Amounts Capitalized | $ 30.9 | $ 33.8 |
Recognition of Right-of-use Assets and Lease Liabilities | 0 | 31.2 |
Noncash Investing and Financing Activities [Abstract] | ||
Increase (Decrease) in Accounts Payable for Capital Additions to Property, Plant and Equipment | (67.5) | 21.1 |
Capitalized Asset Retirement Costs | 2.1 | 1.4 |
AFUDC–Equity | $ 1.4 | $ 1.3 |
Operations and Significant Ac_2
Operations and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Operations and Significant Accounting Policies [Text Block] | NOTE 1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES Cash, Cash Equivalents and Restricted Cash. We consider all investments purchased with original maturities of three months or less to be cash equivalents. As of June 30, 2020, restricted cash amounts included in Prepayments and Other on the Consolidated Balance Sheet include collateral deposits required under ALLETE Clean Energy loan and tax equity financing agreements. The restricted cash amounts included in Other Non-Current Assets represent collateral deposits required under ALLETE Clean Energy PSAs and construction projects. In December 31, 2018 balance presented, the amount also includes deposits from a SWL&P customer in aid of future capital expenditures. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheet that aggregate to the amounts presented in the Consolidated Statement of Cash Flows. Cash, Cash Equivalents and Restricted Cash June 30, December 31, June 30, December 31, Millions Cash and Cash Equivalents $25.7 $69.3 $203.1 $69.1 Restricted Cash included in Prepayments and Other 7.3 2.8 0.9 1.3 Restricted Cash included in Other Non-Current Assets 4.4 20.4 2.6 8.6 Cash, Cash Equivalents and Restricted Cash on the Consolidated Statement of Cash Flows $37.4 $92.5 $206.6 $79.0 Inventories – Net. Inventories are stated at the lower of cost or net realizable value. Inventories in our Regulated Operations segment are carried at an average cost or first-in, first-out basis. Inventories in our ALLETE Clean Energy segment and Corporate and Other businesses are carried at an average cost, first-in, first-out or specific identification basis. Inventories – Net June 30, December 31, Millions Fuel (a) $33.5 $25.9 Materials and Supplies 48.5 46.9 Total Inventories – Net $82.0 $72.8 (a) Fuel consists primarily of coal inventory at Minnesota Power. NOTE 1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Continued) Other Non-Current Assets June 30, December 31, Millions Contract Assets (a) $26.7 $28.0 Operating Lease Right-of-use Assets 25.4 28.6 ALLETE Properties 21.5 21.9 Restricted Cash 4.4 20.4 Other Postretirement Benefit Plans 38.4 37.5 Other 84.7 81.8 Total Other Non-Current Assets $201.1 $218.2 (a) Contract Assets consist of payments made to customers as an incentive to execute or extend service agreements. The contract payments are being amortized over the term of the respective agreements as a reduction to revenue. Other Current Liabilities June 30, December 31, Millions PSAs $12.4 $12.3 Provision for Interim Rate Refund (a) 11.7 — Operating Lease Liabilities 6.6 6.9 Other 34.7 41.2 Total Other Current Liabilities $65.4 $60.4 (a) Provision for Interim Rate Refund represents reserves for interim rates resulting from the MPUC’s approval of Minnesota Power’s petition and proposal to resolve and withdraw its rate case. (See Note 2. Regulatory Matters.) Other Non-Current Liabilities June 30, December 31, Millions Asset Retirement Obligation $164.8 $160.3 PSAs 58.3 64.6 Operating Lease Liabilities 18.8 21.8 Other 46.2 46.3 Total Other Non-Current Liabilities $288.1 $293.0 Other Income Six Months Ended June 30, 2020 2019 Millions Pension and Other Postretirement Benefit Plan Non-Service Credits (a) $4.8 $3.6 Interest and Investment Income (Loss) (0.5) 2.5 AFUDC - Equity 1.4 1.3 Gain on Land Sales 0.1 2.0 Other 0.4 2.2 Total Other Income $6.2 $11.6 (a) These are components of net periodic pension and other postretirement benefit cost other than service cost. (See Note 9. Pension and Other Postretirement Benefit Plans.) NOTE 1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Continued) Supplemental Statement of Cash Flows Information. Six Months Ended June 30, 2020 2019 Millions Cash Paid for Interest – Net of Amounts Capitalized $30.9 $33.8 Recognition of Right-of-use Assets and Lease Liabilities — $31.2 Noncash Investing and Financing Activities Increase (Decrease) in Accounts Payable for Capital Additions to Property, Plant and Equipment $(67.5) $21.1 Capitalized Asset Retirement Costs $2.1 $1.4 AFUDC–Equity $1.4 $1.3 Sale of U.S. Water Services. In February 2019, the Company entered into a stock purchase agreement providing for the sale of U.S. Water Services to a subsidiary of Kurita Water Industries Ltd. In March 2019, ALLETE completed the sale and received approximately $270 million in cash, net of transaction costs and cash retained. The gain on sale of U.S. Water Services in 2019 was $13.2 million after-tax. ALLETE Clean Energy Asset Acquisition. On March 10, 2020, ALLETE Clean Energy acquired the rights to the approximately 300 MW Caddo wind project in Oklahoma from Apex Clean Energy for approximately $8 million with additional payments required to be made at defined milestones. The full development of this wind project will involve the sale of energy to corporate customers under long-term power sales agreements. Non-Controlling Interest in Subsidiaries. Non-controlling interest in subsidiaries on the Consolidated Balance Sheet and net loss attributable to non-controlling interest on the Consolidated Statement of Income represent the portion of equity ownership and earnings, respectively, of subsidiaries that are not attributable to equity holders of ALLETE. These amounts as of and during the quarter and six months ended June 30, 2020, related to the tax equity financing structure for ALLETE Clean Energy’s 106 MW Glen Ullin and 80 MW South Peak wind energy facilities. On April 16, 2020, ALLETE Clean Energy commenced operations of South Peak, an 80 MW wind energy facility in Montana, and on April 29, 2020, received $67.8 million in cash, net of issuance costs, from a third-party investor as part of a tax equity financing for this wind energy facility. Subsequent Events. The Company performed an evaluation of subsequent events for potential recognition and disclosure through the date of the financial statements issuance. New Accounting Pronouncements. |
Regulatory Matters
Regulatory Matters | 6 Months Ended |
Jun. 30, 2020 | |
Regulated Operations [Abstract] | |
Regulatory Matters [Text Block] | REGULATORY MATTERS Regulatory matters are summarized in Note 4. Regulatory Matters to the Consolidated Financial Statements in our 2019 Form 10-K, with additional disclosure provided in the following paragraphs. Electric Rates. Entities within our Regulated Operations segment file for periodic rate revisions with the MPUC, PSCW or FERC. As authorized by the MPUC, Minnesota Power also recognizes revenue under cost recovery riders for transmission, renewable, and environmental investments and expenditures. Revenue from cost recovery riders was $14.9 million for the six months ended June 30, 2020 ($17.4 million for six months ended June 30, 2019). NOTE 2. REGULATORY MATTERS (Continued) Electric Rates (Continued) 2020 Minnesota General Rate Case. In November 2019, Minnesota Power filed a retail rate increase request with the MPUC seeking an average increase of approximately 10.6 percent for retail customers. The rate filing sought a return on equity of 10.05 percent and a 53.81 percent equity ratio. On an annualized basis, the requested final rate increase would have generated approximately $66 million in additional revenue. In orders dated December 23, 2019, the MPUC accepted the filing as complete and authorized an annual interim rate increase of $36.1 million that began January 1, 2020. On April 23, 2020, Minnesota Power filed a request with the MPUC that proposed a resolution of Minnesota Power’s 2020 general rate case. Key components of our proposal included removing the power marketing margin credit in base rates and reflecting actual power marketing margins in the fuel adjustment clause effective May 1, 2020; refunding to customers interim rates collected through April 2020; increasing customer rates 4.1 percent compared to the 5.8 percent increase reflected in interim rates; and a provision that Minnesota Power would not file another rate case until at least November 1, 2021, unless certain events occur. In an order dated June 30, 2020, the MPUC approved Minnesota Power’s petition and proposal to resolve and withdraw the general rate case. Effective May 1, 2020, customer rates were set at an increase of 4.1 percent with the removal of the power marketing margin credit from base rates. Actual power marketing margins will be reflected in the fuel adjustment clause on an ongoing basis. As of June 30, 2020, reserves for interim rates of $11.7 million were recorded, which are expected to be refunded to customers in the third quarter of 2020. Transmission Cost Recovery Rider . Minnesota Power has an approved cost recovery rider in place for certain transmission investments and expenditures. In a 2016 order, the MPUC approved Minnesota Power’s updated customer billing rates allowing Minnesota Power to charge retail customers on a current basis for the costs of constructing certain transmission facilities plus a return on the capital invested. On July 9, 2019, Minnesota Power filed a petition seeking MPUC approval to update the customer billing factor to include investments made for the GNTL, which was approved at a hearing on May 14, 2020. (See Note 6. Commitments, Guarantees and Contingencies.) Renewable Cost Recovery Rider. Minnesota Power has an approved cost recovery rider for certain renewable investments and expenditures. The cost recovery rider allows Minnesota Power to charge retail customers on a current basis for the costs of certain renewable investments plus a return on the capital invested. Current customer billing rates for the renewable cost recovery rider were approved by the MPUC in a November 2018 order. On August 15, 2019, Minnesota Power filed a petition seeking MPUC approval to update the customer billing factor. On June 30, 2020, Minnesota Power filed a petition seeking MPUC approval of a customer billing rate for solar costs related to investments and expenditures for meeting the state of Minnesota’s solar energy standard. Fuel Adjustment Clause Reform . In a 2017 order, the MPUC adopted a program to implement certain procedural reforms to Minnesota utilities’ automatic fuel adjustment clause (FAC) for fuel and purchased power. With this order, the method of accounting for all Minnesota electric utilities changed to a monthly budgeted, forward-looking FAC with annual prudence review and true-up to actual allowed costs. On May 1, 2019, Minnesota Power filed its fuel adjustment forecast for 2020, which was accepted by the MPUC in an order dated November 14, 2019, for purposes of setting fuel adjustment clause rates for 2020, subject to a true-up filing in 2021. On May 1, 2020, Minnesota Power filed its fuel adjustment forecast for 2021, subject to MPUC approval. COVID-19 Related Costs . In an order dated March 24, 2020, the PSCW authorized public utilities, which includes SWL&P, to defer expenditures incurred by the utility resulting from its compliance with state government or regulator orders, and as otherwise required to ensure the provision of safe, reliable and affordable access to utility services during Wisconsin’s declared public health emergency for COVID-19. On April 20, 2020, Minnesota Power along with other regulated electric and natural gas service providers in Minnesota filed a joint petition to request MPUC authorization to track incremental costs and expenses incurred as a result of the COVID-19 pandemic, and to defer and record such costs as a regulatory asset, subject to recovery in a future proceeding. In an order dated May 22, 2020, the MPUC approved the joint petition requiring the joint petitioners to track cost and revenue impacts resulting from the COVID-19 pandemic with review for recovery in a future rate proceeding. NOTE 2. REGULATORY MATTERS (Continued) Integrated Resource Plan. In a 2016 order, the MPUC approved Minnesota Power’s 2015 IRP with modifications. The order accepted Minnesota Power’s plans for the economic idling of Taconite Harbor Units 1 and 2 and the ceasing of coal-fired operations at Taconite Harbor in 2020, directed Minnesota Power to retire Boswell Units 1 and 2 no later than 2022, required an analysis of generation and demand response alternatives to be filed with a natural gas resource proposal, and required Minnesota Power to conduct requests for proposal for additional wind, solar and demand response resource additions. Minnesota Power retired Boswell Units 1 and 2 in the fourth quarter of 2018. The MPUC also has required a baseload retirement evaluation in Minnesota Power’s next IRP filing analyzing its existing fleet, including potential early retirement scenarios of Boswell Units 3 and 4, as well as a securitization plan. Minnesota Power’s next IRP filing was due October 1, 2020; however, on May 29, 2020, Minnesota Power filed a request to extend the deadline for submitting its next IRP filing citing the COVID-19 pandemic. On July 30, 2020, the MPUC granted an extension of the deadline for submission until February 1, 2021, with interim reports due in the fourth quarter of 2020. Nemadji Trail Energy Center. In 2017, Minnesota Power submitted a resource package to the MPUC which included requesting approval of a 250 MW natural gas capacity dedication agreement. The natural gas capacity dedication agreement was subject to MPUC approval of the construction of NTEC, a 525 MW to 550 MW combined-cycle natural gas-fired generating facility which will be jointly owned by Dairyland Power Cooperative and a subsidiary of ALLETE. Minnesota Power would purchase approximately 50 percent of the facility's output starting in 2025. In an order dated January 24, 2019, the MPUC approved Minnesota Power’s request for approval of the NTEC natural gas capacity dedication agreement. On December 23, 2019, the Minnesota Court of Appeals reversed and remanded the MPUC’s decision to approve certain affiliated-interest agreements. The MPUC was ordered to determine whether NTEC may have the potential for significant environmental effects and, if so, to prepare an environmental assessment worksheet before reassessing the agreements. On January 22, 2020, Minnesota Power filed a petition for further review with the Minnesota Supreme Court requesting that it review and overturn the Minnesota Court of Appeals decision, which petition was accepted for review by the Minnesota Supreme Court on March 18, 2020. On January 8, 2019, an application for a certificate of public convenience and necessity for NTEC was submitted to the PSCW, which was approved by the PSCW at a hearing on January 16, 2020. Construction of NTEC is subject to obtaining additional permits from local, state and federal authorities. The total project cost is estimated to be approximately $700 million, of which ALLETE’s portion is expected to be approximately $350 million. ALLETE’s portion of NTEC project costs incurred through June 30, 2020, is approximately $14 million. Conservation Improvement Program. On July 1, 2020, Minnesota Power submitted its CIP triennial filing for 2021 through 2023 to the MPUC, which outlines Minnesota Power’s CIP spending and energy-saving goals for those years. Minnesota Power’s CIP investment goals are $10.5 million for 2021, $10.7 million for 2022 and $10.9 million for 2023, subject to MPUC approval. MISO Return on Equity Complaint. MISO transmission owners, including ALLETE and ATC, have an authorized return on equity of 10.02 percent, or 10.52 percent including an incentive adder for participation in a regional transmission organization, based on a May 21, 2020, FERC order that granted rehearing of a November 2019 FERC order, which had reduced the base return on equity for regional transmission organizations to 9.88 percent, or 10.38 percent including an incentive adder. Minnesota Solar Energy Standard. On May 20, 2020, the MPUC issued a notice requesting all regulated gas and electric utilities provide a list of all ongoing, planned, or possible investments that support Minnesota’s energy policy objectives and aid economic recovery in Minnesota, among other items. On June 17, 2020, Minnesota Power filed a response which included outlining a proposal to accelerate its plans for solar energy with an estimated $40 million investment in approximately 20 MW of solar energy projects in Minnesota. Regulatory Assets and Liabilities. Our regulated utility operations are subject to accounting guidance for the effect of certain types of regulation. Regulatory assets represent incurred costs that have been deferred as they are probable for recovery in customer rates. Regulatory liabilities represent obligations to make refunds to customers and amounts collected in rates for which the related costs have not yet been incurred. The Company assesses quarterly whether regulatory assets and liabilities meet the criteria for probability of future recovery or deferral. With the exception of the regulatory asset for Boswell Units 1 and 2 net plant and equipment, no other regulatory assets are currently earning a return. The recovery, refund or credit to rates for these regulatory assets and liabilities will occur over the periods either specified by the applicable regulatory authority or over the corresponding period related to the asset or liability. NOTE 2. REGULATORY MATTERS (Continued) Regulatory Assets and Liabilities (Continued) Regulatory Assets and Liabilities June 30, December 31, Millions Non-Current Regulatory Assets Defined Benefit Pension and Other Postretirement Benefit Plans $208.0 $212.9 Income Taxes 122.1 123.4 Cost Recovery Riders 39.3 24.7 Asset Retirement Obligations 31.7 32.0 Manufactured Gas Plant 8.3 8.2 Boswell Units 1 and 2 Net Plant and Equipment 7.8 10.7 PPACA Income Tax Deferral 4.7 4.8 Other 2.8 3.8 Total Non-Current Regulatory Assets $424.7 $420.5 Current Regulatory Liabilities (a) Provision for Interim Rate Refund (b) $11.7 — Transmission Formula Rates Refund 0.8 $1.7 Other 1.7 0.2 Total Current Regulatory Liabilities 14.2 1.9 Non-Current Regulatory Liabilities Income Taxes 395.5 407.2 Wholesale and Retail Contra AFUDC 87.4 79.3 Plant Removal Obligations 39.3 35.5 Defined Benefit Pension and Other Postretirement Benefit Plans 14.1 17.0 North Dakota Investment Tax Credits 12.2 12.3 Fuel Adjustment Clause (c) 12.2 — Conservation Improvement Program 5.4 5.4 Other 3.5 3.6 Total Non-Current Regulatory Liabilities 569.6 560.3 Total Regulatory Liabilities $583.8 $562.2 (a) Current regulatory liabilities are presented within Other Current Liabilities on the Consolidated Balance Sheet. (b) Provision for Interim Rate Refund represents reserves for interim rates resulting from the MPUC’s approval of Minnesota Power’s petition and proposal to resolve and withdraw its rate case. This amount is expected to be refunded to Minnesota Power regulated retail customers in the third quarter of 2020. (See 2020 Minnesota General Rate Case.) (c) Fuel adjustment clause regulatory liability represents the amount expected to be refunded to customers for the over-collection of fuel adjustment clause recoveries. (See Fuel Adjustment Clause Reform.) |
Equity Investments
Equity Investments | 6 Months Ended |
Jun. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Investments [Text Block] | EQUITY INVESTMENTS Investment in ATC . Our wholly-owned subsidiary, ALLETE Transmission Holdings, owns approximately 8 percent of ATC, a Wisconsin-based utility that owns and maintains electric transmission assets in portions of Wisconsin, Michigan, Minnesota and Illinois. We account for our investment in ATC under the equity method of accounting. In the six months ended June 30, 2020, we invested $1.1 million in ATC, and on July 31, 2020, we invested an additional $0.8 million. We expect to make additional investments of $0.8 million in 2020. ALLETE’s Investment in ATC Millions Equity Investment Balance as of December 31, 2019 $141.6 Cash Investments 1.1 Equity in ATC Earnings (a) 11.6 Distributed ATC Earnings (9.4) Amortization of the Remeasurement of Deferred Income Taxes 0.7 Equity Investment Balance as of June 30, 2020 $145.6 (a) Equity in ATC Earnings includes $1.2 million of additional earnings resulting from the FERC’s May 21, 2020, order increasing ATC’s authorized return on equity to 10.52 percent including an incentive adder for participation in a regional transmission organization. NOTE 3. EQUITY INVESTMENTS (Continued) ATC’s authorized return on equity is 10.02 percent, or 10.52 percent including an incentive adder for participation in a regional transmission organization, based on a May 21, 2020, FERC order that granted rehearing of a November 2019 FERC order. (See Note 2. Regulatory Matters.) |
Fair Value
Fair Value | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value [Text Block] | FAIR VALUE Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable. We primarily apply the market approach for recurring fair value measurements and endeavor to utilize the best available information. Accordingly, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs, which are used to measure fair value, are prioritized through the fair value hierarchy. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Descriptions of the three levels of the fair value hierarchy are discussed in Note 7. Fair Value to the Consolidated Financial Statements in our 2019 Form 10-K. The following tables set forth, by level within the fair value hierarchy, our assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2020, and December 31, 2019. Each asset and liability is classified based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of these assets and liabilities and their placement within the fair value hierarchy levels. The estimated fair value of Cash and Cash Equivalents listed on the Consolidated Balance Sheet approximates the carrying amount and therefore is excluded from the recurring fair value measures in the following tables. NOTE 4. FAIR VALUE (Continued) Fair Value as of June 30, 2020 Recurring Fair Value Measures Level 1 Level 2 Level 3 Total Millions Assets Investments (a) Available-for-sale – Equity Securities $10.1 — — $10.1 Available-for-sale – Corporate and Governmental Debt Securities (b) — $9.8 — 9.8 Cash Equivalents 0.8 — — 0.8 Total Fair Value of Assets $10.9 $9.8 — $20.7 Liabilities Deferred Compensation (c) — $20.0 — $20.0 Total Fair Value of Liabilities — $20.0 — $20.0 Total Net Fair Value of Assets (Liabilities) $10.9 $(10.2) — $0.7 Fair Value as of December 31, 2019 Recurring Fair Value Measures Level 1 Level 2 Level 3 Total Millions Assets Investments (a) Available-for-sale – Equity Securities $11.1 — — $11.1 Available-for-sale – Corporate and Governmental Debt Securities — $9.7 — 9.7 Cash Equivalents 0.9 — — 0.9 Total Fair Value of Assets $12.0 $9.7 — $21.7 Liabilities Deferred Compensation (c) — $21.2 — $21.2 Total Fair Value of Liabilities — $21.2 — $21.2 Total Net Fair Value of Assets (Liabilities) $12.0 $(11.5) — $0.5 (a) Included in Other Non-Current Assets on the Consolidated Balance Sheet. (b) As of June 30, 2020, the aggregate amount of available-for-sale corporate and governmental debt securities maturing in one year or less was $3.8 million, in one year to less than three years was $5.0 million, in three years to less than five years was $1.0 million and in five or more years was zero. (c) Included in Other Non-Current Liabilities on the Consolidated Balance Sheet. Fair Value of Financial Instruments. With the exception of the item listed in the following table, the estimated fair value of all financial instruments approximates the carrying amount. The fair value of the item listed in the following table was based on quoted market prices for the same or similar instruments (Level 2). Financial Instruments Carrying Amount Fair Value Millions Short-Term and Long-Term Debt June 30, 2020 $1,899.0 $2,163.4 December 31, 2019 $1,622.6 $1,791.8 Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis. Non-financial assets such as equity method investments, land inventory, and property, plant and equipment are measured at fair value when there is an indicator of impairment and recorded at fair value only when an impairment is recognized. For the quarter and six months ended June 30, 2020, and the year ended December 31, 2019, there were no indicators of impairment for these non-financial assets. We continue to monitor changes in the broader energy markets that could indicate impairment at an ALLETE Clean Energy wind energy facility which currently has undiscounted future cash flows that are marginally in excess of the asset carrying value of approximately $11 million. A continued decline in energy prices would likely result in a future impairment. |
Short-Term and Long-Term Debt
Short-Term and Long-Term Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Short-Term and Long-Term Debt [Text Block] | SHORT-TERM AND LONG-TERM DEBT The following tables present the Company’s short-term and long-term debt as of June 30, 2020, and December 31, 2019: June 30, 2020 Principal Unamortized Debt Issuance Costs Total Millions Short-Term Debt $510.0 $(0.3) $509.7 Long-Term Debt 1,389.0 (8.0) 1,381.0 Total Debt $1,899.0 $(8.3) $1,890.7 December 31, 2019 Principal Unamortized Debt Issuance Costs Total Millions Short-Term Debt $213.3 $(0.4) $212.9 Long-Term Debt 1,409.3 (8.4) 1,400.9 Total Debt $1,622.6 $(8.8) $1,613.8 We had $23.5 million outstanding in standby letters of credit and no outstanding draws under our lines of credit as of June 30, 2020 ($62.0 million in standby letters of credit and no outstanding draws as of December 31, 2019). On January 10, 2020, ALLETE entered into a $200 million unsecured term loan agreement (Term Loan) of which we have borrowed the full amount as of June 30, 2020. The Term Loan is due on February 10, 2021, and may be repaid at any time. Interest is payable monthly at a rate per annum equal to LIBOR plus 0.55 percent. Proceeds from the Term Loan were used for construction-related expenditures. On March 26, 2020, ALLETE agreed to sell first mortgage bonds (Bonds) to certain institutional buyers in the private placement market, which were issued on August 3, 2020, in two series as follows: Maturity Date Principal Amount Interest Rate August 1, 2030 $46 Million 2.50% August 1, 2050 $94 Million 3.30% ALLETE has the option to prepay all or a portion of the Bonds at its discretion, subject to a make-whole provision. The Bonds are subject to additional terms and conditions which are customary for these types of transactions. ALLETE plans to use the proceeds from the sale of the Bonds to fund utility capital investment and for general corporate purposes. The Bonds were sold in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, to institutional accredited investors. On April 8, 2020, ALLETE entered into a $115 million unsecured term loan agreement (Term Loan) and borrowed $95 million upon execution. The additional draw of $20 million provided for under the Term Loan was made in July 2020. The Term Loan is due on April 7, 2021, and may be repaid at any time. Interest is payable monthly at a rate per annum equal to LIBOR plus 1.7 percent with a LIBOR floor of 0.75 percent. Proceeds from the Term Loan will be used for general corporate purposes. Financial Covenants. Our long-term debt arrangements contain customary covenants. In addition, our lines of credit and letters of credit supporting certain long-term debt arrangements contain financial covenants. Our compliance with financial covenants is not dependent on debt ratings. The most restrictive financial covenant requires ALLETE to maintain a ratio of indebtedness to total capitalization (as the amounts are calculated in accordance with the respective long-term debt arrangements) of less than or equal to 0.65 to 1.00, measured quarterly. As of June 30, 2020, our ratio was approximately 0.44 to 1.00. Failure to meet this covenant would give rise to an event of default if not cured after notice from the lender, in which event ALLETE may need to pursue alternative sources of funding. Some of ALLETE’s debt arrangements contain “cross-default” provisions that would result in an event of default if there is a failure under other financing arrangements to meet payment terms or to observe other covenants that would result in an acceleration of payments due. ALLETE has no significant restrictions on its ability to pay dividends from retained earnings or net income. As of June 30, 2020, ALLETE was in compliance with its financial covenants. |
Commitments, Guarantees and Con
Commitments, Guarantees and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Guarantees and Contingencies [Text Block] | COMMITMENTS, GUARANTEES AND CONTINGENCIES Power Purchase and Sale Agreements. Our long-term PPAs have been evaluated under the accounting guidance for variable interest entities. We have determined that either we have no variable interest in the PPAs or, where we do have variable interests, we are not the primary beneficiary; therefore, consolidation is not required. These conclusions are based on the fact that we do not have both control over activities that are most significant to the entity and an obligation to absorb losses or receive benefits from the entity’s performance. Our financial exposure relating to these PPAs is limited to our capacity and energy payments. Our PPAs are summarized in Note 9. Commitments, Guarantees and Contingencies to the Consolidated Financial Statements in our 2019 Form 10-K, with additional disclosure provided in the following paragraphs. Square Butte PPA. As of June 30, 2020, Square Butte had total debt outstanding of $272.9 million. Fuel expenses are recoverable through Minnesota Power’s fuel adjustment clause and include the cost of coal purchased from BNI Energy under a long-term contract. Minnesota Power’s cost of power purchased from Square Butte during the six months ended June 30, 2020, was $40.8 million ($41.1 million for the same period in 2019). This reflects Minnesota Power’s pro rata share of total Square Butte costs based on the 50 percent output entitlement. Included in this amount was Minnesota Power’s pro rata share of interest expense of $3.7 million ($4.2 million for the same period in 2019). Minnesota Power’s payments to Square Butte are approved as a purchased power expense for ratemaking purposes by both the MPUC and the FERC. Minnkota Power PSA. Minnesota Power has a PSA with Minnkota Power, which commenced in 2014. Under the PSA, Minnesota Power is selling a portion of its entitlement from Square Butte to Minnkota Power, resulting in Minnkota Power’s net entitlement increasing and Minnesota Power’s net entitlement decreasing until Minnesota Power’s share is eliminated at the end of 2025. Of Minnesota Power’s 50 percent output entitlement, it sold to Minnkota Power approximately 28 percent in 2020 and in 2019. Minnesota Power Short-term PSAs . Minnesota Power has entered into various short-term PSAs to sell 300 MW of energy in 2020 and 2021. These PSAs were entered into to proactively mitigate the uncertainty of customers’ energy needs and potential load loss due to the COVID-19 pandemic. Additional transactions, purchases or sales, could be entered into as the extent and duration of the COVID-19 pandemic becomes known. Coal, Rail and Shipping Contracts. Minnesota Power has coal supply agreements providing for the purchase of a significant portion of its coal requirements through December 2021. Minnesota Power also has coal transportation agreements in place for the delivery of a significant portion of its coal requirements through December 2021. The costs of fuel and related transportation costs for Minnesota Power’s generation are recoverable from Minnesota Power’s retail and municipal utility customers through the fuel adjustment clause. Transmission. We continue to make investments in transmission opportunities that strengthen or enhance the transmission grid or take advantage of our geographical location between sources of renewable energy and end users. These include the GNTL, investments to enhance our own transmission facilities, investments in other transmission assets (individually or in combination with others) and our investment in ATC. Great Northern Transmission Line. As a condition of the 250-MW long-term PPA entered into with Manitoba Hydro, construction of additional transmission capacity was required. As a result, Minnesota Power constructed the GNTL, an approximately 220-mile 500-kV transmission line between Manitoba and Minnesota’s Iron Range that was proposed by Minnesota Power and Manitoba Hydro in order to strengthen the electric grid, enhance regional reliability and promote a greater exchange of sustainable energy. On June 1, 2020, Minnesota Power placed the GNTL into service with project costs of $307.1 million incurred by Minnesota Power through June 30, 2020. Total project costs, including those costs contributed by a subsidiary of Manitoba Hydro, incurred through June 30, 2020 totaled $657.0 million. Also on June 1, 2020, Manitoba Hydro placed the MMTP into service. Environmental Matters. Our businesses are subject to regulation of environmental matters by various federal, state and local authorities. A number of regulatory changes to the Clean Air Act, the Clean Water Act and various waste management requirements have been promulgated by both the EPA and state authorities over the past several years. Minnesota Power’s facilities are subject to additional requirements under many of these regulations. Minnesota Power is reshaping its generation portfolio, over time, to reduce its reliance on coal, has installed cost-effective emission control technology, and advocates for sound science and policy during rulemaking implementation. We consider our businesses to be in substantial compliance with currently applicable environmental regulations and believe all necessary permits have been obtained. We anticipate that with many state and federal environmental regulations and requirements finalized, or to be finalized in the near future, potential expenditures for future environmental matters may be material and require significant capital investments. Minnesota Power has evaluated various environmental compliance scenarios using possible outcomes of environmental regulations to project power supply trends and impacts on customers. We review environmental matters on a quarterly basis. Accruals for environmental matters are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based on current law and existing technologies. Accruals are adjusted as assessment and remediation efforts progress, or as additional technical or legal information becomes available. Accruals for environmental liabilities are included in the Consolidated Balance Sheet at undiscounted amounts and exclude claims for recoveries from insurance or other third parties. Costs related to environmental contamination treatment and cleanup are expensed unless recoverable in rates from customers. Air. The electric utility industry is regulated both at the federal and state level to address air emissions. Minnesota Power’s thermal generating facilities mainly burn low-sulfur western sub-bituminous coal. All of Minnesota Power’s coal-fired generating facilities are equipped with pollution control equipment such as scrubbers, baghouses and low NO X technologies. Under currently applicable environmental regulations, these facilities are substantially compliant with emission requirements. Cross-State Air Pollution Rule (CSAPR). The CSAPR requires certain states in the eastern half of the U.S., including Minnesota, to reduce power plant emissions that contribute to ozone or fine particulate pollution in other states. The CSAPR does not require installation of controls but does require facilities have sufficient allowances to cover their emissions on an annual basis. These allowances are allocated to facilities from each state’s annual budget, and can be bought and sold. Based on our review of the NO x and SO 2 allowances issued and pending issuance, we currently expect generation levels and emission rates will result in continued compliance with the CSAPR. The ongoing CSAPR “good neighbor” provision and interstate transport litigation is also not currently projected to affect Minnesota Power’s CSAPR compliance. The State of Minnesota has not been identified by the downwind litigant states as a culpable upwind source, and previous EPA air quality modeling has demonstrated that Minnesota is not a significant contributor to downwind air quality attainment challenges. Minnesota Power also does not currently anticipate being affected by the EPA’s expected upcoming rulemakings to address the remand of certain CSAPR rules. Minnesota Power will continue to monitor ongoing CSAPR litigation and associated rulemakings. National Ambient Air Quality Standards (NAAQS). The EPA is required to review the NAAQS every five years. If the EPA determines that a state’s air quality is not in compliance with the NAAQS, the state is required to adopt plans describing how it will reduce emissions to attain the NAAQS. Minnesota Power actively monitors NAAQS developments and compliance costs for existing standards or proposed NAAQS revisions are not expected to be material. NOTE 6. COMMITMENTS, GUARANTEES AND CONTINGENCIES (Continued) Environmental Matters (Continued) Climate Change. The scientific community generally accepts that emissions of GHG are linked to global climate change which creates physical and financial risks. Physical risks could include, but are not limited to: increased or decreased precipitation and water levels in lakes and rivers; increases or other changes in temperatures; and changes in the intensity and frequency of extreme weather events. These all have the potential to affect the Company’s business and operations. We are addressing climate change by taking the following steps that also ensure reliable and environmentally compliant generation resources to meet our customers’ requirements: • Expanding renewable power supply for both our operations and the operations of others; • Providing energy conservation initiatives for our customers and engaging in other demand side management efforts; • Improving efficiency of our generating facilities; • Supporting research of technologies to reduce carbon emissions from generating facilities and carbon sequestration efforts; • Evaluating and developing less carbon intensive future generating assets such as efficient and flexible natural gas-fired generating facilities; • Managing vegetation on right-of-way corridors to reduce potential wildfire or storm damage risks; and • Practicing sound forestry management in our service territories to create landscapes more resilient to disruption from climate-related changes, including planting and managing long-lived conifer species. EPA Regulation of GHG Emissions. On June 19, 2019, the EPA finalized several separate rulemakings regarding regulating carbon emissions from electric utility generating units. The EPA repealed the Clean Power Plan (CPP), following a determination by the EPA that the CPP exceeded the EPA’s statutory authority under the Clean Air Act (CAA). The primary reason for the repeal was the CPP’s attempt to regulate electric generating unit’s carbon emissions through measures outside of the affected unit’s direct control. The CPP was first announced as a proposed rule under Section 111(d) of the Clean Air Act for existing power plants entitled “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Generating Units”. With the repeal of the CPP, the Affordable Clean Energy Rule was finalized. The rule establishes emissions guidelines for states to use when developing plans to limit carbon dioxide at coal-fired power plants. The rule identifies heat rate improvements made at individual units as the best system of emission reduction. Affected facilities for Minnesota Power include Boswell Units 3 and 4. Based on our initial review of the rule, many of the candidate heat rate improvements are already installed on Boswell Units 3 and 4. Additionally, the EPA finalized new regulations for the state implementation of the Affordable Clean Energy Rule and any future emission guidelines issued under CAA Section 111(d). States will have three years to submit State Implementation Plans (SIPs), and the EPA has 12 months to review and approve those plans. Since the Affordable Clean Energy Rule allows states considerable flexibility in how to best implement its requirements, Minnesota Power plans to work closely with the MPCA and the Minnesota Department of Commerce, who are currently co-reviewing the rule as the state develops its SIP. If a state does not submit a SIP or submits a SIP that is unacceptable to the EPA, the EPA will develop a Federal Implementation Plan. The MPCA currently plans to develop a SIP for the Affordable Clean Energy Rule and Minnesota Power is working with the MPCA to provide requested information for the SIP. Minnesota had already initiated several measures consistent with those called for under the now repealed CPP and finalized Affordable Clean Energy Rule. Minnesota Power continues implementing its EnergyForward strategic plan that provides for significant emission reductions and diversifying its electricity generation mix to include more renewable and natural gas energy. We are unable to predict the GHG emission compliance costs we might incur as a result of the Affordable Clean Energy Rule and the resulting SIP; however, the costs could be material. Minnesota Power would seek recovery of additional costs through a rate proceeding. NOTE 6. COMMITMENTS, GUARANTEES AND CONTINGENCIES (Continued) Environmental Matters (Continued) Water. The Clean Water Act requires NPDES permits be obtained from the EPA (or, when delegated, from individual state pollution control agencies) for any wastewater discharged into navigable waters. We have obtained all necessary NPDES permits, including NPDES storm water permits for applicable facilities, to conduct our operations. Steam Electric Power Generating Effluent Limitations Guidelines. In 2015, the EPA issued revised federal effluent limitation guidelines (ELG) for steam electric power generating stations under the Clean Water Act. It set effluent limits and prescribed BACT for several wastewater streams, including flue gas desulphurization (FGD) water, bottom ash transport water and coal combustion landfill leachate. In 2017, the EPA announced a two-year postponement of the ELG compliance date of November 1, 2018, to November 1, 2020, while the agency reconsiders the bottom ash transport water and FGD wastewater provisions. On April 12, 2019, the U.S. Court of Appeals for the Fifth Circuit vacated and remanded back to the EPA portions of the ELG that allowed for continued discharge of legacy wastewater and leachate. On November 22, 2019, the EPA published a draft rulemaking that proposes to allow re-use of bottom ash transport water in FGD scrubber systems with minor discharges related to maintaining system water balance. The proposed rulemaking would also allow future discharge of FGD wastewater discharge provided it meets new BACT standards. A final rulemaking is anticipated in late 2020. The ELG's potential impact on Minnesota Power operations is primarily at Boswell. Boswell currently discharges bottom ash contact water through its NPDES permit, and also has a closed-loop FGD system that does not discharge to surface waters, but may do so in the future if additional water treatment measures are implemented. Under the current ELG rule, bottom ash transport water discharge to surface waters must cease no later than December 31, 2023. Bottom ash contact water will either need to be re-used in a closed-loop process, routed to a FGD scrubber, or the bottom ash handling system will need to be converted to a dry process. The ELG rule provision regarding these two waste-streams are being reconsidered and may change prior to November 1, 2020. Efforts have been underway at Boswell to reduce the amount of water discharged and evaluate potential re-use options in its plant processes. The EPA’s additional reconsideration of legacy wastewater discharge requirements have the potential to reduce timelines for dewatering Boswell’s existing bottom ash pond. The timing of a draft rule addressing legacy wastewater and leachate is currently unknown. At this time, we estimate that the planned dry conversion of bottom ash handling and storage at Boswell in response to the CCR revisions requiring closure of clay-lined impoundments as well as other water re-use practices, will reduce or eliminate the need for additional significant compliance costs for ELG bottom ash water requirements. Compliance costs we might incur related to other ELG waste streams (e.g. legacy leachate) or other potential future water discharge regulations cannot be estimated; however, the costs could be material, including costs associated with wastewater treatment and re-use. Minnesota Power would seek recovery of additional costs through a rate proceeding. Solid and Hazardous Waste. The Resource Conservation and Recovery Act of 1976 regulates the management and disposal of solid and hazardous wastes. We are required to notify the EPA of hazardous waste activity and, consequently, routinely submit reports to the EPA. Coal Ash Management Facilities. Minnesota Power stores or disposes coal ash at four of its electric generating facilities by the following methods: storing ash in clay-lined onsite impoundments (ash ponds), disposing of dry ash in a lined dry ash landfill, applying ash to land as an approved beneficial use and trucking ash to state permitted landfills. Coal Combustion Residuals from Electric Utilities (CCR). In 2015, the EPA published the final rule regulating CCR as nonhazardous waste under Subtitle D of the Resource Conservation and Recovery Act (RCRA) in the Federal Register. The rule includes additional requirements for new landfill and impoundment construction as well as closure activities related to certain existing impoundments. Costs of compliance for Boswell and Laskin are expected to occur primarily over the next 15 years and be between approximately $65 million and $120 million. Compliance costs for CCR at Taconite Harbor are not expected to be material. Minnesota Power would seek recovery of additional costs through a rate proceeding. NOTE 6. COMMITMENTS, GUARANTEES AND CONTINGENCIES (Continued) Environmental Matters (Continued) Minnesota Power continues to work on minimizing costs through evaluation of beneficial re-use and recycling of CCR and CCR-related waters. In 2017, the EPA announced its intention to formally reconsider the CCR rule under Subtitle D of the RCRA and in March 2018, published the first phase of the proposed rule revisions in the Federal Register. In July 2018, the EPA finalized revisions to elements of the CCR rule, including extending certain deadlines by two years, the establishment of alternative groundwater protection standards for certain constituents and the potential for risk-based management options at facilities based on site characteristics. In August 2018, a U.S. District Court for the District of Columbia decision vacated specific provisions of the CCR rule. The court decision changed the status of three existing impoundments at Boswell that must now be considered unlined. The EPA proposed additional rule revisions in August and December 2019 to address outstanding issues from litigation and closure timelines for unlined impoundments, respectively. These rules are anticipated to be finalized in 2020 and could impact the timing of closure activities for Boswell’s three impoundments. Additionally, the EPA recently released a proposed Part B rulemaking that addresses options for beneficial reuse of CCR materials, alternative liner demonstrations, and other CCR regulatory revisions. Expected compliance costs at Boswell due to the court decision and subsequent rule revisions are reflected in our estimate of compliance costs for the CCR rule noted previously. Minnesota Power would seek recovery of additional costs through a rate proceeding. Other Environmental Matters Manufactured Gas Plant Site. We are reviewing and addressing environmental conditions at a former manufactured gas plant site located in Superior, Wisconsin. SWL&P has been working with the Wisconsin Department of Natural Resources (WDNR) in determining the extent of contamination at the site and surrounding properties. In December 2017, the WDNR authorized SWL&P to transition from site investigation into the remedial design process. As of June 30, 2020, we have recorded a liability of approximately $7 million for remediation costs at this site (approximately $7 million as of December 31, 2019). SWL&P has also recorded an associated regulatory asset as we expect recovery of these remediation costs to be allowed by the PSCW. Remediation costs are expected to be incurred through 2023. |
Earnings Per Share and Common S
Earnings Per Share and Common Stock | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share and Common Stock [Text Block] | EARNINGS PER SHARE AND COMMON STOCK We compute basic earnings per share using the weighted average number of shares of common stock outstanding during each period. The difference between basic and diluted earnings per share, if any, arises from non-vested restricted stock units and performance share awards granted under our Executive Long-Term Incentive Compensation Plan. 2020 2019 Reconciliation of Basic and Diluted Dilutive Dilutive Earnings Per Share Basic Securities Diluted Basic Securities Diluted Millions Except Per Share Amounts Quarter ended June 30, Net Income Attributable to ALLETE $20.1 $20.1 $34.2 $34.2 Average Common Shares 51.8 0.1 51.9 51.6 0.1 51.7 Earnings Per Share $0.39 $0.39 $0.66 $0.66 Six Months Ended June 30, Net Income Attributable to ALLETE $86.4 $86.4 $104.7 $104.7 Average Common Shares 51.8 — 51.8 51.6 0.1 51.7 Earnings Per Share $1.67 $1.67 $2.03 $2.02 |
Income Tax Expense
Income Tax Expense | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Tax Expense [Text Block] | INCOME TAX EXPENSE Quarter Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Millions Current Income Tax Expense (a) Federal — — — — State — $(0.1) — $0.2 Total Current Income Tax Expense (Benefit) — $(0.1) — $0.2 Deferred Income Tax Expense (Benefit) Federal (b) $(8.6) $(7.1) $(26.2) $(16.8) State (c) 0.2 2.5 4.2 15.0 Investment Tax Credit Amortization (0.1) (0.1) (0.3) (0.3) Total Deferred Income Tax Benefit $(8.5) $(4.7) $(22.3) $(2.1) Total Income Tax Benefit $(8.5) $(4.8) $(22.3) $(1.9) (a) For each of the six months ended June 30, 2020 and 2019, the federal and state current tax expense was minimal due to NOLs which resulted from the bonus depreciation provisions of certain tax legislation. Federal and state NOLs are being carried forward to offset current and future taxable income. (b) For each of the six months ended June 30, 2020 and 2019, the federal income tax benefit is primarily due to production tax credits. (c) For the six months ended June 30, 2019, the state income tax expense is primarily related to the sale of U.S. Water Services. NOTE 8. INCOME TAX EXPENSE (Continued) The Company's tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items arising in that quarter. In each quarter, the Company updates its estimate of the annual effective tax rate and if the estimated annual effective tax rate changes, the Company would make a cumulative adjustment in that quarter. Quarter Ended Six Months Ended Reconciliation of Taxes from Federal Statutory June 30, June 30, Rate to Total Income Tax Expense 2020 2019 2020 2019 Millions Income Before Income Taxes $8.4 $29.4 $59.1 $102.8 Statutory Federal Income Tax Rate 21 % 21 % 21 % 21 % Income Taxes Computed at Statutory Federal Rate $1.7 $6.2 $12.4 $21.6 Increase (Decrease) in Income Tax Due to: State Income Taxes – Net of Federal Income Tax Benefit 0.1 1.9 3.3 12.0 Production Tax Credits (9.6) (9.8) (33.4) (26.1) Regulatory Differences – Excess Deferred Tax (0.9) (1.6) (5.3) (4.8) U.S. Water Services Sale of Stock Basis Difference — (0.7) — 1.7 Share-Based Compensation — — (0.1) (0.9) Other 0.2 (0.8) 0.8 (5.4) Total Income Tax Benefit $(8.5) $(4.8) $(22.3) $(1.9) For the six months ended June 30, 2020, the effective tax rate was a benefit of 37.8 percent (benefit of 1.8 percent for the six months ended June 30, 2019). The effective tax rate for 2020 was primarily impacted by production tax credits. The effective tax rate for 2019 was primarily impacted by production tax credits and the gain on sale of U.S. Water Services. Uncertain Tax Positions. As of June 30, 2020, we had gross unrecognized tax benefits of $1.4 million ($1.4 million as of December 31, 2019). Of the total gross unrecognized tax benefits, $0.6 million represents the amount of unrecognized tax benefits included on the Consolidated Balance Sheet that, if recognized, would favorably impact the effective income tax rate. The unrecognized tax benefit amounts have been presented as reductions to the tax benefits associated with NOL and tax credit carryforwards on the Consolidated Balance Sheet. ALLETE and its subsidiaries file a consolidated federal income tax return as well as combined and separate state income tax returns in various jurisdictions. ALLETE has no open federal or state audits, and is no longer subject to federal examination for years before 2016, or state examination for years before 2015. |
Pension and Other Postretiremen
Pension and Other Postretirement Benefit Plans | 6 Months Ended |
Jun. 30, 2020 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Benefit Plans [Text Block] | PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS Pension Other Components of Net Periodic Benefit Cost (Credit) 2020 2019 2020 2019 Millions Quarter Ended June 30, Service Cost $2.7 $2.4 $0.9 $1.0 Non-Service Cost Components (a) Interest Cost 7.0 8.0 1.2 1.9 Expected Return on Plan Assets (10.7) (11.1) (2.4) (2.7) Amortization of Prior Service Credits (0.1) (0.1) (2.0) (0.4) Amortization of Net Loss 3.2 1.9 0.2 0.1 Net Periodic Benefit Cost (Credit) $2.1 $1.1 $(2.1) $(0.1) Six Months Ended June 30, Service Cost $5.3 $4.7 $1.7 $2.0 Non-Service Cost Components (a) Interest Cost 14.0 16.0 2.5 3.8 Expected Return on Plan Assets (21.4) (22.1) (4.9) (5.3) Amortization of Prior Service Credits (0.1) (0.1) (4.0) (0.8) Amortization of Net Loss 6.4 3.7 0.5 0.2 Net Periodic Benefit Cost (Credit) $4.2 $2.2 $(4.2) $(0.1) (a) These components of net periodic benefit cost (credit) are included in the line item “Other” under Other Income (Expense) on the Consolidated Statement of Income. Employer Contributions. For the six months ended June 30, 2020, we contributed $10.7 million in cash to the defined benefit pension plans ($10.4 million for the six months ended June 30, 2019); we do not expect to make additional contributions to our defined benefit pension plans in 2020. For the six months ended June 30, 2020, and 2019, we made no contributions to our other postretirement benefit plans; we do not expect to make any contributions to our other postretirement benefit plans in 2020. |
Business Segments
Business Segments | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Business Segments [Text Block] | BUSINESS SEGMENTS We present three reportable segments: Regulated Operations, ALLETE Clean Energy and U.S. Water Services. We measure performance of our operations through budgeting and monitoring of contributions to consolidated net income by each business segment. Regulated Operations includes three operating segments which consist of our regulated utilities, Minnesota Power and SWL&P, as well as our investment in ATC. ALLETE Clean Energy is our business focused on developing, acquiring and operating clean and renewable energy projects. U.S. Water Services was our integrated water management company, which is reflected in operating results until it was sold in March 2019. We also present Corporate and Other which includes two operating segments, BNI Energy, our coal mining operations in North Dakota, and ALLETE Properties, our legacy Florida real estate investment, along with our investment in Nobles 2, other business development and corporate expenditures, unallocated interest expense, a small amount of non-rate base generation, approximately 4,000 acres of land in Minnesota, and earnings on cash and investments. NOTE 10. BUSINESS SEGMENTS (Continued) Quarter Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Millions Operating Revenue Regulated Operations Residential $27.4 $29.2 $68.3 $74.4 Commercial 28.8 34.9 66.1 73.8 Municipal 9.0 12.2 19.3 27.6 Industrial 88.0 120.3 206.8 241.9 Other Power Suppliers 27.4 35.2 65.7 74.6 Other 20.2 18.0 39.9 39.7 Total Regulated Operations 200.8 249.8 466.1 532.0 ALLETE Clean Energy Long-term PSA 14.8 12.5 32.1 27.1 Other 2.8 2.9 5.6 5.8 Total ALLETE Clean Energy 17.6 15.4 37.7 32.9 U.S. Water Services (a) Point-in-Time — — — 19.0 Contract — — — 9.2 Capital Project — — — 5.2 Total U.S. Water Services — — — 33.4 Corporate and Other Long-term Contract 22.5 21.2 44.9 41.4 Other 2.3 4.0 6.1 7.9 Total Corporate and Other 24.8 25.2 51.0 49.3 Total Operating Revenue $243.2 $290.4 $554.8 $647.6 Net Income (Loss) Attributable to ALLETE Regulated Operations $11.1 $30.3 $68.6 $81.8 ALLETE Clean Energy 4.0 1.9 15.7 7.7 U.S. Water Services (a) — — — (1.1) Corporate and Other (a) 5.0 2.0 2.1 16.3 Total Net Income Attributable to ALLETE $20.1 $34.2 $86.4 $104.7 (a) In March 2019, ALLETE sold U.S. Water Services. The Company recognized a gain on the sale of $11.1 million after-tax during the six months ended June 30, 2019, which is reflected in Corporate and Other. June 30, December 31, Millions Assets Regulated Operations $4,139.8 $4,130.8 ALLETE Clean Energy 1,250.2 1,001.5 Corporate and Other 370.4 350.5 Total Assets $5,760.4 $5,482.8 |
Operations and Significant Ac_3
Operations and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Cash and Cash Equivalents, Policy [Policy Text Block] | We consider all investments purchased with original maturities of three months or less to be cash equivalents. |
Inventories – Net [Policy Text Block] | Inventories are stated at the lower of cost or net realizable value. Inventories in our Regulated Operations segment are carried at an average cost or first-in, first-out basis. Inventories in our ALLETE Clean Energy segment and Corporate and Other businesses are carried at an average cost, first-in, first-out or specific identification basis. |
New Accounting Standards [Policy Text Block] | New Accounting Pronouncements.Credit Losses. In 2016, the FASB issued an accounting standard update that requires entities to recognize an allowance for expected credit losses for financial instruments within its scope. Examples of financial instruments within the scope include trade receivables, certain financial guarantees, and held-to-maturity debt securities. The allowance for expected credit losses should be based on historical information, current conditions and reasonable and supportable forecasts. The new standard also revises the other-than-temporary impairment model for available-for-sale debt securities. The new guidance became effective January 1, 2020, and was adopted by the Company in the first quarter of 2020. Adoption of this standard did not have a material impact on our Consolidated Financial Statements. |
Regulatory Assets and Liabilities [Policy Text Block] | With the exception of the regulatory asset for Boswell Units 1 and 2 net plant and equipment, no other regulatory assets are currently earning a return. The recovery, refund or credit to rates for these regulatory assets and liabilities will occur over the periods either specified by the applicable regulatory authority or over the corresponding period related to the asset or liability. |
Equity Method Investments [Policy Text Block] | We account for our investment in ATC under the equity method of accounting.We account for our investment in Nobles 2 under the equity method of accounting. |
Fair Value Measurement [Policy Text Block] | We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable. We primarily apply the market approach for recurring fair value measurements and endeavor to utilize the best available information. Accordingly, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs, which are used to measure fair value, are prioritized through the fair value hierarchy. Each asset and liability is classified based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of these assets and liabilities and their placement within the fair value hierarchy levels.Non-financial assets such as equity method investments, land inventory, and property, plant and equipment are measured at fair value when there is an indicator of impairment and recorded at fair value only when an impairment is recognized. |
Power Purchase Agreements [Policy Text Block] | Our long-term PPAs have been evaluated under the accounting guidance for variable interest entities. We have determined that either we have no variable interest in the PPAs or, where we do have variable interests, we are not the primary beneficiary; therefore, consolidation is not required. These conclusions are based on the fact that we do not have both control over activities that are most significant to the entity and an obligation to absorb losses or receive benefits from the entity’s performance. Our financial exposure relating to these PPAs is limited to our capacity and energy payments. |
Environmental Accruals [Policy Text Block] | We review environmental matters on a quarterly basis. Accruals for environmental matters are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based on current law and existing technologies. Accruals are adjusted as assessment and remediation efforts progress, or as additional technical or legal information becomes available. Accruals for environmental liabilities are included in the Consolidated Balance Sheet at undiscounted amounts and exclude claims for recoveries from insurance or other third parties. Costs related to environmental contamination treatment and cleanup are expensed unless recoverable in rates from customers. |
Earnings Per Share [Policy Text Block] | We compute basic earnings per share using the weighted average number of shares of common stock outstanding during each period. The difference between basic and diluted earnings per share, if any, arises from non-vested restricted stock units and performance share awards granted under our Executive Long-Term Incentive Compensation Plan. |
Income Tax [Policy Text Block] | The Company's tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items arising in that quarter. In each quarter, the Company updates its estimate of the annual effective tax rate and if the estimated annual effective tax rate changes, the Company would make a cumulative adjustment in that quarter. |
Uncertain Tax Positions [Policy Text Block] | The unrecognized tax benefit amounts have been presented as reductions to the tax benefits associated with NOL and tax credit carryforwards on the Consolidated Balance Sheet. |
Business Segments [Policy Text Block] | We present three reportable segments: Regulated Operations, ALLETE Clean Energy and U.S. Water Services. We measure performance of our operations through budgeting and monitoring of contributions to consolidated net income by each business segment. |
Operations and Significant Ac_4
Operations and Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Cash, Cash Equivalents and Restricted Cash [Table Text Block] | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheet that aggregate to the amounts presented in the Consolidated Statement of Cash Flows. Cash, Cash Equivalents and Restricted Cash June 30, December 31, June 30, December 31, Millions Cash and Cash Equivalents $25.7 $69.3 $203.1 $69.1 Restricted Cash included in Prepayments and Other 7.3 2.8 0.9 1.3 Restricted Cash included in Other Non-Current Assets 4.4 20.4 2.6 8.6 Cash, Cash Equivalents and Restricted Cash on the Consolidated Statement of Cash Flows $37.4 $92.5 $206.6 $79.0 |
Inventories – Net [Table Text Block] | Inventories – Net June 30, December 31, Millions Fuel (a) $33.5 $25.9 Materials and Supplies 48.5 46.9 Total Inventories – Net $82.0 $72.8 (a) Fuel consists primarily of coal inventory at Minnesota Power. |
Other Non-Current Assets [Table Text Block] | Other Non-Current Assets June 30, December 31, Millions Contract Assets (a) $26.7 $28.0 Operating Lease Right-of-use Assets 25.4 28.6 ALLETE Properties 21.5 21.9 Restricted Cash 4.4 20.4 Other Postretirement Benefit Plans 38.4 37.5 Other 84.7 81.8 Total Other Non-Current Assets $201.1 $218.2 |
Other Current Liabilities [Table Text Block] | Other Current Liabilities June 30, December 31, Millions PSAs $12.4 $12.3 Provision for Interim Rate Refund (a) 11.7 — Operating Lease Liabilities 6.6 6.9 Other 34.7 41.2 Total Other Current Liabilities $65.4 $60.4 (a) Provision for Interim Rate Refund represents reserves for interim rates resulting from the MPUC’s approval of Minnesota Power’s petition and proposal to resolve and withdraw its rate case. (See Note 2. Regulatory Matters.) |
Other Non-Current Liabilities [Table Text Block] | Other Non-Current Liabilities June 30, December 31, Millions Asset Retirement Obligation $164.8 $160.3 PSAs 58.3 64.6 Operating Lease Liabilities 18.8 21.8 Other 46.2 46.3 Total Other Non-Current Liabilities $288.1 $293.0 |
Other Income [Table Text Block] | Other Income Six Months Ended June 30, 2020 2019 Millions Pension and Other Postretirement Benefit Plan Non-Service Credits (a) $4.8 $3.6 Interest and Investment Income (Loss) (0.5) 2.5 AFUDC - Equity 1.4 1.3 Gain on Land Sales 0.1 2.0 Other 0.4 2.2 Total Other Income $6.2 $11.6 |
Supplemental Statement of Cash Flows Information [Table Text Block] | Supplemental Statement of Cash Flows Information. Six Months Ended June 30, 2020 2019 Millions Cash Paid for Interest – Net of Amounts Capitalized $30.9 $33.8 Recognition of Right-of-use Assets and Lease Liabilities — $31.2 Noncash Investing and Financing Activities Increase (Decrease) in Accounts Payable for Capital Additions to Property, Plant and Equipment $(67.5) $21.1 Capitalized Asset Retirement Costs $2.1 $1.4 AFUDC–Equity $1.4 $1.3 |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Regulated Operations [Abstract] | |
Regulatory Assets and Liabilities [Table Text Block] | Regulatory Assets and Liabilities June 30, December 31, Millions Non-Current Regulatory Assets Defined Benefit Pension and Other Postretirement Benefit Plans $208.0 $212.9 Income Taxes 122.1 123.4 Cost Recovery Riders 39.3 24.7 Asset Retirement Obligations 31.7 32.0 Manufactured Gas Plant 8.3 8.2 Boswell Units 1 and 2 Net Plant and Equipment 7.8 10.7 PPACA Income Tax Deferral 4.7 4.8 Other 2.8 3.8 Total Non-Current Regulatory Assets $424.7 $420.5 Current Regulatory Liabilities (a) Provision for Interim Rate Refund (b) $11.7 — Transmission Formula Rates Refund 0.8 $1.7 Other 1.7 0.2 Total Current Regulatory Liabilities 14.2 1.9 Non-Current Regulatory Liabilities Income Taxes 395.5 407.2 Wholesale and Retail Contra AFUDC 87.4 79.3 Plant Removal Obligations 39.3 35.5 Defined Benefit Pension and Other Postretirement Benefit Plans 14.1 17.0 North Dakota Investment Tax Credits 12.2 12.3 Fuel Adjustment Clause (c) 12.2 — Conservation Improvement Program 5.4 5.4 Other 3.5 3.6 Total Non-Current Regulatory Liabilities 569.6 560.3 Total Regulatory Liabilities $583.8 $562.2 (a) Current regulatory liabilities are presented within Other Current Liabilities on the Consolidated Balance Sheet. (b) Provision for Interim Rate Refund represents reserves for interim rates resulting from the MPUC’s approval of Minnesota Power’s petition and proposal to resolve and withdraw its rate case. This amount is expected to be refunded to Minnesota Power regulated retail customers in the third quarter of 2020. (See 2020 Minnesota General Rate Case.) (c) Fuel adjustment clause regulatory liability represents the amount expected to be refunded to customers for the over-collection of fuel adjustment clause recoveries. (See Fuel Adjustment Clause Reform.) |
Equity Investments (Tables)
Equity Investments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | ALLETE’s Investment in ATC Millions Equity Investment Balance as of December 31, 2019 $141.6 Cash Investments 1.1 Equity in ATC Earnings (a) 11.6 Distributed ATC Earnings (9.4) Amortization of the Remeasurement of Deferred Income Taxes 0.7 Equity Investment Balance as of June 30, 2020 $145.6 (a) Equity in ATC Earnings includes $1.2 million of additional earnings resulting from the FERC’s May 21, 2020, order increasing ATC’s authorized return on equity to 10.52 percent including an incentive adder for participation in a regional transmission organization. |
Fair Value (Tables)
Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Recurring Fair Value Measures [Table Text Block] | Fair Value as of June 30, 2020 Recurring Fair Value Measures Level 1 Level 2 Level 3 Total Millions Assets Investments (a) Available-for-sale – Equity Securities $10.1 — — $10.1 Available-for-sale – Corporate and Governmental Debt Securities (b) — $9.8 — 9.8 Cash Equivalents 0.8 — — 0.8 Total Fair Value of Assets $10.9 $9.8 — $20.7 Liabilities Deferred Compensation (c) — $20.0 — $20.0 Total Fair Value of Liabilities — $20.0 — $20.0 Total Net Fair Value of Assets (Liabilities) $10.9 $(10.2) — $0.7 Fair Value as of December 31, 2019 Recurring Fair Value Measures Level 1 Level 2 Level 3 Total Millions Assets Investments (a) Available-for-sale – Equity Securities $11.1 — — $11.1 Available-for-sale – Corporate and Governmental Debt Securities — $9.7 — 9.7 Cash Equivalents 0.9 — — 0.9 Total Fair Value of Assets $12.0 $9.7 — $21.7 Liabilities Deferred Compensation (c) — $21.2 — $21.2 Total Fair Value of Liabilities — $21.2 — $21.2 Total Net Fair Value of Assets (Liabilities) $12.0 $(11.5) — $0.5 (a) Included in Other Non-Current Assets on the Consolidated Balance Sheet. (b) As of June 30, 2020, the aggregate amount of available-for-sale corporate and governmental debt securities maturing in one year or less was $3.8 million, in one year to less than three years was $5.0 million, in three years to less than five years was $1.0 million and in five or more years was zero. |
Financial Instruments [Table Text Block] | Financial Instruments Carrying Amount Fair Value Millions Short-Term and Long-Term Debt June 30, 2020 $1,899.0 $2,163.4 December 31, 2019 $1,622.6 $1,791.8 |
Short-Term and Long-Term Debt (
Short-Term and Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Short-Term and Long-Term Debt [Table Text Block] | The following tables present the Company’s short-term and long-term debt as of June 30, 2020, and December 31, 2019: June 30, 2020 Principal Unamortized Debt Issuance Costs Total Millions Short-Term Debt $510.0 $(0.3) $509.7 Long-Term Debt 1,389.0 (8.0) 1,381.0 Total Debt $1,899.0 $(8.3) $1,890.7 December 31, 2019 Principal Unamortized Debt Issuance Costs Total Millions Short-Term Debt $213.3 $(0.4) $212.9 Long-Term Debt 1,409.3 (8.4) 1,400.9 Total Debt $1,622.6 $(8.8) $1,613.8 |
Schedule of Long-term Debt Instruments [Table Text Block] | On March 26, 2020, ALLETE agreed to sell first mortgage bonds (Bonds) to certain institutional buyers in the private placement market, which were issued on August 3, 2020, in two series as follows: Maturity Date Principal Amount Interest Rate August 1, 2030 $46 Million 2.50% August 1, 2050 $94 Million 3.30% |
Earnings Per Share and Common_2
Earnings Per Share and Common Stock (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Reconciliation of Basic and Diluted Earnings Per Share [Table Text Block] | 2020 2019 Reconciliation of Basic and Diluted Dilutive Dilutive Earnings Per Share Basic Securities Diluted Basic Securities Diluted Millions Except Per Share Amounts Quarter ended June 30, Net Income Attributable to ALLETE $20.1 $20.1 $34.2 $34.2 Average Common Shares 51.8 0.1 51.9 51.6 0.1 51.7 Earnings Per Share $0.39 $0.39 $0.66 $0.66 Six Months Ended June 30, Net Income Attributable to ALLETE $86.4 $86.4 $104.7 $104.7 Average Common Shares 51.8 — 51.8 51.6 0.1 51.7 Earnings Per Share $1.67 $1.67 $2.03 $2.02 |
Income Tax Expense (Tables)
Income Tax Expense (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Tax Expense [Table Text Block] | Quarter Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Millions Current Income Tax Expense (a) Federal — — — — State — $(0.1) — $0.2 Total Current Income Tax Expense (Benefit) — $(0.1) — $0.2 Deferred Income Tax Expense (Benefit) Federal (b) $(8.6) $(7.1) $(26.2) $(16.8) State (c) 0.2 2.5 4.2 15.0 Investment Tax Credit Amortization (0.1) (0.1) (0.3) (0.3) Total Deferred Income Tax Benefit $(8.5) $(4.7) $(22.3) $(2.1) Total Income Tax Benefit $(8.5) $(4.8) $(22.3) $(1.9) (a) For each of the six months ended June 30, 2020 and 2019, the federal and state current tax expense was minimal due to NOLs which resulted from the bonus depreciation provisions of certain tax legislation. Federal and state NOLs are being carried forward to offset current and future taxable income. (b) For each of the six months ended June 30, 2020 and 2019, the federal income tax benefit is primarily due to production tax credits. (c) For the six months ended June 30, 2019, the state income tax expense is primarily related to the sale of U.S. Water Services. |
Reconciliation of Taxes from Federal Statutory Rate to Total Income Tax Expense [Table Text Block] | Quarter Ended Six Months Ended Reconciliation of Taxes from Federal Statutory June 30, June 30, Rate to Total Income Tax Expense 2020 2019 2020 2019 Millions Income Before Income Taxes $8.4 $29.4 $59.1 $102.8 Statutory Federal Income Tax Rate 21 % 21 % 21 % 21 % Income Taxes Computed at Statutory Federal Rate $1.7 $6.2 $12.4 $21.6 Increase (Decrease) in Income Tax Due to: State Income Taxes – Net of Federal Income Tax Benefit 0.1 1.9 3.3 12.0 Production Tax Credits (9.6) (9.8) (33.4) (26.1) Regulatory Differences – Excess Deferred Tax (0.9) (1.6) (5.3) (4.8) U.S. Water Services Sale of Stock Basis Difference — (0.7) — 1.7 Share-Based Compensation — — (0.1) (0.9) Other 0.2 (0.8) 0.8 (5.4) Total Income Tax Benefit $(8.5) $(4.8) $(22.3) $(1.9) |
Pension and Other Postretirem_2
Pension and Other Postretirement Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Expense (Income) [Table Text Block] | Pension Other Components of Net Periodic Benefit Cost (Credit) 2020 2019 2020 2019 Millions Quarter Ended June 30, Service Cost $2.7 $2.4 $0.9 $1.0 Non-Service Cost Components (a) Interest Cost 7.0 8.0 1.2 1.9 Expected Return on Plan Assets (10.7) (11.1) (2.4) (2.7) Amortization of Prior Service Credits (0.1) (0.1) (2.0) (0.4) Amortization of Net Loss 3.2 1.9 0.2 0.1 Net Periodic Benefit Cost (Credit) $2.1 $1.1 $(2.1) $(0.1) Six Months Ended June 30, Service Cost $5.3 $4.7 $1.7 $2.0 Non-Service Cost Components (a) Interest Cost 14.0 16.0 2.5 3.8 Expected Return on Plan Assets (21.4) (22.1) (4.9) (5.3) Amortization of Prior Service Credits (0.1) (0.1) (4.0) (0.8) Amortization of Net Loss 6.4 3.7 0.5 0.2 Net Periodic Benefit Cost (Credit) $4.2 $2.2 $(4.2) $(0.1) |
Business Segments (Tables)
Business Segments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Business Segments [Table Text Block] | Quarter Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Millions Operating Revenue Regulated Operations Residential $27.4 $29.2 $68.3 $74.4 Commercial 28.8 34.9 66.1 73.8 Municipal 9.0 12.2 19.3 27.6 Industrial 88.0 120.3 206.8 241.9 Other Power Suppliers 27.4 35.2 65.7 74.6 Other 20.2 18.0 39.9 39.7 Total Regulated Operations 200.8 249.8 466.1 532.0 ALLETE Clean Energy Long-term PSA 14.8 12.5 32.1 27.1 Other 2.8 2.9 5.6 5.8 Total ALLETE Clean Energy 17.6 15.4 37.7 32.9 U.S. Water Services (a) Point-in-Time — — — 19.0 Contract — — — 9.2 Capital Project — — — 5.2 Total U.S. Water Services — — — 33.4 Corporate and Other Long-term Contract 22.5 21.2 44.9 41.4 Other 2.3 4.0 6.1 7.9 Total Corporate and Other 24.8 25.2 51.0 49.3 Total Operating Revenue $243.2 $290.4 $554.8 $647.6 Net Income (Loss) Attributable to ALLETE Regulated Operations $11.1 $30.3 $68.6 $81.8 ALLETE Clean Energy 4.0 1.9 15.7 7.7 U.S. Water Services (a) — — — (1.1) Corporate and Other (a) 5.0 2.0 2.1 16.3 Total Net Income Attributable to ALLETE $20.1 $34.2 $86.4 $104.7 (a) In March 2019, ALLETE sold U.S. Water Services. The Company recognized a gain on the sale of $11.1 million after-tax during the six months ended June 30, 2019, which is reflected in Corporate and Other. June 30, December 31, Millions Assets Regulated Operations $4,139.8 $4,130.8 ALLETE Clean Energy 1,250.2 1,001.5 Corporate and Other 370.4 350.5 Total Assets $5,760.4 $5,482.8 |
Operations and Significant Ac_5
Operations and Significant Accounting Policies (Details) - USD ($) $ in Millions | 6 Months Ended | ||||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Recognition of Right-of-use Assets and Lease Liabilities | $ 0 | $ 31.2 | |||
Cash, Cash Equivalents and Restricted Cash [Abstract] | |||||
Cash and Cash Equivalents | 25.7 | 203.1 | $ 69.3 | $ 69.1 | |
Restricted Cash included in Prepayments and Other | 7.3 | 0.9 | 2.8 | 1.3 | |
Restricted Cash, Non-Current | 4.4 | 2.6 | 20.4 | 8.6 | |
Total Cash, Cash Equivalents and Restricted Cash | 37.4 | 206.6 | 92.5 | 79 | |
Inventories – Net [Abstract] | |||||
Fuel | [1] | 33.5 | 25.9 | ||
Materials and Supplies | 48.5 | 46.9 | |||
Total Inventories – Net | 82 | 72.8 | |||
Other Non-Current Assets [Abstract] | |||||
Contract Assets | [2] | 26.7 | 28 | ||
Operating Lease, Right-of-Use Asset | 25.4 | 28.6 | |||
ALLETE Properties | 21.5 | 21.9 | |||
Restricted Cash, Non-Current | 4.4 | $ 2.6 | 20.4 | $ 8.6 | |
Other Postretirement Benefit Plans | 38.4 | 37.5 | |||
Other | 84.7 | 81.8 | |||
Total Other Non-Current Assets | 201.1 | 218.2 | |||
Other Current Liabilites [Abstract] | |||||
PSAs | 12.4 | 12.3 | |||
Provision for Interim Rate Refund | [3] | 11.7 | 0 | ||
Operating Lease Liabilities | 6.6 | 6.9 | |||
Other | 34.7 | 41.2 | |||
Total Other Current Liabilities | 65.4 | 60.4 | |||
Other Non-Current Liabilities [Abstract] | |||||
Asset Retirement Obligation | 164.8 | 160.3 | |||
PSAs | 58.3 | 64.6 | |||
Operating Lease Liabilities | 18.8 | 21.8 | |||
Other | 46.2 | 46.3 | |||
Total Other Non-Current Liabilities | $ 288.1 | $ 293 | |||
[1] | Fuel consists primarily of coal inventory at Minnesota Power. | ||||
[2] | Contract Assets consist of payments made to customers as an incentive to execute or extend service agreements. The contract payments are being amortized over the term of the respective agreements as a reduction to revenue. | ||||
[3] | Provision for Interim Rate Refund represents reserves for interim rates resulting from the MPUC’s approval of Minnesota Power’s petition and proposal to resolve and withdraw its rate case. (See Note 2. Regulatory Matters.) |
Operations and Significant Ac_6
Operations and Significant Accounting Policies - Other Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | ||
Other Income (Expense) - Other [Line Items] | |||||
Total Other Income | $ 5.2 | $ 4.2 | $ 6.2 | $ 11.6 | |
Pension and Other Postretirement Benefit Plans Non-Service Credit [Member] | |||||
Other Income (Expense) - Other [Line Items] | |||||
Total Other Income | [1] | 4.8 | 3.6 | ||
Interest and Investment Income (Loss) [Member] | |||||
Other Income (Expense) - Other [Line Items] | |||||
Total Other Income | (0.5) | 2.5 | |||
AFUDC - Equity [Member] | |||||
Other Income (Expense) - Other [Line Items] | |||||
Total Other Income | 1.4 | 1.3 | |||
Gain on Land Sales [Member] | |||||
Other Income (Expense) - Other [Line Items] | |||||
Total Other Income | 0.1 | 2 | |||
Other [Member] | |||||
Other Income (Expense) - Other [Line Items] | |||||
Total Other Income | $ 0.4 | $ 2.2 | |||
[1] | These are components of net periodic pension and other postretirement benefit cost other than service cost. (See Note 9. Pension and Other Postretirement Benefit Plans.) |
Operations and Significant Ac_7
Operations and Significant Accounting Policies - Sale of U.S. Water Services (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Business Segments [Line Items] | |
Proceeds from Sale of U.S. Water Services - Net of Transaction Costs and Cash Retained | $ 270 |
Gain on Sale of U.S. Water Services, After-tax | $ 13.2 |
Operations and Significant Ac_8
Operations and Significant Accounting Policies - ALLETE Clean Energy Asset Acquisition (Details) - Caddo [Member] - ALLETE Clean Energy [Member] $ in Millions | 6 Months Ended | |
Jun. 30, 2020MW | Mar. 10, 2020USD ($) | |
Business Segments [Line Items] | ||
Cash Paid for Assets Acquired | $ | $ 8 | |
Generating Capacity Under Development (MW) | MW | 300 |
Operations and Significant Ac_9
Operations and Significant Accounting Policies - Non-Controlling Interest (Details) $ in Millions | Apr. 29, 2020USD ($) | Apr. 16, 2020MW | Jun. 30, 2020USD ($)MW | Jun. 30, 2019USD ($) |
Non-Controlling Interest Details [Line Items] | ||||
Proceeds from Noncontrolling Interests | $ | $ 67.8 | $ 0 | ||
South Peak [Member] | ||||
Non-Controlling Interest Details [Line Items] | ||||
Proceeds from Noncontrolling Interests | $ | $ 67.8 | |||
Generating Capacity Subject to Tax Equity Financing | MW | 80 | 80 | ||
Glen Ullin Energy Center [Member] | ||||
Non-Controlling Interest Details [Line Items] | ||||
Generating Capacity Subject to Tax Equity Financing | MW | 106 |
Regulatory Matters - Electric R
Regulatory Matters - Electric Rates (Details) - USD ($) $ in Millions | May 01, 2020 | Nov. 01, 2019 | Apr. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Regulatory Matters [Line Items] | |||||||
Public Utilities Reserve for Interim Rates | [1] | $ 11.7 | $ 0 | ||||
Electric Rates [Member] | MPUC [Member] | Minnesota Cost Recovery Riders [Member] | Minnesota Power [Member] | Retail Customers [Member] | |||||||
Regulatory Matters [Line Items] | |||||||
Revenue from Cost Recovery Riders | 14.9 | $ 17.4 | |||||
Electric Rates [Member] | MPUC [Member] | 2020 Minnesota General Rate Case [Member] | Minnesota Power [Member] | Retail Customers [Member] | |||||||
Regulatory Matters [Line Items] | |||||||
Annual Additional Revenue Generated from Requested Final Rate Increase | $ 66 | ||||||
Requested Rate Increase Percent | 10.60% | ||||||
Interim Rate Increase | $ 36.1 | ||||||
Requested Return on Equity | 10.05% | ||||||
Requested Equity Capital Structure | 53.81% | ||||||
Ongoing Customer Rate Increase | 4.10% | ||||||
Public Utilities, Interim Rate Increase (Decrease), Percentage | 5.80% | ||||||
Public Utilities Reserve for Interim Rates | $ 11.7 | ||||||
[1] | Provision for Interim Rate Refund represents reserves for interim rates resulting from the MPUC’s approval of Minnesota Power’s petition and proposal to resolve and withdraw its rate case. (See Note 2. Regulatory Matters.) |
Regulatory Matters - Nemadji Tr
Regulatory Matters - Nemadji Trail Energy Center (Details) $ in Millions | Jul. 28, 2017MW | Jun. 30, 2020USD ($) |
Nemadji Trail Energy Center [Member] | Maximum [Member] | ||
Regulatory Matters [Line Items] | ||
Estimated Capital Expenditures, Including Past Expenditures | $ | $ 700 | |
ALLETE, Inc. [Member] | Nemadji Trail Energy Center [Member] | ||
Regulatory Matters [Line Items] | ||
Estimated Capital Expenditures, Including Past Expenditures | $ | 350 | |
ALLETE, Inc. [Member] | Nemadji Trail Energy Center [Member] | Maximum [Member] | ||
Regulatory Matters [Line Items] | ||
Total Project Costs Incurred to Date | $ | $ 14 | |
MPUC [Member] | Resource Package [Member] | Natural Gas-fired [Member] | Combined-Cycle Natural Gas-Fired Generating Facility [Member] | Minimum [Member] | Jointly Owned by ALLETE and Dairyland Power Cooperative [Member] | Natural Gas PPA [Member] | Jointly Owned Electricity Generation Plant [Member] | ||
Regulatory Matters [Line Items] | ||
Generating Capacity to be Jointly Owned (MW) | MW | 525 | |
MPUC [Member] | Resource Package [Member] | Natural Gas-fired [Member] | Combined-Cycle Natural Gas-Fired Generating Facility [Member] | Maximum [Member] | Jointly Owned by ALLETE and Dairyland Power Cooperative [Member] | Natural Gas PPA [Member] | Jointly Owned Electricity Generation Plant [Member] | ||
Regulatory Matters [Line Items] | ||
Generating Capacity to be Jointly Owned (MW) | MW | 550 | |
MPUC [Member] | Resource Package [Member] | Minnesota Power [Member] | Natural Gas PPA [Member] | ||
Regulatory Matters [Line Items] | ||
Output Being Purchased (MW) | MW | 250 | |
MPUC [Member] | Resource Package [Member] | Minnesota Power [Member] | Natural Gas-fired [Member] | Natural Gas PPA [Member] | ||
Regulatory Matters [Line Items] | ||
Expected Output Entitlement (Percent) | 50.00% |
Regulated Operations - Conserva
Regulated Operations - Conservation Improvement Program (Details) $ in Millions | Jun. 30, 2020USD ($) |
Regulated Operations [Abstract] | |
Conservation Improvement Program Goal, Next Fiscal Year | $ 10.5 |
Conservation Improvement Program Goal, In 2 Years | 10.7 |
Conservation Improvement Program Goal, In 3 Years | $ 10.9 |
Regulatory Matters - MISO Retur
Regulatory Matters - MISO Return on Equity Complaint (Details) - FERC [Member] | Jun. 30, 2020 | Dec. 31, 2019 |
Loss Contingencies [Line Items] | ||
FERC Authorized Return on Common Equity | 10.02% | 9.88% |
FERC Authorized Return on Equity, Including Incentive Adder | 10.52% | 10.38% |
Regulated Operations - Minnesot
Regulated Operations - Minnesota Solar Energy Standard (Details) $ in Millions | Jun. 30, 2020USD ($)MW |
Regulated Operations [Abstract] | |
Estimated Investment Amount | $ | $ 40 |
Estimated Generation from Projects Under Development | MW | 20 |
Regulatory Matters - Regulatory
Regulatory Matters - Regulatory Assets and Liabilities (Details) - USD ($) $ in Millions | 6 Months Ended | |||
Jun. 30, 2020 | Dec. 31, 2019 | |||
Regulatory Assets and Liabilities [Line Items] | ||||
Regulatory Assets Currently Earning a Return | With the exception of the regulatory asset for Boswell Units 1 and 2 net plant and equipment, no other regulatory assets are currently earning a return. | |||
Non-Current Regulatory Assets | $ 424.7 | $ 420.5 | ||
Current Regulatory Liabilities | [1] | 14.2 | 1.9 | |
Non-Current Regulatory Liabilities | 569.6 | 560.3 | ||
Total Regulatory Liabilities | 583.8 | 562.2 | ||
Transmission Formula Rates [Member] | ||||
Regulatory Assets and Liabilities [Line Items] | ||||
Current Regulatory Liabilities | [1] | 0.8 | 1.7 | |
Income Taxes [Member] | ||||
Regulatory Assets and Liabilities [Line Items] | ||||
Non-Current Regulatory Liabilities | 395.5 | 407.2 | ||
Wholesale and Retail Contra AFUDC [Member] | ||||
Regulatory Assets and Liabilities [Line Items] | ||||
Non-Current Regulatory Liabilities | 87.4 | 79.3 | ||
Plant Removal Obligations [Member] | ||||
Regulatory Assets and Liabilities [Line Items] | ||||
Non-Current Regulatory Liabilities | 39.3 | 35.5 | ||
Pension and Other Postretirement Plan Costs [Member] | ||||
Regulatory Assets and Liabilities [Line Items] | ||||
Non-Current Regulatory Liabilities | 14.1 | 17 | ||
North Dakota Investment Tax Credits [Member] | ||||
Regulatory Assets and Liabilities [Line Items] | ||||
Non-Current Regulatory Liabilities | 12.2 | 12.3 | ||
Fuel Adjustment Clause [Member] | ||||
Regulatory Assets and Liabilities [Line Items] | ||||
Non-Current Regulatory Liabilities | [2] | 12.2 | 0 | |
Conservation Improvement Program [Member] | ||||
Regulatory Assets and Liabilities [Line Items] | ||||
Non-Current Regulatory Liabilities | 5.4 | 5.4 | ||
Other | ||||
Regulatory Assets and Liabilities [Line Items] | ||||
Current Regulatory Liabilities | [1] | 1.7 | 0.2 | |
Non-Current Regulatory Liabilities | 3.5 | 3.6 | ||
Public Utilities Reserve for Interim Rates | ||||
Regulatory Assets and Liabilities [Line Items] | ||||
Current Regulatory Liabilities | [2] | 11.7 | [1] | 0 |
Pension and Other Postretirement Plan Costs [Member] | ||||
Regulatory Assets and Liabilities [Line Items] | ||||
Non-Current Regulatory Assets | 208 | 212.9 | ||
Income Taxes [Member] | ||||
Regulatory Assets and Liabilities [Line Items] | ||||
Non-Current Regulatory Assets | 122.1 | 123.4 | ||
Asset Retirement Obligations [Member] | ||||
Regulatory Assets and Liabilities [Line Items] | ||||
Non-Current Regulatory Assets | 31.7 | 32 | ||
Boswell 1 & 2 [Member] | ||||
Regulatory Assets and Liabilities [Line Items] | ||||
Non-Current Regulatory Assets | 7.8 | 10.7 | ||
Cost Recovery Riders [Member] | ||||
Regulatory Assets and Liabilities [Line Items] | ||||
Non-Current Regulatory Assets | 39.3 | 24.7 | ||
Manufactured Gas Plant [Member] | ||||
Regulatory Assets and Liabilities [Line Items] | ||||
Non-Current Regulatory Assets | 8.3 | 8.2 | ||
PPACA Income Tax Deferral [Member] | ||||
Regulatory Assets and Liabilities [Line Items] | ||||
Non-Current Regulatory Assets | 4.7 | 4.8 | ||
Other | ||||
Regulatory Assets and Liabilities [Line Items] | ||||
Non-Current Regulatory Assets | $ 2.8 | $ 3.8 | ||
[1] | Current regulatory liabilities are presented within Other Current Liabilities on the Consolidated Balance Sheet. (b) Provision for Interim Rate Refund represents reserves for interim rates resulting from the MPUC’s approval of Minnesota Power’s petition and proposal to resolve and withdraw its rate case. This amount is expected to be refunded to Minnesota Power regulated retail customers in the third quarter of 2020. (See 2020 Minnesota General Rate Case.) | |||
[2] | Fuel adjustment clause regulatory liability represents the amount expected to be refunded to customers for the over-collection of fuel adjustment clause recoveries. (See Fuel Adjustment Clause Reform.) |
Equity Investments - Investment
Equity Investments - Investment in ATC (Details) - USD ($) $ in Millions | Jul. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
ALLETE's Investment in ATC [Roll Forward] | ||||||
Equity Investment Balance as of December 31, 2019 | $ 197.6 | |||||
Cash Investments | 66.6 | $ 4.6 | ||||
Equity in ATC Earnings (a) | $ 6.4 | $ 4.8 | 11.6 | $ 10.4 | ||
Equity Investment Balance as of June 30, 2020 | $ 267.1 | $ 267.1 | ||||
ATC [Member] | ||||||
Investment in ATC [Line Items] | ||||||
Ownership Percentage | 8.00% | 8.00% | ||||
Expected Additional Investment in 2020 | $ 0.8 | $ 0.8 | ||||
ALLETE's Investment in ATC [Roll Forward] | ||||||
Equity Investment Balance as of December 31, 2019 | 141.6 | |||||
Cash Investments | 1.1 | |||||
Equity in ATC Earnings (a) | [1] | 11.6 | ||||
Distributed ATC Earnings | (9.4) | |||||
Amortization of the Remeasurement of Deferred Income Taxes | 0.7 | |||||
Equity Investment Balance as of June 30, 2020 | $ 145.6 | $ 145.6 | ||||
Authorized Return on Equity | 10.02% | |||||
Authorized Return on Equity, Including Incentive Adder | 10.52% | 10.52% | ||||
Additional Equity in Earnings During the Period | $ 1.2 | |||||
ATC [Member] | Subsequent Event [Member] | ||||||
ALLETE's Investment in ATC [Roll Forward] | ||||||
Cash Investments | $ 0.8 | |||||
[1] | Equity in ATC Earnings includes $1.2 million of additional earnings resulting from the FERC’s May 21, 2020, order increasing ATC’s authorized return on equity to 10.52 percent including an incentive adder for participation in a regional transmission organization. |
Equity Investments - Investme_2
Equity Investments - Investment in Nobles 2 (Details) $ in Millions | 1 Months Ended | 6 Months Ended | ||
Jul. 31, 2020USD ($) | Jun. 30, 2020USD ($)MW | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Investment in Nobles 2 [Line Items] | ||||
Equity Investment Balance | $ 267.1 | $ 197.6 | ||
Cash Investments | $ 66.6 | $ 4.6 | ||
Nobles 2 [Member] | ||||
Investment in Nobles 2 [Line Items] | ||||
Ownership Percentage | 49.00% | |||
Equity Investment Balance | $ 121.5 | $ 56 | ||
Cash Investments | 65.5 | |||
Expected Additional Investment in 2020 | $ 35 | |||
Wind Turbine Generators [Member] | Resource Package [Member] | Tenaska [Member] | MPUC [Member] | Minnesota Power [Member] | Tenaska PPA [Member] | ||||
Investment in Nobles 2 [Line Items] | ||||
Generating Capacity Counterparty Owned (MW) | MW | 250 | |||
Long-term Contract for Purchase of Electric Power, Term of Contract (Years) | 20 years | |||
Subsequent Event [Member] | Nobles 2 [Member] | ||||
Investment in Nobles 2 [Line Items] | ||||
Cash Investments | $ 15 |
Fair Value - Recurring Fair Val
Fair Value - Recurring Fair Value Measures (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 | ||
Investments [Abstract] | ||||
Available-for-sale Securities, Debt Maturities, within One Year, Fair Value | $ 3.8 | |||
Available-for-sale Securities, Debt Maturities, After One Year Through Three Years, Fair Value | 5 | |||
Available-for-sale Securities, Debt Maturities, After Three Years Through Five Years, Fair Value | 1 | |||
Available-for-sale Securities, Debt Maturities, After Five Years, Fair Value | 0 | |||
Recurring Fair Value Measures [Member] | ||||
Investments [Abstract] | ||||
Available-for-sale – Equity Securities | [1] | 10.1 | $ 11.1 | |
Available-for-sale – Corporate and Governmental Debt Securities (b) | [1] | 9.8 | [2] | 9.7 |
Cash Equivalents | [1] | 0.8 | 0.9 | |
Total Fair Value of Assets | 20.7 | 21.7 | ||
Liabilities [Abstract] | ||||
Deferred Compensation | [3] | 20 | 21.2 | |
Total Fair Value of Liabilities | 20 | 21.2 | ||
Total Net Fair Value of Assets (Liabilities) | 0.7 | 0.5 | ||
Recurring Fair Value Measures [Member] | Level 1 [Member] | ||||
Investments [Abstract] | ||||
Available-for-sale – Equity Securities | [1] | 10.1 | 11.1 | |
Available-for-sale – Corporate and Governmental Debt Securities (b) | [1] | 0 | [2] | 0 |
Cash Equivalents | [1] | 0.8 | 0.9 | |
Total Fair Value of Assets | 10.9 | 12 | ||
Liabilities [Abstract] | ||||
Deferred Compensation | [3] | 0 | 0 | |
Total Fair Value of Liabilities | 0 | 0 | ||
Total Net Fair Value of Assets (Liabilities) | 10.9 | 12 | ||
Recurring Fair Value Measures [Member] | Level 2 [Member] | ||||
Investments [Abstract] | ||||
Available-for-sale – Equity Securities | [1] | 0 | 0 | |
Available-for-sale – Corporate and Governmental Debt Securities (b) | [1] | 9.8 | [2] | 9.7 |
Cash Equivalents | [1] | 0 | 0 | |
Total Fair Value of Assets | 9.8 | 9.7 | ||
Liabilities [Abstract] | ||||
Deferred Compensation | [3] | 20 | 21.2 | |
Total Fair Value of Liabilities | 20 | 21.2 | ||
Total Net Fair Value of Assets (Liabilities) | (10.2) | (11.5) | ||
Recurring Fair Value Measures [Member] | Level 3 [Member] | ||||
Investments [Abstract] | ||||
Available-for-sale – Equity Securities | [1] | 0 | 0 | |
Available-for-sale – Corporate and Governmental Debt Securities (b) | [1] | 0 | [2] | 0 |
Cash Equivalents | [1] | 0 | 0 | |
Total Fair Value of Assets | 0 | 0 | ||
Liabilities [Abstract] | ||||
Deferred Compensation | [3] | 0 | 0 | |
Total Fair Value of Liabilities | 0 | 0 | ||
Total Net Fair Value of Assets (Liabilities) | $ 0 | $ 0 | ||
[1] | Included in Other Non-Current Assets on the Consolidated Balance Sheet. | |||
[2] | As of June 30, 2020, the aggregate amount of available-for-sale corporate and governmental debt securities maturing in one year or less was $3.8 million, in one year to less than three years was $5.0 million, in three years to less than five years was $1.0 million and in five or more years was zero. | |||
[3] | Included in Other Non-Current Liabilities on the Consolidated Balance Sheet. |
Fair Value - Fair Value of Fina
Fair Value - Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value of Financial Instruments [Line Items] | ||
Short-Term and Long-Term Debt - Carrying Amount | $ 1,899 | $ 1,622.6 |
ALLETE Clean Energy [Member] | ||
Fair Value of Financial Instruments [Line Items] | ||
Asset Carrying Value | 11 | |
Level 2 [Member] | ||
Fair Value of Financial Instruments [Line Items] | ||
Short-Term and Long-Term Debt - Fair Value | $ 2,163.4 | $ 1,791.8 |
Short-Term and Long-Term Debt_2
Short-Term and Long-Term Debt (Details) - USD ($) $ in Millions | Aug. 03, 2020 | Apr. 08, 2020 | Jan. 10, 2020 | Jul. 06, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||||||
Short-Term Debt - Principal | $ 510 | $ 213.3 | ||||
Short-Term Debt - Unamortized Debt Issuance Costs | (0.3) | (0.4) | ||||
Short-Term Debt - Total | 509.7 | 212.9 | ||||
Long-Term Debt - Principal | 1,389 | 1,409.3 | ||||
Long-Term Debt - Unamortized Debt Issuance Costs | (8) | (8.4) | ||||
Long-Term Debt - Total | 1,381 | 1,400.9 | ||||
Total Debt - Principal | 1,899 | 1,622.6 | ||||
Total Debt - Unamortized Debt Issuance Costs | (8.3) | (8.8) | ||||
Total Debt - Total | 1,890.7 | 1,613.8 | ||||
Unsecured Term Loan Due in 2021 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Unsecured Term Loan, Amount | $ 200 | |||||
Variable Rate Basis | LIBOR | |||||
Basis Spread on Variable Rate | 0.55% | |||||
Unsecured Term Loan Due April 2021 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Unsecured Term Loan, Amount | $ 115 | |||||
Proceeds from Issuance of Unsecured Debt | $ 95 | |||||
Variable Rate Basis | LIBOR | |||||
Basis Spread on Variable Rate | 1.70% | |||||
Debt Instrument, Interest Rate Floor | 0.75% | |||||
Line of Credit [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Letters of Credit Outstanding, Amount | 23.5 | 62 | ||||
Line of Credit, Current | $ 0 | $ 0 | ||||
Subsequent Event [Member] | ALLETE Bonds 2.50% Due August 2030 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from Issuance of First Mortgage Bond | $ 46 | |||||
Interest Rate | 2.50% | |||||
Subsequent Event [Member] | Unsecured Term Loan Due April 2021 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Unused Borrowing Capacity, Amount | $ 20 | |||||
Subsequent Event [Member] | ALLETE Bonds 3.30% Due August 2050 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from Issuance of First Mortgage Bond | $ 94 | |||||
Interest Rate | 3.30% |
Short-Term and Long-Term Debt -
Short-Term and Long-Term Debt - Financial Covenants (Details) | Jun. 30, 2020 |
Debt Instrument [Line Items] | |
Actual Ratio of Indebtedness to Total Capitalization | 0.44 |
Maximum [Member] | |
Debt Instrument [Line Items] | |
Required Ratio of Indebtedness to Total Capitalization | 0.65 |
Commitments, Guarantees and C_2
Commitments, Guarantees and Contingencies - Power Purchase Agreements (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2020USD ($)MW | Jun. 30, 2019USD ($) | |
Square Butte [Member] | Square Butte PPA [Member] | ||
Power Purchase Agreements [Line Items] | ||
PPA Counterparty Total Debt Outstanding | $ 272.9 | |
Square Butte [Member] | Square Butte PPA [Member] | Minnesota Power [Member] | ||
Power Purchase Agreements [Line Items] | ||
Cost of Power Purchased | 40.8 | $ 41.1 |
Pro Rata Share of PPA Counterparty Interest Expense | $ 3.7 | $ 4.2 |
Square Butte [Member] | Square Butte PPA [Member] | Minnesota Power [Member] | Square Butte Coal-fired Unit [Member] | ||
Power Purchase Agreements [Line Items] | ||
Expected Output Entitlement | 50.00% | |
Minnkota Power [Member] | Square Butte PPA [Member] | Minnesota Power [Member] | Square Butte Coal-fired Unit [Member] | Minnkota Power PSA [Member] | ||
Power Purchase Agreements [Line Items] | ||
Expected Output Entitlement | 28.00% | 28.00% |
Minnesota Power Short-term PSAs in 2020 and 2021 [Member] | ||
Power Purchase Agreements [Line Items] | ||
MW Sold Under Short-term PSAs | MW | 300 |
Commitments, Guarantees and C_3
Commitments, Guarantees and Contingencies - Transmission (Details) $ in Millions | Jun. 30, 2020USD ($)kVMilesMW |
Great Northern Transmission Line [Member] | |
Transmission [Line Items] | |
Total Project Costs To Date | $ 657 |
Minnesota Power [Member] | Great Northern Transmission Line [Member] | |
Transmission [Line Items] | |
Transmission Line Length (Miles) | Miles | 220 |
Transmission Line Capacity (kV) | kV | 500 |
Total Project Costs Incurred to Date | $ 307.1 |
Manitoba Hydro PPA [Member] | Manitoba Hydro [Member] | |
Transmission [Line Items] | |
Output Being Purchased (MW) | MW | 250 |
Commitments, Guarantees and C_4
Commitments, Guarantees and Contingencies - Environmental Matters (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Coal Combustion Residuals [Member] | Minnesota Power [Member] | ||
Environmental Matters [Line Items] | ||
Expected Period for Costs of Compliance | 15 years | |
Coal Combustion Residuals [Member] | Minimum [Member] | Minnesota Power [Member] | ||
Environmental Matters [Line Items] | ||
Estimated Costs of Compliance | $ 65 | |
Coal Combustion Residuals [Member] | Maximum [Member] | Minnesota Power [Member] | ||
Environmental Matters [Line Items] | ||
Estimated Costs of Compliance | 120 | |
Manufactured Gas Plant [Member] | SWL&P [Member] | Superior, WI [Member] | ||
Environmental Matters [Line Items] | ||
Estimated Costs of Compliance (Accrued) | $ 7 | $ 7 |
Commitments, Guarantees and C_5
Commitments, Guarantees and Contingencies - Other Matters (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
ALLETE Clean Energy [Member] | Letters of Credit [Member] | ||
Guarantor Obligations [Line Items] | ||
Letters of Credit Outstanding, Amount | $ 63,600,000 | |
BNI Energy Reclamation Liability [Member] | ||
Guarantor Obligations [Line Items] | ||
Estimated Obligation | 67,300,000 | |
BNI Energy Reclamation Liability [Member] | Surety Bonds [Member] | ||
Guarantor Obligations [Line Items] | ||
Collateral | 67,700,000 | |
ALLETE Properties Development and Maintenance Obligations [Member] | ||
Guarantor Obligations [Line Items] | ||
Estimated Obligation | 1,300,000 | |
ALLETE Properties Development and Maintenance Obligations [Member] | Surety Bonds and Letters of Credit [Member] | ||
Guarantor Obligations [Line Items] | ||
Collateral | $ 2,300,000 | |
Town Center District Capital Improvement Bonds [Member] | ||
Guarantor Obligations [Line Items] | ||
Ownership Percentage of Benefited Property | 53.00% | 53.00% |
Annual Assessment | $ 1,900,000 | |
ALLETE South Wind [Member] | Letters of Credit [Member] | ||
Guarantor Obligations [Line Items] | ||
Letters of Credit Outstanding, Amount | 14,000,000 | |
Minnesota Power [Member] | Letters of Credit [Member] | ||
Guarantor Obligations [Line Items] | ||
Letters of Credit Outstanding, Amount | 6,400,000 | |
ALLETE, Inc. [Member] | Letters of Credit [Member] | ||
Guarantor Obligations [Line Items] | ||
Letters of Credit Outstanding, Amount | $ 84,000,000 |
Earnings Per Share and Common_3
Earnings Per Share and Common Stock (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share - Basic [Abstract] | ||||
Net Income (Loss) Attributable to ALLETE | $ 20.1 | $ 34.2 | $ 86.4 | $ 104.7 |
Average Common Shares | 51.8 | 51.6 | 51.8 | 51.6 |
Earnings Per Share | $ 0.39 | $ 0.66 | $ 1.67 | $ 2.03 |
Earnings Per Share - Diluted [Abstract] | ||||
Net Income | $ 20.1 | $ 34.2 | $ 86.4 | $ 104.7 |
Average Common Shares | 51.9 | 51.7 | 51.8 | 51.7 |
Earnings Per Share | $ 0.39 | $ 0.66 | $ 1.67 | $ 2.02 |
Dilutive Securities (Shares) | 0.1 | 0.1 | 0 | 0.1 |
Income Tax Expense (Details)
Income Tax Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | ||
Current Income Tax Expense (Benefit) [Abstract] | ||||||
Federal | [1] | $ 0 | $ 0 | $ 0 | $ 0 | |
State | [1] | 0 | (0.1) | 0 | 0.2 | |
Total Current Income Tax Expense | 0 | (0.1) | 0 | 0.2 | ||
Deferred Income Tax Expense (Benefit) [Abstract] | ||||||
Federal | [2] | (8.6) | (7.1) | (26.2) | (16.8) | |
State | [3] | 0.2 | 2.5 | 4.2 | 15 | |
Investment Tax Credit Amortization | (0.1) | (0.1) | (0.3) | (0.3) | ||
Total Deferred Income Tax Expense (Benefit) | (8.5) | (4.7) | (22.3) | (2.1) | ||
Total Income Tax Expense (Benefit) | (8.5) | (4.8) | (22.3) | (1.9) | ||
Reconciliation of Taxes from Federal Statutory Rate to Total Income Tax Expense [Abstract] | ||||||
Income Before Income Taxes | $ 8.4 | $ 29.4 | $ 59.1 | $ 102.8 | ||
Statutory Federal Income Tax Rate | 21.00% | 21.00% | 21.00% | 21.00% | ||
Income Taxes Computed at Statutory Federal Rate | $ 1.7 | $ 6.2 | $ 12.4 | $ 21.6 | ||
Increase (Decrease) in Income Tax Due to: [Abstract] | ||||||
State Income Taxes – Net of Federal Income Tax Benefit | 0.1 | 1.9 | 3.3 | 12 | ||
Production Tax Credits | (9.6) | (9.8) | (33.4) | (26.1) | ||
Regulatory Differences – Excess Deferred Tax | (0.9) | (1.6) | (5.3) | (4.8) | ||
U.S. Water Services Sale of Stock Basis Difference | 0 | (0.7) | 0 | 1.7 | ||
Share-Based Compensation | 0 | 0 | (0.1) | (0.9) | ||
Other | 0.2 | (0.8) | 0.8 | (5.4) | ||
Total Income Tax Expense (Benefit) | (8.5) | $ (4.8) | $ (22.3) | $ (1.9) | ||
Effective Tax Rate | (37.80%) | (1.80%) | ||||
Uncertain Tax Positions [Abstract] | ||||||
Gross Unrecognized Tax Benefits | 1.4 | $ 1.4 | $ 1.4 | |||
Gross Unrecognized Tax Benefits That Would Favorably Impact Effective Income Tax Rate | $ 0.6 | $ 0.6 | ||||
[1] | For each of the six months ended June 30, 2020 and 2019, the federal and state current tax expense was minimal due to NOLs which resulted from the bonus depreciation provisions of certain tax legislation. Federal and state NOLs are being carried forward to offset current and future taxable income. | |||||
[2] | For each of the six months ended June 30, 2020 and 2019, the federal income tax benefit is primarily due to production tax credits. | |||||
[3] | For the six months ended June 30, 2019, the state income tax expense is primarily related to the sale of U.S. Water Services. |
Pension and Other Postretirem_3
Pension and Other Postretirement Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | ||
Pension [Member] | |||||
Components of Net Periodic Benefit Cost (Credit) [Abstract] | |||||
Service Cost | $ 2.7 | $ 2.4 | $ 5.3 | $ 4.7 | |
Interest Cost | [1] | 7 | 8 | 14 | 16 |
Expected Return on Plan Assets | [1] | (10.7) | (11.1) | (21.4) | (22.1) |
Amortization of Prior Service Credits | [1] | (0.1) | (0.1) | (0.1) | (0.1) |
Amortization of Net Loss | [1] | 3.2 | 1.9 | 6.4 | 3.7 |
Net Periodic Benefit Cost (Credit) | 2.1 | 1.1 | 4.2 | 2.2 | |
Employer Contributions to Defined Benefit Plans | 10.7 | 10.4 | |||
Defined Benefit Plan, Expected Future Employer Contributions, Remainder of Fiscal Year | 0 | 0 | |||
Other Postretirement [Member] | |||||
Components of Net Periodic Benefit Cost (Credit) [Abstract] | |||||
Service Cost | 0.9 | 1 | 1.7 | 2 | |
Interest Cost | [1] | 1.2 | 1.9 | 2.5 | 3.8 |
Expected Return on Plan Assets | [1] | (2.4) | (2.7) | (4.9) | (5.3) |
Amortization of Prior Service Credits | [1] | (2) | (0.4) | (4) | (0.8) |
Amortization of Net Loss | [1] | 0.2 | 0.1 | 0.5 | 0.2 |
Net Periodic Benefit Cost (Credit) | (2.1) | $ (0.1) | (4.2) | (0.1) | |
Employer Contributions to Defined Benefit Plans | 0 | $ 0 | |||
Defined Benefit Plan, Expected Future Employer Contributions, Remainder of Fiscal Year | $ 0 | $ 0 | |||
[1] | These components of net periodic benefit cost (credit) are included in the line item “Other” under Other Income (Expense) on the Consolidated Statement of Income. |
Business Segments (Details)
Business Segments (Details) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2020USD ($)a | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)aSegments | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | ||||
Business Segments [Line Items] | ||||||||
Number of Reportable Segments | Segments | 3 | |||||||
Operating Revenue | $ 243.2 | $ 290.4 | $ 554.8 | $ 647.6 | ||||
Net Income (Loss) Attributable to ALLETE | 20.1 | 34.2 | 86.4 | 104.7 | ||||
Gain on Sale of U.S. Water Services, After-tax | $ 13.2 | |||||||
Assets | 5,760.4 | $ 5,760.4 | 5,482.8 | |||||
Regulated Operations [Member] | ||||||||
Business Segments [Line Items] | ||||||||
Number of Operating Segments | Segments | 3 | |||||||
Operating Revenue | 200.8 | 249.8 | $ 466.1 | 532 | ||||
Net Income (Loss) Attributable to ALLETE | 11.1 | 30.3 | 68.6 | 81.8 | ||||
Assets | 4,139.8 | 4,139.8 | 4,130.8 | |||||
Regulated Operations [Member] | Residential [Member] | ||||||||
Business Segments [Line Items] | ||||||||
Operating Revenue | 27.4 | 29.2 | 68.3 | 74.4 | ||||
Regulated Operations [Member] | Commercial [Member] | ||||||||
Business Segments [Line Items] | ||||||||
Operating Revenue | 28.8 | 34.9 | 66.1 | 73.8 | ||||
Regulated Operations [Member] | Municipal [Member] | ||||||||
Business Segments [Line Items] | ||||||||
Operating Revenue | 9 | 12.2 | 19.3 | 27.6 | ||||
Regulated Operations [Member] | Industrial [Member] | ||||||||
Business Segments [Line Items] | ||||||||
Operating Revenue | 88 | 120.3 | 206.8 | 241.9 | ||||
Regulated Operations [Member] | Other Power Suppliers [Member] | ||||||||
Business Segments [Line Items] | ||||||||
Operating Revenue | 27.4 | 35.2 | 65.7 | 74.6 | ||||
Regulated Operations [Member] | Other [Member] | ||||||||
Business Segments [Line Items] | ||||||||
Operating Revenue | 20.2 | 18 | 39.9 | 39.7 | ||||
ALLETE Clean Energy [Member] | ||||||||
Business Segments [Line Items] | ||||||||
Operating Revenue | 17.6 | 15.4 | 37.7 | 32.9 | ||||
Net Income (Loss) Attributable to ALLETE | 4 | 1.9 | 15.7 | 7.7 | ||||
Assets | 1,250.2 | 1,250.2 | 1,001.5 | |||||
ALLETE Clean Energy [Member] | Long-term PSA [Member] | ||||||||
Business Segments [Line Items] | ||||||||
Operating Revenue | 14.8 | 12.5 | 32.1 | 27.1 | ||||
ALLETE Clean Energy [Member] | Other [Member] | ||||||||
Business Segments [Line Items] | ||||||||
Operating Revenue, Other Than Customer Revenue | 2.8 | 2.9 | 5.6 | 5.8 | ||||
U.S. Water Services [Member] | ||||||||
Business Segments [Line Items] | ||||||||
Operating Revenue | 0 | 0 | 0 | [1] | 33.4 | [1] | ||
Net Income (Loss) Attributable to ALLETE | [1] | 0 | 0 | 0 | (1.1) | |||
U.S. Water Services [Member] | Point-in-Time [Member] | ||||||||
Business Segments [Line Items] | ||||||||
Operating Revenue | [1] | 0 | 0 | 0 | 19 | |||
U.S. Water Services [Member] | Contract [Member] | ||||||||
Business Segments [Line Items] | ||||||||
Operating Revenue | 0 | 0 | 0 | [1] | 9.2 | [1] | ||
U.S. Water Services [Member] | Capital Project [Member] | ||||||||
Business Segments [Line Items] | ||||||||
Operating Revenue | $ 0 | 0 | $ 0 | [1] | 5.2 | [1] | ||
Corporate and Other [Member] | ||||||||
Business Segments [Line Items] | ||||||||
Number of Operating Segments | Segments | 2 | |||||||
Land in Minnesota (Acres) | a | 4,000 | 4,000 | ||||||
Operating Revenue | $ 24.8 | 25.2 | $ 51 | 49.3 | ||||
Net Income (Loss) Attributable to ALLETE | [1] | 5 | 2 | 2.1 | 16.3 | |||
Gain on Sale of U.S. Water Services, After-tax | 11.1 | |||||||
Assets | 370.4 | 370.4 | $ 350.5 | |||||
Corporate and Other [Member] | Long-term Contract [Member] | ||||||||
Business Segments [Line Items] | ||||||||
Operating Revenue | 22.5 | 21.2 | 44.9 | 41.4 | ||||
Corporate and Other [Member] | Other [Member] | ||||||||
Business Segments [Line Items] | ||||||||
Operating Revenue | $ 2.3 | $ 4 | $ 6.1 | $ 7.9 | ||||
[1] | In March 2019, ALLETE sold U.S. Water Services. The Company recognized a gain on the sale of $11.1 million after-tax during the six months ended June 30, 2019, which is reflected in Corporate and Other. |