QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
Commission File Number | Registrant; State of Incorporation; Address; and Telephone Number | IRS Employer Identification No. | ||
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company | ||||||
Page | ||||
Page | ||||
03/31/2020 Form 10-Q | i | Wisconsin Electric Power Company |
Subsidiaries and Affiliates | ||
UMERC | Upper Michigan Energy Resources Corporation | |
We Power | W.E. Power, LLC | |
WEC Energy Group | WEC Energy Group, Inc. | |
WG | Wisconsin Gas LLC | |
Federal and State Regulatory Agencies | ||
EPA | United States Environmental Protection Agency | |
FERC | Federal Energy Regulatory Commission | |
PSCW | Public Service Commission of Wisconsin | |
SEC | United States Securities and Exchange Commission | |
Accounting Terms | ||
ASU | Accounting Standards Update | |
FASB | Financial Accounting Standards Board | |
GAAP | United States Generally Accepted Accounting Principles | |
OPEB | Other Postretirement Employee Benefits | |
Environmental Terms | ||
ACE | Affordable Clean Energy | |
BATW | Bottom Ash Transport Water | |
BSER | Best System of Emission Reduction | |
BTA | Best Technology Available | |
CAA | Clean Air Act | |
CO2 | Carbon Dioxide | |
ELG | Steam Electric Effluent Limitation Guidelines | |
FGD | Flue Gas Desulfurization | |
GHG | Greenhouse Gas | |
MATS | Mercury and Air Toxics Standards | |
RTR | Risk and Technology Review | |
Measurements | ||
Dth | Dekatherm | |
MW | Megawatt | |
MWh | Megawatt-hour | |
Other Terms and Abbreviations | ||
AMI | Advanced Metering Infrastructure | |
Badger Hollow II | Badger Hollow Solar Farm II | |
CDC | Centers for Disease Control and Prevention | |
COVID-19 | Coronavirus Disease – 2019 | |
D.C. Circuit Court of Appeals | United States Court of Appeals for the District of Columbia Circuit | |
ERGS | Elm Road Generating Station | |
Exchange Act | Securities Exchange Act of 1934, as amended | |
FTR | Financial Transmission Right | |
LIBOR | London Interbank Offered Rate | |
LNG | Liquefied Natural Gas | |
MISO | Midcontinent Independent System Operator, Inc. | |
OCPP | Oak Creek Power Plant | |
03/31/2020 Form 10-Q | ii | Wisconsin Electric Power Company |
OC 5 | Oak Creek Power Plant Unit 5 | |
OC 6 | Oak Creek Power Plant Unit 6 | |
OC 7 | Oak Creek Power Plant Unit 7 | |
OC 8 | Oak Creek Power Plant Unit 8 | |
PIPP | Presque Isle Power Plant | |
ROE | Return on Equity | |
SSR | System Support Resource | |
Tax Legislation | Tax Cuts and Jobs Act of 2017 | |
Tilden | Tilden Mining Company | |
WHO | World Health Organization | |
03/31/2020 Form 10-Q | iii | Wisconsin Electric Power Company |
• | Factors affecting utility operations such as catastrophic weather-related damage, environmental incidents, unplanned facility outages and repairs and maintenance, and electric transmission or natural gas pipeline system constraints; |
• | Factors affecting the demand for electricity and natural gas, including political developments, unusual weather, changes in economic conditions, customer growth and declines, commodity prices, energy conservation efforts, and continued adoption of distributed generation by customers; |
• | The timing, resolution, and impact of rate cases and negotiations, including recovery of deferred and current costs and the ability to earn a reasonable return on investment, and other regulatory decisions impacting our regulated operations; |
• | The impact of the COVID-19 outbreak on our business functions, financial condition, liquidity, and results of operations; |
• | The impact of recent and future federal, state, and local legislative and/or regulatory changes, including changes in rate-setting policies or procedures, deregulation and restructuring of the electric and/or natural gas utility industries, transmission or distribution system operation, the approval process for new construction, reliability standards, pipeline integrity and safety standards, allocation of energy assistance, energy efficiency mandates, and tax laws, including the Tax Legislation as well as those that affect our ability to use production tax credits and investment tax credits; |
• | Federal and state legislative and regulatory changes relating to the environment, including climate change and other environmental regulations impacting generation facilities and renewable energy standards, the enforcement of these laws and regulations, changes in the interpretation of regulations or permit conditions by regulatory agencies, and the recovery of associated remediation and compliance costs; |
• | The ability to obtain and retain customers, including wholesale customers, due to increased competition in our electric and natural gas markets from retail choice and alternative electric suppliers, and continued industry consolidation; |
• | The timely completion of capital projects within budgets and the ability to recover the related costs through rates; |
• | Factors affecting the implementation of WEC Energy Group's generation reshaping plan, including related regulatory decisions, the cost of materials, supplies, and labor, and the feasibility of competing projects; |
• | The financial and operational feasibility of taking more aggressive action to further reduce GHG emissions in order to limit future global temperature increases; |
• | The risks associated with changing commodity prices, particularly natural gas and electricity, and the availability of sources of natural gas and other fossil fuels, purchased power, materials needed to operate environmental controls at our electric generating facilities, or water supply due to high demand, shortages, transportation problems, nonperformance by electric energy or natural gas suppliers under existing power purchase or natural gas supply contracts, or other developments; |
03/31/2020 Form 10-Q | 1 | Wisconsin Electric Power Company |
• | Changes in credit ratings, interest rates, and our ability to access the capital markets, caused by volatility in the global credit markets, our capitalization structure, and market perceptions of the utility industry or us; |
• | Changes in the method of determining LIBOR or the replacement of LIBOR with an alternative reference rate; |
• | Costs and effects of litigation, administrative proceedings, investigations, settlements, claims, and inquiries; |
• | The direct or indirect effect on our business resulting from terrorist attacks and cyber security intrusions, as well as the threat of such incidents, including the failure to maintain the security of personally identifiable information, the associated costs to protect our utility assets, technology systems, and personal information, and the costs to notify affected persons to mitigate their information security concerns and to comply with state notification laws; |
• | The risk of financial loss, including increases in bad debt expense, associated with the inability of our customers, counterparties, and affiliates to meet their obligations; |
• | Changes in the creditworthiness of the counterparties with whom we have contractual arrangements, including participants in the energy trading markets and fuel suppliers and transporters; |
• | The investment performance of our employee benefit plan assets, as well as unanticipated changes in related actuarial assumptions, which could impact future funding requirements; |
• | Factors affecting the employee workforce, including loss of key personnel, internal restructuring, work stoppages, and collective bargaining agreements and negotiations with union employees; |
• | Advances in technology, and related legislation or regulation supporting the use of that technology, that result in competitive disadvantages and create the potential for impairment of existing assets; |
• | Potential business strategies to acquire and dispose of assets, which cannot be assured to be completed timely or within budgets; |
• | The timing and outcome of any audits, disputes, and other proceedings related to taxes; |
• | The ability to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act, while both integrating and continuing to consolidate WEC Energy Group's enterprise systems with those of its other utilities; |
• | The effect of accounting pronouncements issued periodically by standard-setting bodies; and |
• | Other considerations disclosed elsewhere herein and in other reports we file with the SEC or in other publicly disseminated written documents. |
03/31/2020 Form 10-Q | 2 | Wisconsin Electric Power Company |
CONDENSED INCOME STATEMENTS (Unaudited) | Three Months Ended | |||||||
March 31 | ||||||||
(in millions) | 2020 | 2019 | ||||||
Operating revenues | $ | $ | ||||||
Operating expenses | ||||||||
Cost of sales | ||||||||
Other operation and maintenance | ||||||||
Depreciation and amortization | ||||||||
Property and revenue taxes | ||||||||
Total operating expenses | ||||||||
Operating income | ||||||||
Other income, net | ||||||||
Interest expense | ||||||||
Other expense | ( | ) | ( | ) | ||||
Income before income taxes | ||||||||
Income tax expense (benefit) | ( | ) | ||||||
Net income | ||||||||
Preferred stock dividend requirements | ||||||||
Net income attributed to common shareholder | $ | $ | ||||||
03/31/2020 Form 10-Q | 3 | Wisconsin Electric Power Company |
CONDENSED BALANCE SHEETS (Unaudited) (in millions, except share and per share amounts) | March 31, 2020 | December 31, 2019 | ||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | $ | ||||||
Accounts receivable and unbilled revenues, net of reserves of $39.8 and $38.1, respectively | ||||||||
Accounts receivable from related parties | ||||||||
Materials, supplies, and inventories | ||||||||
Prepaid taxes | ||||||||
Other | ||||||||
Current assets | ||||||||
Long-term assets | ||||||||
Property, plant, and equipment, net of accumulated depreciation and amortization of $4,648.4 and $4,564.0, respectively | ||||||||
Regulatory assets | ||||||||
Other | ||||||||
Long-term assets | ||||||||
Total assets | $ | $ | ||||||
Liabilities and Equity | ||||||||
Current liabilities | ||||||||
Short-term debt | $ | $ | ||||||
Current portion of finance lease obligations | ||||||||
Accounts payable | ||||||||
Accounts payable to related parties | ||||||||
Accrued payroll and benefits | ||||||||
Accrued taxes | ||||||||
Accrued interest | ||||||||
Other | ||||||||
Current liabilities | ||||||||
Long-term liabilities | ||||||||
Long-term debt | ||||||||
Finance lease obligations | ||||||||
Deferred income taxes | ||||||||
Regulatory liabilities | ||||||||
Pension and OPEB obligations | ||||||||
Other | ||||||||
Long-term liabilities | ||||||||
Commitments and contingencies (Note 15) | ||||||||
Common shareholder's equity | ||||||||
Common stock – $10 par value; 65,000,000 shares authorized; 33,289,327 shares outstanding | ||||||||
Additional paid in capital | ||||||||
Retained earnings | ||||||||
Common shareholder's equity | ||||||||
Preferred stock | ||||||||
Total liabilities and equity | $ | $ | ||||||
03/31/2020 Form 10-Q | 4 | Wisconsin Electric Power Company |
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) | Three Months Ended | |||||||
March 31 | ||||||||
(in millions) | 2020 | 2019 | ||||||
Operating activities | ||||||||
Net income | $ | $ | ||||||
Reconciliation to cash provided by operating activities | ||||||||
Depreciation and amortization | ||||||||
Deferred income taxes and investment tax credits, net | ( | ) | ( | ) | ||||
Change in – | ||||||||
Accounts receivable and unbilled revenues | ||||||||
Materials, supplies, and inventories | ||||||||
Prepaid taxes | ||||||||
Other current assets | ||||||||
Accounts payable | ( | ) | ( | ) | ||||
Accrued taxes | ||||||||
Other current liabilities | ||||||||
Other, net | ||||||||
Net cash provided by operating activities | ||||||||
Investing activities | ||||||||
Capital expenditures | ( | ) | ( | ) | ||||
Other, net | ||||||||
Net cash used in investing activities | ( | ) | ( | ) | ||||
Financing activities | ||||||||
Change in short-term debt | ( | ) | ( | ) | ||||
Payments for finance lease obligations | ( | ) | ( | ) | ||||
Payment of dividends to parent | ( | ) | ( | ) | ||||
Other, net | ( | ) | ( | ) | ||||
Net cash used in financing activities | ( | ) | ( | ) | ||||
Net change in cash and cash equivalents | ( | ) | ( | ) | ||||
Cash and cash equivalents at beginning of period | ||||||||
Cash and cash equivalents at end of period | $ | $ | ||||||
03/31/2020 Form 10-Q | 5 | Wisconsin Electric Power Company |
CONDENSED STATEMENTS OF EQUITY (Unaudited) | ||||||||||||||||||||||||
Wisconsin Electric Power Company Common Shareholder's Equity | ||||||||||||||||||||||||
(in millions) | Common Stock | Additional Paid In Capital | Retained Earnings | Total Common Shareholder's Equity | Preferred Stock | Total Equity | ||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Net income attributed to common shareholder | ||||||||||||||||||||||||
Payment of dividends to parent | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Stock-based compensation and other | ||||||||||||||||||||||||
Balance at March 31, 2020 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Wisconsin Electric Power Company Common Shareholder's Equity | ||||||||||||||||||||||||
(in millions) | Common Stock | Additional Paid In Capital | Retained Earnings | Total Common Shareholder's Equity | Preferred Stock | Total Equity | ||||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Net income attributed to common shareholder | ||||||||||||||||||||||||
Payment of dividends to parent | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Stock-based compensation and other | ||||||||||||||||||||||||
Balance at March 31, 2019 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
03/31/2020 Form 10-Q | 6 | Wisconsin Electric Power Company |
Wisconsin Electric Power Company | ||||||||
Three Months Ended March 31 | ||||||||
(in millions) | 2020 | 2019 | ||||||
Electric utility | $ | $ | ||||||
Natural gas utility | ||||||||
Total revenues from contracts with customers | ||||||||
Other operating revenues | ||||||||
Total operating revenues | $ | $ | ||||||
03/31/2020 Form 10-Q | 7 | Wisconsin Electric Power Company |
Electric Utility Operating Revenues | ||||||||
Three Months Ended March 31 | ||||||||
(in millions) | 2020 | 2019 | ||||||
Residential | $ | $ | ||||||
Small commercial and industrial | ||||||||
Large commercial and industrial | ||||||||
Other | ||||||||
Total retail revenues | ||||||||
Wholesale | ||||||||
Resale | ||||||||
Steam | ||||||||
Other utility revenues | ( | ) | ||||||
Total electric utility operating revenues | $ | $ | ||||||
Natural Gas Utility Operating Revenues | ||||||||
Three Months Ended March 31 | ||||||||
(in millions) | 2020 | 2019 | ||||||
Residential | $ | $ | ||||||
Commercial and industrial | ||||||||
Total retail revenues | ||||||||
Transport | ||||||||
Other utility revenues * | ( | ) | ( | ) | ||||
Total natural gas utility operating revenues | $ | $ | ||||||
* | Includes amounts refunded to customers for purchased gas adjustment costs. |
Three Months Ended March 31 | ||||||||
(in millions) | 2020 | 2019 | ||||||
Late payment charges | $ | $ | ||||||
Rental revenues | ||||||||
Alternative revenues * | ( | ) | ||||||
Total other operating revenues | $ | $ | ||||||
* | Negative amounts can result from alternative revenues being reversed to revenues from contracts with customers as the customer is billed for these alternative revenues. Negative amounts can also result from revenues to be refunded to wholesale customers subject to true-up, as discussed in Note 1(d), Operating Revenues, in our 2019 Annual Report on Form 10-K. |
03/31/2020 Form 10-Q | 8 | Wisconsin Electric Power Company |
(in millions) | March 31, 2020 | |||
Accounts receivable and unbilled revenues | $ | |||
Allowance for credit losses | ||||
Accounts receivable and unbilled revenues, net | $ | |||
Total accounts receivable, net – past due greater than 90 days* | $ | |||
Past due greater than 90 days – collection risk mitigated by regulatory mechanisms* | % | |||
* | Our exposure to credit losses for certain regulated utility customers is mitigated by a regulatory mechanism we have in place. Specifically, our residential tariffs include a mechanism for cost recovery or refund of uncollectible expense based on the difference between actual uncollectible write-offs and the amounts recovered in rates. As a result, at March 31, 2020, $ |
03/31/2020 Form 10-Q | 9 | Wisconsin Electric Power Company |
(in millions) | Three Months Ended March 31, 2020 | |||
Balance at December 31, 2019 | $ | |||
Provision for credit losses | ||||
Provision for credit losses deferred for future recovery or refund | ( | ) | ||
Write-offs charged against the allowance | ( | ) | ||
Recoveries of amounts previously written off | ||||
Balance at March 31, 2020 | $ | |||
(in millions) | March 31, 2020 | December 31, 2019 | ||||||
Regulatory assets | ||||||||
Finance leases | $ | $ | ||||||
Plant retirements | ||||||||
Pension and OPEB costs | ||||||||
Income tax related items | ||||||||
SSR | ||||||||
Other, net | ||||||||
Total regulatory assets | $ | $ | ||||||
(in millions) | March 31, 2020 | December 31, 2019 | ||||||
Regulatory liabilities | ||||||||
Income tax related items | $ | $ | ||||||
Removal costs | ||||||||
Pension and OPEB benefits | ||||||||
Electric transmission costs | ||||||||
Uncollectible expense | ||||||||
Energy costs refundable through rate adjustments | ||||||||
Other, net | ||||||||
Total regulatory liabilities | $ | $ | ||||||
Balance sheet presentation | ||||||||
Other current liabilities | $ | $ | ||||||
Regulatory liabilities | ||||||||
Total regulatory liabilities | $ | $ | ||||||
03/31/2020 Form 10-Q | 10 | Wisconsin Electric Power Company |
(in millions, except percentages) | March 31, 2020 | December 31, 2019 | ||||||
Commercial paper | ||||||||
Amount outstanding | $ | $ | ||||||
Weighted-average interest rate on amounts outstanding | % | % | ||||||
(in millions) | Maturity | March 31, 2020 | ||||
Revolving credit facility | October 2022 | $ | ||||
Less: | ||||||
Letters of credit issued inside credit facility | $ | |||||
Commercial paper outstanding | ||||||
Available capacity under existing credit facility | $ | |||||
(in millions) | March 31, 2020 | December 31, 2019 | ||||||
Materials and supplies | $ | $ | ||||||
Fossil fuel | ||||||||
Natural gas in storage | ||||||||
Total | $ | $ | ||||||
Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | |||||||||||||
(in millions) | Amount | Effective Tax Rate | Amount | Effective Tax Rate | ||||||||||
Statutory federal income tax | $ | % | $ | % | ||||||||||
State income taxes net of federal tax benefit | % | % | ||||||||||||
Tax repairs | % | ( | ) | ( | )% | |||||||||
Federal excess deferred tax amortization – Wisconsin unprotected | ( | ) | ( | )% | % | |||||||||
Federal excess deferred tax amortization | ( | ) | ( | )% | ( | ) | ( | )% | ||||||
Wind production tax credits | ( | ) | ( | )% | ( | ) | ( | )% | ||||||
Other | % | % | ||||||||||||
Total income tax expense (benefit) | $ | % | $ | ( | ) | ( | )% | |||||||
03/31/2020 Form 10-Q | 11 | Wisconsin Electric Power Company |
03/31/2020 Form 10-Q | 12 | Wisconsin Electric Power Company |
March 31, 2020 | ||||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Derivative assets | ||||||||||||||||
Natural gas contracts | $ | $ | $ | $ | ||||||||||||
FTRs | ||||||||||||||||
Total derivative assets | $ | $ | $ | $ | ||||||||||||
Derivative liabilities | ||||||||||||||||
Natural gas contracts | $ | $ | $ | $ | ||||||||||||
Coal contracts | ||||||||||||||||
Total derivative liabilities | $ | $ | $ | $ | ||||||||||||
December 31, 2019 | ||||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Derivative assets | ||||||||||||||||
Natural gas contracts | $ | $ | $ | $ | ||||||||||||
FTRs | ||||||||||||||||
Coal contracts | ||||||||||||||||
Total derivative assets | $ | $ | $ | $ | ||||||||||||
Derivative liabilities | ||||||||||||||||
Natural gas contracts | $ | $ | $ | $ | ||||||||||||
Coal contracts | ||||||||||||||||
Total derivative liabilities | $ | $ | $ | $ | ||||||||||||
Three Months Ended March 31 | ||||||||
(in millions) | 2020 | 2019 | ||||||
Balance at the beginning of the period | $ | $ | ||||||
Settlements | ( | ) | ( | ) | ||||
Balance at the end of the period | $ | $ | ||||||
March 31, 2020 | December 31, 2019 | |||||||||||||||
(in millions) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Preferred stock | $ | $ | $ | $ | ||||||||||||
Long-term debt | ||||||||||||||||
03/31/2020 Form 10-Q | 13 | Wisconsin Electric Power Company |
March 31, 2020 | December 31, 2019 | |||||||||||||||
(in millions) | Derivative Assets | Derivative Liabilities | Derivative Assets | Derivative Liabilities | ||||||||||||
Other current | ||||||||||||||||
Natural gas contracts | $ | $ | $ | $ | ||||||||||||
FTRs | ||||||||||||||||
Coal contracts | ||||||||||||||||
Total other current * | ||||||||||||||||
Other long-term | ||||||||||||||||
Natural gas contracts | ||||||||||||||||
Coal contracts | ||||||||||||||||
Total other long-term * | ||||||||||||||||
Total | $ | $ | $ | $ | ||||||||||||
* | On our balance sheets, we classify derivative assets and liabilities as other current or other long-term based on the maturities of the underlying contracts. |
Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | |||||||||||
(in millions) | Volumes | Gains (Losses) | Volumes | Gains (Losses) | ||||||||
Natural gas contracts | 19.1 Dth | $ | ( | ) | 18.1 Dth | $ | ( | ) | ||||
FTRs | 5.1 MWh | 5.5 MWh | ||||||||||
Total | $ | ( | ) | $ | ||||||||
March 31, 2020 | December 31, 2019 | ||||||||||||||||
(in millions) | Derivative Assets | Derivative Liabilities | Derivative Assets | Derivative Liabilities | |||||||||||||
Gross amount recognized on the balance sheet | $ | $ | $ | $ | |||||||||||||
Gross amount not offset on the balance sheet | ( | ) | ( | ) | (1) | ( | ) | ( | ) | (2) | |||||||
Net amount | $ | $ | $ | $ | |||||||||||||
(1) | Includes cash collateral posted of $ |
(2) | Includes cash collateral posted of $ |
03/31/2020 Form 10-Q | 14 | Wisconsin Electric Power Company |
Pension Benefits | ||||||||
Three Months Ended March 31 | ||||||||
(in millions) | 2020 | 2019 | ||||||
Service cost | $ | $ | ||||||
Interest cost | ||||||||
Expected return on plan assets | ( | ) | ( | ) | ||||
Amortization of prior service cost | ||||||||
Amortization of net actuarial loss | ||||||||
Net periodic benefit cost | $ | $ | ||||||
OPEB Benefits | ||||||||
Three Months Ended March 31 | ||||||||
(in millions) | 2020 | 2019 | ||||||
Service cost | $ | $ | ||||||
Interest cost | ||||||||
Expected return on plan assets | ( | ) | ( | ) | ||||
Amortization of prior service credit | ( | ) | ( | ) | ||||
Amortization of net actuarial gain | ( | ) | ( | ) | ||||
Net periodic benefit credit | $ | ( | ) | $ | ( | ) | ||
• | Our electric utility operations are engaged in the generation, distribution, and sale of electricity to customers in southeastern Wisconsin (including metropolitan Milwaukee), east central Wisconsin, and northern Wisconsin. In addition, our steam operations produce, distribute, and sell steam to customers in metropolitan Milwaukee. Prior to April 1, 2019, we also provided electric service to Tilden, who owns an iron ore mine in the Upper Peninsula of Michigan. This customer was transferred to UMERC on April 1, 2019. |
• | Our natural gas utility operations are engaged in the purchase, distribution, and sale of natural gas to retail customers and the transportation of customer-owned natural gas in southeastern, east central, and northern Wisconsin. |
03/31/2020 Form 10-Q | 15 | Wisconsin Electric Power Company |
03/31/2020 Form 10-Q | 16 | Wisconsin Electric Power Company |
03/31/2020 Form 10-Q | 17 | Wisconsin Electric Power Company |
(in millions) | March 31, 2020 | December 31, 2019 | ||||||
Regulatory assets | $ | $ | ||||||
Reserves for future environmental remediation * | ||||||||
* | Recorded within other long-term liabilities on our balance sheets. |
03/31/2020 Form 10-Q | 18 | Wisconsin Electric Power Company |
Three Months Ended March 31 | ||||||||
(in millions) | 2020 | 2019 | ||||||
Cash paid for interest, net of amount capitalized | $ | $ | ||||||
Significant non-cash investing and financing transactions: | ||||||||
Accounts payable related to construction costs | ||||||||
2020 Effective rate increase | ||||||
Electric (1) | $ | million | / | |||
Gas (2) | $ | million | / | |||
Steam | $ | million | / | |||
ROE | ||||||
Common equity component average on a financial basis | ||||||
(1) | Amount is net of certain deferred tax benefits from the Tax Legislation that were utilized to reduce near-term rate impacts to our customers. The rate order reflects the majority of the unprotected deferred tax benefits from the Tax Legislation being amortized evenly over |
03/31/2020 Form 10-Q | 19 | Wisconsin Electric Power Company |
(2) | Amount includes certain deferred tax expense from the Tax Legislation. The rate order reflects all of the unprotected deferred tax expense from the Tax Legislation being amortized evenly over |
03/31/2020 Form 10-Q | 20 | Wisconsin Electric Power Company |
03/31/2020 Form 10-Q | 21 | Wisconsin Electric Power Company |
03/31/2020 Form 10-Q | 22 | Wisconsin Electric Power Company |
• | Subject to PSCW approval, we plan to install approximately 46 miles of natural gas transmission main in southeastern Wisconsin. This project has been designated as the "Lakeshore Lateral Project." The primary purpose of this project is to increase the quantity and reliability of natural gas service, both on a peak day and annually, in southeastern Wisconsin. Construction for the project is tentatively scheduled to begin during the fourth quarter of 2020, and the project is expected to be completed by the end of 2021. |
• | We plan to construct a LNG facility. Subject to PSCW approval, the facility would provide us with approximately one billion cubic feet of natural gas supply to meet anticipated peak demand without requiring the construction of additional interstate pipeline capacity. This facility is expected to reduce the likelihood of constraints on our natural gas system during the highest demand days of winter. Commercial operation for the LNG facility is targeted for the end of 2023. |
03/31/2020 Form 10-Q | 23 | Wisconsin Electric Power Company |
Three Months Ended March 31 | ||||||||||||||||||||
(in millions) | 2020 | 2019 | B (W) | Change Related to 2019 Tax Repairs | Remaining Change B (W) | |||||||||||||||
Operating revenues | $ | 871.0 | $ | 960.8 | $ | (89.8 | ) | $ | 25.4 | $ | (115.2 | ) | ||||||||
Cost of sales | 289.2 | 357.2 | 68.0 | — | 68.0 | |||||||||||||||
Other operation and maintenance | 204.6 | 258.9 | 54.3 | 15.3 | 39.0 | |||||||||||||||
Depreciation and amortization | 104.5 | 96.0 | (8.5 | ) | — | (8.5 | ) | |||||||||||||
Property and revenue taxes | 25.7 | 25.8 | 0.1 | — | 0.1 | |||||||||||||||
Operating income | 247.0 | 222.9 | 24.1 | 40.7 | (16.6 | ) | ||||||||||||||
Other income, net | 5.3 | 5.5 | (0.2 | ) | — | (0.2 | ) | |||||||||||||
Interest expense | 118.6 | 119.9 | 1.3 | — | 1.3 | |||||||||||||||
Income before income taxes | 133.7 | 108.5 | 25.2 | 40.7 | (15.5 | ) | ||||||||||||||
Income tax expense (benefit) | 14.7 | (6.5 | ) | (21.2 | ) | (40.7 | ) | 19.5 | ||||||||||||
Preferred stock dividend requirements | 0.3 | 0.3 | — | — | — | |||||||||||||||
Net income attributed to common shareholder | $ | 118.7 | $ | 114.7 | $ | 4.0 | $ | — | $ | 4.0 | ||||||||||
03/31/2020 Form 10-Q | 24 | Wisconsin Electric Power Company |
Three Months Ended March 31 | ||||||||||||
(in millions) | 2020 | 2019 | B (W) | |||||||||
Electric revenues | $ | 731.6 | $ | 782.5 | $ | (50.9 | ) | |||||
Fuel and purchased power | 214.4 | 239.3 | 24.9 | |||||||||
Total electric margins | 517.2 | 543.2 | (26.0 | ) | ||||||||
Natural gas revenues | 139.4 | 178.3 | (38.9 | ) | ||||||||
Cost of natural gas sold | 74.8 | 117.9 | 43.1 | |||||||||
Total natural gas margins | 64.6 | 60.4 | 4.2 | |||||||||
Total electric and natural gas margins | 581.8 | 603.6 | (21.8 | ) | ||||||||
Other operation and maintenance | 204.6 | 258.9 | 54.3 | |||||||||
Depreciation and amortization | 104.5 | 96.0 | (8.5 | ) | ||||||||
Property and revenue taxes | 25.7 | 25.8 | 0.1 | |||||||||
Operating income | $ | 247.0 | $ | 222.9 | $ | 24.1 | ||||||
Three Months Ended March 31 | ||||||||||||
(in millions) | 2020 | 2019 | B (W) | |||||||||
Operation and maintenance not included in line items below | $ | 73.8 | $ | 101.0 | $ | 27.2 | ||||||
Transmission (1) | 84.4 | 66.7 | (17.7 | ) | ||||||||
We Power (2) | 30.3 | 35.9 | 5.6 | |||||||||
Regulatory amortizations and other pass through expenses (3) | 16.1 | 24.8 | 8.7 | |||||||||
Transmission expense related to the flow through of tax repairs (4) | — | 15.3 | 15.3 | |||||||||
Transmission expense related to Tax Legislation (5) | — | 15.2 | 15.2 | |||||||||
Total other operation and maintenance | $ | 204.6 | $ | 258.9 | $ | 54.3 | ||||||
(1) | Represents transmission expense that we are authorized to collect in rates, in accordance with the PSCW's approval of escrow accounting for our American Transmission Company LLC and MISO network transmission expenses. As a result, we defer as a regulatory asset or liability, the difference between actual transmission costs and those included in rates until recovery or refund is authorized in a future rate proceeding. During the first quarter of 2020 and 2019, $78.6 million and $80.8 million, respectively, of costs were billed to us by transmission providers. |
(2) | Represents costs associated with the We Power generation units, including operating and maintenance costs we recognized. During the first quarter of 2020 and 2019, $35.1 million and $30.8 million, respectively, of operating and maintenance costs were billed to or incurred by us related to the We Power generation units, with the difference in costs billed or incurred and expenses recognized, either deferred or deducted from the regulatory asset. |
(3) | Regulatory amortizations and other pass through expenses are substantially offset in margins and therefore do not have a significant impact on operating income. |
(4) | Represents additional transmission expense recorded in 2019 associated with the flow through of tax benefits of our repair-related deferred tax liabilities starting in 2018 in accordance with a settlement agreement with the PSCW, to maintain certain regulatory asset balances at their December 31, 2017 levels. This decrease in expenses was offset in income taxes. Since our transmission regulatory asset was eliminated at December 31, 2019, there were no tax benefits used in 2020. |
(5) | Represents additional transmission expense recorded in 2019 associated with the May 2018 PSCW order requiring us to use 80% of our current 2018 tax benefit, including the amortization associated with the revaluation of deferred taxes, to reduce our transmission regulatory asset balance. Since our transmission regulatory asset was eliminated at December 31, 2019, there were no tax benefits used in 2020. |
03/31/2020 Form 10-Q | 25 | Wisconsin Electric Power Company |
Three Months Ended March 31 | |||||||||
MWh (in thousands) | |||||||||
Electric Sales Volumes | 2020 | 2019 | B (W) | ||||||
Customer Class | |||||||||
Residential | 1,886.2 | 1,989.5 | (103.3 | ) | |||||
Small commercial and industrial | 2,091.7 | 2,163.3 | (71.6 | ) | |||||
Large commercial and industrial | 1,631.5 | 2,019.8 | (388.3 | ) | |||||
Other | 34.1 | 36.4 | (2.3 | ) | |||||
Total retail | 5,643.5 | 6,209.0 | (565.5 | ) | |||||
Wholesale | 265.3 | 446.6 | (181.3 | ) | |||||
Resale | 1,797.3 | 1,094.3 | 703.0 | ||||||
Total sales in MWh | 7,706.1 | 7,749.9 | (43.8 | ) | |||||
Three Months Ended March 31 | |||||||||
Therms (in millions) | |||||||||
Natural Gas Sales Volumes | 2020 | 2019 | B (W) | ||||||
Customer Class | |||||||||
Residential | 166.8 | 196.7 | (29.9 | ) | |||||
Commercial and industrial | 90.9 | 104.6 | (13.7 | ) | |||||
Total retail | 257.7 | 301.3 | (43.6 | ) | |||||
Transport | 104.7 | 101.7 | 3.0 | ||||||
Total sales in therms | 362.4 | 403.0 | (40.6 | ) | |||||
Three Months Ended March 31 | |||||||||
Degree Days | |||||||||
Weather * | 2020 | 2019 | B (W) | ||||||
Heating (3,319 Normal) | 2,925 | 3,483 | (16.0 | )% | |||||
* | Normal degree days are based on a 20-year moving average of monthly temperatures from Mitchell International Airport in Milwaukee, Wisconsin. |
• | A $29.2 million net decrease in margins related to the impact of our rate order approved by the PSCW, effective January 1, 2020. This decrease in margins includes the impact of the savings from the Tax Legislation, including unprotected tax benefits, that we agreed to return to customers through bill credits or reductions in other regulatory assets. |
• | A $16.3 million decrease related to lower retail sales volumes, driven by warmer winter weather during the first quarter of 2020, compared with the same quarter in 2019. As measured by heating degree days, the first quarter of 2020 was 16.0% warmer than the same quarter in 2019. |
• | A $5.4 million decrease in wholesale margins driven by lower sales volumes to UMERC. UMERC's new natural gas-fired generating units in the Upper Peninsula of Michigan began commercial operation on March 31, 2019, at which time we stopped providing wholesale services to UMERC. |
• | A $4.4 million decrease in margins related to Tilden, who owns an iron ore mine located in the Upper Peninsula of Michigan. Tilden was our customer but became a customer of UMERC after UMERC's new natural gas-fired generating units began commercial operation on March 31, 2019. |
03/31/2020 Form 10-Q | 26 | Wisconsin Electric Power Company |
• | A $25.4 million increase in margins associated with the flow through of tax benefits of our repair-related deferred tax liabilities in 2019, in accordance with a settlement agreement with the PSCW to maintain certain regulatory assets at their December 31, 2017 levels. These tax benefits were no longer in effect for 2020. This increase in margins was offset in income taxes. |
• | A $6.7 million quarter-over-quarter positive impact from collections of fuel and purchased power costs compared with costs approved in rates. Under the Wisconsin fuel rules, our margins are impacted by under- or over-collections of certain fuel and purchased power costs that are less than a 2% price variance from the costs included in rates, and the remaining variance that exceeds the 2% variance is deferred. |
• | A $15.3 million decrease in transmission expense related to the flow through of tax repairs in 2019, as discussed in the notes under the other operation and maintenance table above. This decrease in transmission expense was offset in income taxes. |
• | A $15.2 million decrease in transmission expense associated with the May 2018 order from the PSCW related to our required treatment of the benefits associated with the Tax Legislation, as discussed in the notes under the other operation and maintenance table above. |
• | A $12.2 million decrease in benefit costs, primarily related to lower deferred compensation costs during the first quarter of 2020. |
• | An $8.7 million decrease in regulatory amortizations and other pass through expenses, as discussed in the notes under the other operation and maintenance table above. |
• | A $5.6 million decrease in other operation and maintenance expense related to the We Power leases as discussed in the notes under the other operation and maintenance table above. |
• | A $4.1 million decrease in electric and natural gas distribution expenses during the first quarter of 2020, partially driven by lower maintenance and storm restoration expense. |
• | A $3.5 million decrease in other operation and maintenance expense related to our power plants, driven by lower operation and maintenance associated with the retirement of the PIPP in March 2019. |
03/31/2020 Form 10-Q | 27 | Wisconsin Electric Power Company |
• | A $17.7 million increase in transmission expense, primarily driven by an increase in amortization related to escrow accounting as approved in the PSCW's 2019 rate order, which was effective January 1, 2020. See the notes under the other operation and maintenance table above for more information on escrow accounting. |
• | An $8.5 million increase in depreciation and amortization, driven by assets being placed into service as we continue to execute on our capital plan as well as an increase related to the We Power leases. |
Three Months Ended March 31 | ||||||||||||
(in millions) | 2020 | 2019 | B (W) | |||||||||
Allowance for funds used during construction – Equity | $ | 1.5 | $ | 0.6 | $ | 0.9 | ||||||
Non-service components of net periodic benefit costs | 3.9 | 1.7 | 2.2 | |||||||||
Other, net | (0.1 | ) | 3.2 | (3.3 | ) | |||||||
Other income, net | $ | 5.3 | $ | 5.5 | $ | (0.2 | ) | |||||
Three Months Ended March 31 | ||||||||||||
(in millions) | 2020 | 2019 | B (W) | |||||||||
Interest expense | $ | 118.6 | $ | 119.9 | $ | 1.3 | ||||||
Three Months Ended March 31 | |||||||||
2020 | 2019 | B (W) | |||||||
Effective tax rate | 11.0 | % | (6.0 | )% | (17.0 | )% | |||
03/31/2020 Form 10-Q | 28 | Wisconsin Electric Power Company |
(in millions) | 2020 | 2019 | Change in 2020 Over 2019 | |||||||||
Cash provided by (used in): | ||||||||||||
Operating activities | $ | 247.2 | $ | 301.2 | $ | (54.0 | ) | |||||
Investing activities | (150.2 | ) | (101.3 | ) | (48.9 | ) | ||||||
Financing activities | (114.8 | ) | (215.5 | ) | 100.7 | |||||||
(in millions) | 2020 | 2019 | Change in 2020 Over 2019 | |||||||||
Capital expenditures | $ | 153.3 | $ | 102.4 | $ | 50.9 | ||||||
• | A $90.0 million increase in cash due to lower dividends paid to our parent during the first quarter of 2020, compared with the same quarter in 2019, to balance our capital structure. |
• | An $18.9 million increase in cash related to lower net repayments of commercial paper during the first quarter of 2020, compared with the same quarter in 2019. |
03/31/2020 Form 10-Q | 29 | Wisconsin Electric Power Company |
03/31/2020 Form 10-Q | 30 | Wisconsin Electric Power Company |
(in millions) | ||||
2020 | $ | 701.9 | ||
2021 | 1,189.5 | |||
2022 | 926.7 | |||
Total | $ | 2,818.1 | ||
03/31/2020 Form 10-Q | 31 | Wisconsin Electric Power Company |
03/31/2020 Form 10-Q | 32 | Wisconsin Electric Power Company |
03/31/2020 Form 10-Q | 33 | Wisconsin Electric Power Company |
03/31/2020 Form 10-Q | 34 | Wisconsin Electric Power Company |
03/31/2020 Form 10-Q | 35 | Wisconsin Electric Power Company |
Number | Exhibit | ||
31 | Rule 13a-14(a) / 15d-14(a) Certifications | ||
32 | Section 1350 Certifications | ||
101 | Interactive Data Files | ||
101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | ||
101.SCH | Inline XBRL Taxonomy Extension Schema | ||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase | ||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase | ||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase | ||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase | ||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | ||
03/31/2020 Form 10-Q | 36 | Wisconsin Electric Power Company |
WISCONSIN ELECTRIC POWER COMPANY | ||
(Registrant) | ||
/s/ WILLIAM J. GUC | ||
Date: | May 7, 2020 | William J. Guc |
Vice President, Controller, and Assistant Corporate Secretary | ||
(Duly Authorized Officer and Chief Accounting Officer) | ||
03/31/2020 Form 10-Q | 37 | Wisconsin Electric Power Company |
1. | I have reviewed this Quarterly Report on Form 10-Q of Wisconsin Electric Power Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 7, 2020 | |
/s/ J. KEVIN FLETCHER | ||
J. Kevin Fletcher | ||
Chairman of the Board and Chief Executive Officer | ||
(Principal Executive Officer) | ||
1. | I have reviewed this Quarterly Report on Form 10-Q of Wisconsin Electric Power Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 7, 2020 | |
/s/ SCOTT J. LAUBER | ||
Scott J. Lauber | ||
Executive Vice President and Chief Financial Officer | ||
(Principal Financial Officer) | ||
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ J. KEVIN FLETCHER | |
J. Kevin Fletcher | |
Chairman of the Board and Chief Executive Officer | |
May 7, 2020 | |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ SCOTT J. LAUBER | |
Scott J. Lauber | |
Executive Vice President and Chief Financial Officer | |
May 7, 2020 | |
MATERIALS, SUPPLIES, AND INVENTORIES |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| MATERIALS, SUPPLIES, AND INVENTORIES | MATERIALS, SUPPLIES, AND INVENTORIES Our inventory consisted of:
Substantially all materials and supplies, fossil fuel inventories, and natural gas in storage are recorded using the weighted-average cost method of accounting.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GUARANTEES |
3 Months Ended |
|---|---|
Mar. 31, 2020 | |
| Guarantees [Abstract] | |
| GUARANTEES | GUARANTEES As of March 31, 2020, we had $26.0 million of standby letters of credit issued by financial institutions for the benefit of third parties that extended credit to us which automatically renew each year unless proper termination notice is given. These amounts are not reflected on our balance sheets.
|
EMPLOYEE BENEFITS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of net benefit cost (credit) | The following tables show the components of net periodic benefit cost (credit) for our benefit plans.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MATERIALS, SUPPLIES, AND INVENTORIES (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of inventory | Our inventory consisted of:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GENERAL INFORMATION - GENERAL (Details) customer in Millions |
Mar. 31, 2020
customer
|
|---|---|
| Electric | |
| Product Information [Line Items] | |
| Number Of Customers | 1.1 |
| Natural gas | |
| Product Information [Line Items] | |
| Number Of Customers | 0.5 |
EMPLOYEE BENEFITS-COSTS AND CONTRIBUTIONS (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
| Pension Benefits | ||
| Components of net periodic benefit costs | ||
| Service cost | $ 3.3 | $ 3.8 |
| Interest cost | 9.5 | 11.5 |
| Expected return on plan assets | (17.4) | (18.2) |
| Amortization of prior service (credit) cost | 0.0 | 0.1 |
| Amortization of net actuarial (gain) loss | 9.1 | 7.2 |
| Net periodic benefit (credit) cost | 4.5 | 4.4 |
| Contributions and payments related to pension and OPEB plans | 1.5 | |
| Estimated future employer contributions for the remainder of the year | 2.1 | |
| Other Postretirement Benefits | ||
| Components of net periodic benefit costs | ||
| Service cost | 1.1 | 1.2 |
| Interest cost | 1.7 | 2.4 |
| Expected return on plan assets | (3.9) | (3.5) |
| Amortization of prior service (credit) cost | (0.1) | (0.5) |
| Amortization of net actuarial (gain) loss | (2.4) | (0.4) |
| Net periodic benefit (credit) cost | (3.6) | $ (0.8) |
| Estimated future employer contributions for the remainder of the year | $ 0.3 | |
INCOME TAXES - WI 2020-2021 RATES (Details) - Public Service Commission of Wisconsin (PSCW) - Tax Cuts and Jobs Act of 2017 - 2020 and 2021 rates |
1 Months Ended |
|---|---|
Dec. 31, 2019 | |
| Electric rates | |
| Income Taxes [Line Items] | |
| Amortization period | 2 years |
| Natural gas rates | |
| Income Taxes [Line Items] | |
| Amortization period | 4 years |
GENERAL INFORMATION |
3 Months Ended |
|---|---|
Mar. 31, 2020 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| GENERAL INFORMATION | GENERAL INFORMATION Wisconsin Electric Power Company serves approximately 1.1 million electric customers and 0.5 million natural gas customers. As used in these notes, the term "financial statements" refers to the condensed financial statements. This includes the income statements, balance sheets, statements of cash flows, and statements of equity, unless otherwise noted. In this report, when we refer to "the Company," "us," "we," "our," or "ours," we are referring to Wisconsin Electric Power Company. We have prepared the unaudited interim financial statements presented in this Form 10-Q pursuant to the rules and regulations of the SEC and GAAP. Accordingly, these financial statements do not include all of the information and footnotes required by GAAP for annual financial statements. These financial statements should be read in conjunction with the consolidated financial statements and footnotes in our Annual Report on Form 10-K for the year ended December 31, 2019. Financial results for an interim period may not give a true indication of results for the year. In particular, the results of operations for the three months ended March 31, 2020 are not necessarily indicative of expected results for 2020 due to seasonal variations and other factors, including the potential effects from the COVID-19 pandemic. In management's opinion, we have included all adjustments, normal and recurring in nature, necessary for a fair presentation of our financial results.
|
CREDIT LOSSES - ROLLFORWARD OF ALLOWANCES (Details) - Utility segment $ in Millions |
3 Months Ended |
|---|---|
|
Mar. 31, 2020
USD ($)
| |
| Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
| Balance | $ 38.1 |
| Provision for credit losses | 6.9 |
| Provision for credit losses deferred for future recovery or refund | (0.2) |
| Write-offs charged against the allowance | (10.9) |
| Recovery of amounts previously written off | 5.9 |
| Balance | $ 39.8 |
SHORT-TERM DEBT AND LINES OF CREDIT - REVOLVING CREDIT FACILITIES (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
|---|---|---|
| Revolving credit facility | ||
| Letters of credit issued inside credit facility | $ 1.0 | |
| Commercial paper outstanding | 75.0 | $ 115.5 |
| Available capacity under existing credit facility | 424.0 | |
| Credit facility maturing October 2022 | ||
| Revolving credit facility | ||
| Revolving credit facility | 500.0 | |
| Commercial paper | ||
| Revolving credit facility | ||
| Commercial paper outstanding | $ 75.0 | $ 115.5 |
REGULATORY ENVIRONMENT - 2018 AND 2019 RATES (Details) - Public Service Commission of Wisconsin (PSCW) - 2018 and 2019 rates - USD ($) $ in Millions |
1 Months Ended | 24 Months Ended |
|---|---|---|
Sep. 30, 2017 |
Dec. 31, 2019 |
|
| Public Utilities, General Disclosures [Line Items] | ||
| Approved return on equity (as a percent) | 10.20% | |
| Income statement impact of flow through of repair-related deferred tax liabilities | $ 0.0 | |
| Percentage of first 50 basis points of additional utility earnings shared with customers | 50.00% | |
| Return on equity in excess of authorized amount (as a percent) | 0.50% |
SHORT-TERM DEBT AND LINES OF CREDIT (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Short-term Debt [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of short-term borrowings and weighted-average interest rates | The following table shows our short-term borrowings and their corresponding weighted-average interest rates:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of revolving credit facilities and remaining available capacity | The information in the table below relates to our revolving credit facility used to support our commercial paper borrowing program, including available capacity under this facility:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||
| COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES We have significant commitments and contingencies arising from our operations, including those related to unconditional purchase obligations, environmental matters, and enforcement and litigation matters. Unconditional Purchase Obligations We have obligations to distribute and sell electricity and natural gas to our customers and expect to recover costs related to these obligations in future customer rates. In order to meet these obligations, we routinely enter into long-term purchase and sale commitments for various quantities and lengths of time. Our minimum future commitments related to these purchase obligations as of March 31, 2020, were approximately $9.5 billion. Environmental Matters Consistent with other companies in the energy industry, we face significant ongoing environmental compliance and remediation obligations related to current and past operations. Specific environmental issues affecting us include, but are not limited to, current and future regulation of air emissions such as sulfur dioxide, nitrogen oxide, fine particulates, mercury, and GHGs; water intake and discharges; management of coal combustion products such as fly ash; and remediation of impacted properties, including former manufactured gas plant sites. Air Quality National Ambient Air Quality Standards After completing its review of the 2008 ozone standard, the EPA released a final rule in October 2015, which lowered the limit for ground-level ozone, creating a more stringent standard than the 2008 National Ambient Air Quality Standards. The EPA issued final nonattainment area designations in April 2018. The following counties within our service territory were designated as partial nonattainment: Kenosha, Manitowoc, Northern Milwaukee/Ozaukee, and Sheboygan shorelines. This re-designation was challenged in the D.C. Circuit Court of Appeals in Clean Wisconsin et al. v. U.S. Environmental Protection Agency. Petitioners in that case have argued that additional portions of Milwaukee, Waukesha, Ozaukee, and Washington Counties (among others) should be designated as nonattainment for ozone. In November 2019, the D.C. Circuit Court of Appeals heard oral arguments for that case. A decision is expected later in 2020, and we expect that any subsequent EPA re-designation, if necessary, would take place in 2021. We believe we are well positioned to meet the requirements associated with the ozone standard and do not expect to incur significant costs to comply. The State of Wisconsin is currently working with stakeholders, including us, in developing regulations for inclusion in the state implementation plan required by the rule. Mercury and Air Toxics Standards In December 2018, the EPA proposed to revise the Supplemental Cost Finding for the MATS rule as well as the CAA required RTR. The EPA was required by the United States Supreme Court to review both costs and benefits of complying with the MATS rule. After its review of costs, the EPA determined that it is not appropriate and necessary to regulate hazardous air pollutant emissions from power plants under Section 112 of the CAA. As a result, under the proposed rule, the emission standards and other requirements of the MATS rule first enacted in 2012 would remain in place. The EPA is not proposing to remove coal- and oil-fired power plants from the list of sources that are regulated under Section 112. The EPA also proposes that no revisions to MATS are warranted based on the results of the RTR. As a result, we do not expect the proposed rule to have a material impact on our financial condition or operations. Climate Change The ACE rule became effective in September 2019. This rule provides existing coal-fired generating units with standards for achieving GHG emission reductions. The rule was finalized in conjunction with two other separate and distinct rulemakings, (1) the repeal of the Clean Power Plan, and (2) revised implementing regulations for ACE, ongoing emissions guidelines, and all future emission guidelines for existing sources issued under CAA section 111(d). Every state's plan to implement ACE is required to focus on reducing GHG emissions by improving the efficiency of fossil-fueled power plants. The rule is being litigated in challenges brought in the D.C. Circuit Court of Appeals by 22 states (including Wisconsin), local governments, and certain nongovernmental organizations. Final briefs in this litigation are scheduled to be filed in August 2020, with oral arguments expected to follow. The Wisconsin Department of Natural Resources is working with state utilities and has begun the process of developing the implementation plan with respect to the ACE rule. In December 2018, the EPA proposed to revise the New Source Performance Standards for GHG emissions from new, modified, and reconstructed fossil-fueled power plants. The EPA determined that the BSER for new, modified, and reconstructed coal units is highly efficient generation that would be equivalent to supercritical steam conditions for larger units and subcritical steam conditions for smaller units. This proposed BSER would replace the determination from the previous rule, which identified BSER as partial carbon capture and storage. The EPA has reviewed comments and intends to take final action on the proposed rule later in 2020. In April 2019, WEC Energy Group issued a climate report, which analyzes its GHG reduction goals with respect to international efforts to limit future global temperature increases to less than two degrees Celsius. WEC Energy Group will evaluate potential GHG reduction pathways as climate change policies and relevant technologies evolve over time. WEC Energy Group continues to evaluate opportunities and actions that preserve fuel diversity, lower costs for our customers, and contribute toward long-term GHG emissions reductions. WEC Energy Group's current plan, which includes us, is to continue to work with its industry peers, environmental groups, public policy makers, and customers, with goals of reducing CO2 emissions. In 2019, WEC Energy Group met and exceeded its 2030 goal of reducing CO2 emissions by 40% below 2005 levels, and is re-evaluating its longer-term CO2 reduction goals. As a result of WEC Energy Group's generation reshaping plan, we retired approximately 1,500 MW of coal generation since the beginning of 2018, including the 2018 retirement of the Pleasant Prairie power plant as well as the March 2019 retirement of the PIPP. WEC Energy Group also has a goal to decrease the rate of methane emissions from the natural gas distribution lines in its network by 30% per mile by the year 2030 from a 2011 baseline. WEC Energy Group was over half way toward meeting that goal at the end of 2019. Water Quality Clean Water Act Cooling Water Intake Structure Rule In August 2014, the EPA issued a final regulation under Section 316(b) of the Clean Water Act that requires the location, design, construction, and capacity of cooling water intake structures at existing power plants to reflect the BTA for minimizing adverse environmental impacts. The rule became effective in October 2014 and applies to all of our existing generating facilities with cooling water intake structures, except for the ERGS units, which were permitted under the rules governing new facilities. We have received BTA determinations for OC 5 through OC 8 and Valley power plant. Although we currently believe that existing technology at the Port Washington Generating Station satisfies the BTA requirements, final determinations will not be made until the discharge permit is renewed for this facility, which is expected to be in 2021. Until that time, we cannot determine what, if any, intake structure or operational modifications will be required to meet the new BTA requirements for this facility. As a result of past capital investments completed to address Section 316(b) compliance, we believe our fleet overall is well positioned to meet the regulation and do not expect to incur significant costs to comply with this regulation. Steam Electric Effluent Limitation Guidelines The EPA's final 2015 ELG rule took effect in January 2016. This rule created new requirements for several types of power plant wastewaters. The two new requirements that affect us relate to discharge limits for BATW and wet FGD wastewater. As a result of past capital investments, we believe our fleet is well positioned to meet the existing ELG regulations. Our power plant facilities already have advanced wastewater treatment technologies installed that meet many of the discharge limits established by this rule. There will, however, need to be modifications to the BATW systems at OC 7 and OC 8. Also, one wastewater treatment system modification may be required for the wet FGD discharges from the six units that make up the OCPP and ERGS. Based on preliminary engineering, we estimate that compliance with the current rule will require $50 million in capital costs. The ELG requirements for BATW and wet FGD systems are currently being re-evaluated by the EPA. In September 2017, the EPA issued a final rule (Postponement Rule) to postpone the earliest compliance date to November 1, 2020 for the BATW and wet FGD wastewater requirements while it reconsiders the ELG rule. The Postponement Rule left unchanged the latest ELG rule compliance date of December 31, 2023. In November 2019, the EPA Administrator signed the proposed ELG Reconsideration Rule to revise the treatment technology requirements related to BATW and wet FGD wastewaters at existing facilities. The EPA also proposed a provision that exempts facility owners from the new BATW and wet FGD requirements if a generating unit is retired by December 31, 2028. We expect the rule to be finalized in late 2020. In the meantime, we are currently evaluating what impact, if any, the proposed rule would have on our estimated compliance cost. Land Quality Manufactured Gas Plant Remediation We have identified sites at which we or a predecessor company owned or operated a manufactured gas plant or stored manufactured gas. We have also identified other sites that may have been impacted by historical manufactured gas plant activities. We are responsible for the environmental remediation of these sites. We are also working with various state jurisdictions in our investigation and remediation planning. These sites are at various stages of investigation, monitoring, remediation, and closure. The future costs for detailed site investigation, future remediation, and monitoring are dependent upon several variables including, among other things, the extent of remediation, changes in technology, and changes in regulation. Historically, our regulators have allowed us to recover incurred costs, net of insurance recoveries and recoveries from potentially responsible parties, associated with the remediation of manufactured gas plant sites. Accordingly, we have established regulatory assets for costs associated with these sites. We have established the following regulatory assets and reserves for manufactured gas plant sites:
Enforcement and Litigation Matters We are involved in legal and administrative proceedings before various courts and agencies with respect to matters arising in the ordinary course of business. Although we are unable to predict the outcome of these matters, management believes that appropriate reserves have been established and that final settlement of these actions will not have a material effect on our financial condition or results of operations.
|
|||||||||||||||||||||||||||||||||||||||||||||||||
GENERAL INFORMATION (Policies) |
3 Months Ended |
|---|---|
Mar. 31, 2020 | |
| Accounting policies | |
| Basis of accounting | As used in these notes, the term "financial statements" refers to the condensed financial statements. This includes the income statements, balance sheets, statements of cash flows, and statements of equity, unless otherwise noted. In this report, when we refer to "the Company," "us," "we," "our," or "ours," we are referring to Wisconsin Electric Power Company. We have prepared the unaudited interim financial statements presented in this Form 10-Q pursuant to the rules and regulations of the SEC and GAAP. Accordingly, these financial statements do not include all of the information and footnotes required by GAAP for annual financial statements. These financial statements should be read in conjunction with the consolidated financial statements and footnotes in our Annual Report on Form 10-K for the year ended December 31, 2019. Financial results for an interim period may not give a true indication of results for the year. In particular, the results of operations for the three months ended March 31, 2020 are not necessarily indicative of expected results for 2020 due to seasonal variations and other factors, including the potential effects from the COVID-19 pandemic. In management's opinion, we have included all adjustments, normal and recurring in nature, necessary for a fair presentation of our financial results.
|
| Credit losses | Effective January 1, 2020, we adopted FASB ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, using the modified retrospective transition method. This ASU amends the impairment model to utilize an expected loss methodology in place of the incurred loss methodology for financial instruments, including trade receivables. The amendment requires entities to consider a broader range of information to estimate expected credit losses, which may result in earlier recognition of loss. The cumulative effect of adopting this standard was not significant to our financial statements. Our exposure to credit losses is related to our accounts receivable and unbilled revenue balances, which are generated from the sale of electricity and natural gas by our regulated utility operations. Our regulated utility operations are included in our utility segment. No accounts receivable and unbilled revenue balances were reported in the other segment at March 31, 2020. We evaluate the collectability of our accounts receivable and unbilled revenue balances considering a combination of factors. For some of our larger customers and also in circumstances where we become aware of a specific customer's inability to meet its financial obligations to us, we record a specific allowance for credit losses against amounts due in order to reduce the net recognized receivable to the amount we reasonably believe will be collected. For all other customers, we use the accounts receivable aging method to calculate an allowance for credit losses. Using this method, we classify accounts receivable into different aging buckets and calculate a reserve percentage for each aging bucket based upon historical loss rates. The calculated reserve percentages are updated on at least an annual basis, in order to ensure recent macroeconomic, political, and regulatory trends are captured in the calculation, to the extent possible. Risks identified that we do not believe are reflected in the calculated reserve percentages, are assessed on a quarterly basis to determine whether further adjustments are required. The increase recorded to our allowance for credit losses at March 31, 2020, specific to the economic risks associated with the COVID-19 pandemic, was not significant. We will continue to monitor the economic impacts of COVID-19 and the resulting effects that these impacts may have on the ability of our customers to pay their energy bills. |
| Fair value measurements | 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). Fair value accounting rules provide a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are defined as follows: Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 – Pricing inputs are observable, either directly or indirectly, but are not quoted prices included within Level 1. Level 2 includes those financial instruments that are valued using external inputs within models or other valuation methods. Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methods that result in management's best estimate of fair value. Level 3 instruments include those that may be more structured or otherwise tailored to customers' needs. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. We use a mid-market pricing convention (the mid-point price between bid and ask prices) as a practical measure for valuing certain derivative assets and liabilities. We primarily use a market approach for recurring fair value measurements and attempt to use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. When possible, we base the valuations of our derivative assets and liabilities on quoted prices for identical assets and liabilities in active markets. These valuations are classified in Level 1. The valuations of certain contracts not classified as Level 1 may be based on quoted market prices received from counterparties and/or observable inputs for similar instruments. Transactions valued using these inputs are classified in Level 2. Certain derivatives are categorized in Level 3 due to the significance of unobservable or internally-developed inputs. |
| Derivative instruments | We use derivatives as part of our risk management program to manage the risks associated with the price volatility of purchased power, generation, and natural gas costs for the benefit of our customers. Our approach is non-speculative and designed to mitigate risk. Our regulated hedging programs are approved by the PSCW. We record derivative instruments on our balance sheets as an asset or liability measured at fair value unless they qualify for the normal purchases and sales exception and are so designated. We continually assess our contracts designated as normal and will discontinue the treatment of these contracts as normal if the required criteria are no longer met. Changes in the derivative's fair value are recognized currently in earnings unless specific hedge accounting criteria are met or we receive regulatory treatment for the derivative. For most energy-related physical and financial contracts in our regulated operations that qualify as derivatives, the PSCW allows the effects of fair value accounting to be offset to regulatory assets and liabilities.
|
| New accounting pronouncements | Cloud Computing In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The standard allows entities who are customers in hosting arrangements that are service contracts to apply the existing internal-use software guidance to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The guidance specifies classification for capitalizing implementation costs and related amortization expense within the financial statements and requires additional disclosures. The adoption of ASU 2018-15, effective January 1, 2020, did not have a significant impact on our financial statements and related disclosures. Disclosure Requirements for Defined Benefit Plans In August 2018, the FASB issued ASU 2018-14, Disclosure Framework: Changes to the Disclosure Requirements for Defined Benefit Plans. The pronouncement modifies the disclosure requirements for defined benefit pension and OPEB plans. The guidance removes disclosures that are no longer considered cost beneficial, clarifies the specific requirements of disclosures and adds disclosure requirements identified as relevant. The modifications affect annual period disclosures and must be applied on a retrospective basis to all periods presented. The guidance will be effective for annual reporting periods ending after December 15, 2020, with early adoption permitted. We are currently evaluating the effects of this pronouncement on the notes to our financial statements. Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes. The new standard removes certain exceptions for performing intraperiod allocation and calculating income taxes in interim periods and also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. The guidance will be effective for annual and interim periods beginning after December 15, 2020. We will adopt the new standard effective January 1, 2021, and do not expect the adoption to have a material impact on our financial statements and related disclosures. Reference Rate Reform In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments are effective for all entities as of March 12, 2020 through December 31, 2022. We are currently evaluating the impact this guidance may have on our financial statements and related disclosures.
|
MATERIALS, SUPPLIES, AND INVENTORIES (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
|---|---|---|
| Inventory Disclosure [Abstract] | ||
| Materials and supplies | $ 147.6 | $ 148.3 |
| Fossil fuel | 53.7 | 51.1 |
| Natural gas in storage | 8.1 | 30.4 |
| Total | $ 209.4 | $ 229.8 |
REGULATORY ASSETS AND LIABILITIES - REGULATORY ASSETS (Details) - USD ($) $ in Millions |
Mar. 31, 2020 |
Dec. 31, 2019 |
|---|---|---|
| Regulatory assets | ||
| Regulatory assets | $ 2,778.3 | $ 2,755.2 |
| Finance leases | ||
| Regulatory assets | ||
| Regulatory assets | 944.8 | 930.5 |
| Plant retirements | ||
| Regulatory assets | ||
| Regulatory assets | 782.3 | 788.8 |
| Pension and OPEB costs | ||
| Regulatory assets | ||
| Regulatory assets | 450.0 | 459.4 |
| Income tax related items | ||
| Regulatory assets | ||
| Regulatory assets | 399.5 | 403.2 |
| SSR | ||
| Regulatory assets | ||
| Regulatory assets | 140.5 | 151.5 |
| Other, net | ||
| Regulatory assets | ||
| Regulatory assets | $ 61.2 | $ 21.8 |
OPERATING REVENUES NATURAL GAS UTILITY OPERATING REVENUES (Details) - Revenues from contracts with customers - Utility segment - Transferred over time - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
| Disaggregation of Operating Revenues | ||
| Revenues from contracts with customers | $ 868.0 | $ 956.7 |
| Natural gas | ||
| Disaggregation of Operating Revenues | ||
| Revenues from contracts with customers | 139.0 | 177.9 |
| Natural gas | Total retail | ||
| Disaggregation of Operating Revenues | ||
| Revenues from contracts with customers | 143.8 | 186.5 |
| Natural gas | Residential | ||
| Disaggregation of Operating Revenues | ||
| Revenues from contracts with customers | 99.5 | 125.6 |
| Natural gas | Commercial and industrial | ||
| Disaggregation of Operating Revenues | ||
| Revenues from contracts with customers | 44.3 | 60.9 |
| Natural gas | Transport | ||
| Disaggregation of Operating Revenues | ||
| Revenues from contracts with customers | 5.0 | 4.2 |
| Natural gas | Other utility | ||
| Disaggregation of Operating Revenues | ||
| Revenues from contracts with customers | $ (9.8) | $ (12.8) |
P]('7)#V0NU4^E+E>+3EV"
M;MBM4VD/!;EG9C&WMM.MG?MFLNU-[\N*DT7\8L<9)>M!0B>2=T5L!K_.0+$9
MUA2$ ,E01_*LY\GKGYJYS1"=XP?R%W+Z@
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M$ (/5'@0S4L,3!J;: W&?A2!T (3FC!:E$YK8**$BZ,D]G(#Q9^ QD3IKEH1O!SEKE0TM@8C'+"%FI?#)3PP_2>,J
MB-,IF\]XO+3$