PROPERTY, PLANT, AND EQUIPMENT

6 Months Ended

Jun. 30, 2018

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT, AND EQUIPMENT

PROPERTY, PLANT, AND EQUIPMENT

Utility Segment Plant to be Retired

We have evaluated future plans for our older and less efficient fossil fuel generating units and have announced the retirement of the plants identified below. In addition, a severance liability in the amount of $3.6 million was recorded in other current liabilities on our balance sheets related to these announced plant retirements.

Pulliam Power Plant

In connection with the MISO ruling received in June 2018, Pulliam Units 7 and 8 will be retired on or before October 31, 2018. Retirement of the Pulliam generating units remained probable at June 30, 2018. The carrying value of the Pulliam units was $42.3 million at June 30, 2018. This amount included the net book value of $62.1 million, which was classified as plant to be retired within property, plant, and equipment on our balance sheet. In addition, a $19.8 million cost of removal reserve related to the Pulliam units was recorded as a regulatory liability at June 30, 2018. These units are included in rate base, and we continue to depreciate them on a straight-line basis using the composite depreciation rates approved by the PSCW. See Note 16, Commitments and Contingencies, for more information.

Edgewater Unit 4

As a result of the continued implementation of the Consent Decree related to the jointly owned Columbia and Edgewater plants, retirement of the Edgewater 4 generating unit remained probable at June 30, 2018. The plant must be retired by September 30, 2018. The carrying value of the Edgewater 4 generating unit was $12.3 million at June 30, 2018. This amount included the net book value of our ownership share of this generating unit of $14.2 million, which was classified as plant to be retired within property, plant, and equipment on our balance sheet. In addition, a $1.9 million cost of removal reserve related to the Edgewater 4 generating unit was recorded as a regulatory liability at June 30, 2018. This unit is included in rate base, and we continue to depreciate it on a straight-line basis using the composite depreciation rates approved by the PSCW. See Note 16, Commitments and Contingencies, for more information regarding the Consent Decree.