Regulatory Matters (Tables)

12 Months Ended

Dec. 31, 2019

Regulatory Assets and Liabilities [Table Text Block]

NOTE 4. REGULATORY MATTERS (Continued)



Regulatory Assets and Liabilities
As of December 31	2019		2018
Millions
Non-Current Regulatory Assets
Defined Benefit Pension and Other Postretirement Benefit Plans (a)		$212.9		$218.5
Income Taxes (b)	123.4		105.5
Asset Retirement Obligations (c)	32.0		32.6
Cost Recovery Riders (d)	24.7		—
Boswell 1 & 2 Net Plant and Equipment (e)	10.7		16.3
Manufactured Gas Plant (f)	8.2		8.0
PPACA Income Tax Deferral	4.8		5.0
Other	3.8		3.6
Total Non-Current Regulatory Assets		$420.5		$389.5
Current Regulatory Liabilities (g)
Provision for Interim Rate Refund (h)	—			$40.0
Provision for Tax Reform Refund (i)		$0.2	10.7
Transmission Formula Rates	1.7		4.4
Total Current Regulatory Liabilities	1.9		55.1
Non-Current Regulatory Liabilities
Income Taxes (b)	407.2		396.4
Wholesale and Retail Contra AFUDC (j)	79.3		64.4
Plant Removal Obligations (k)	35.5		25.1
Defined Benefit Pension and Other Postretirement Benefit Plans (a)	17.0		—
North Dakota Investment Tax Credits (l)	12.3		14.7
Conservation Improvement Program (m)	5.4		1.5
Cost Recovery Riders (d)	—		6.9
Transmission Formula Rates	—		1.6
Other	3.6		1.5
Total Non-Current Regulatory Liabilities	560.3		512.1
Total Regulatory Liabilities		$562.2		$567.2

(a)

Defined benefit pension and other postretirement items included in our Regulated Operations, which are otherwise required to be recognized in accumulated other comprehensive income as actuarial gains and losses as well as prior service costs and credits, are recognized as regulatory assets or regulatory liabilities on the Consolidated Balance Sheet. The asset or liability will decrease as the deferred items are amortized and recognized as components of net periodic benefit cost. (See Note 12. Pension and Other Postretirement Benefit Plans.)


(b)	These costs represent the difference between deferred income taxes recognized for financial reporting purposes and amounts previously billed to our customers. The balances will primarily decrease over the remaining life of the related temporary differences.


(c)	Asset retirement obligations will accrete and be amortized over the lives of the related property with asset retirement obligations.

(d)

The cost recovery rider regulatory assets and liabilities are revenue not yet collected from our customers and cash collections from our customers in excess of the revenue recognized, respectively, primarily due to capital expenditures related to Bison, investment in CapX2020 projects, the Boswell Unit 4 environmental upgrade and the GNTL. The cost recovery rider regulatory assets as of December 31, 2019, will be recovered within the next two years.


(e)	In December 2018, Minnesota Power retired Boswell Units 1 and 2 and reclassified the remaining net book value from property, plant and equipment to a regulatory asset on the Consolidated Balance Sheet. The remaining net book value is currently included in Minnesota Power’s rate base and Minnesota Power is earning a return on the outstanding balance.


(f)	The manufactured gas plant regulatory asset represents costs of remediation for a former manufactured gas plant site located in Superior, Wisconsin, and formerly operated by SWL&P. We expect recovery of these remediation costs to be allowed by the PSCW in rates over time.


(g)	Current regulatory liabilities are presented within Other Current Liabilities on the Consolidated Balance Sheet.


(h)	This amount was refunded to Minnesota Power’s regulated retail customers in the second quarter of 2019.


(i)	Provision for Tax Reform Refund related to the income tax benefits of the TCJA in 2018 was refunded to Minnesota Power customers in the first quarter of 2019 and is being returned to SWL&P customers through 2020.


(j)	Wholesale and retail contra AFUDC represents amortization to offset AFUDC Equity and Debt recorded during the construction period of our cost recovery rider projects prior to placing the projects in service. The regulatory liability will decrease over the remaining depreciable life of the related asset.


(k)	Non-legal plant removal obligations included in retail customer rates that have not yet been incurred.


(l)	North Dakota investment tax credits expected to be realized from Bison that will be credited to Minnesota Power’s regulated retail customers through future renewable cost recovery rider filings as the tax credits are utilized.

(m)

The conservation improvement program regulatory liability represents CIP expenditures, any financial incentive earned for cost-effective program achievements and a carrying charge deferred for future refund over the next year following MPUC approval.