Equity Investments

12 Months Ended

Dec. 31, 2020

Equity Method Investments and Joint Ventures [Abstract]

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. For the year ended December 31, 2020 we invested $2.7 million in ATC. We expect to invest approximately $2.0 million in 2021.


ALLETE’s Investment in ATC
Year Ended December 31	2020	2019
Millions
Equity Investment Beginning Balance	$141.6	$128.1
Cash Investments	2.7	6.6
Equity in ATC Earnings	22.3	21.7
Distributed ATC Earnings	(18.9)	(16.1)

Amortization of the Remeasurement of Deferred Income Taxes	1.3	1.3
Equity Investment Ending Balance	$149.0	$141.6


ATC Summarized Financial Data
Balance Sheet Data
As of December 31	2020	2019
Millions
Current Assets	$92.8	$84.6
Non-Current Assets	5,400.5	5,244.3
Total Assets	$5,493.3	$5,328.9
Current Liabilities	$310.8	$502.6
Long-Term Debt	2,512.2	2,312.8
Other Non-Current Liabilities	378.2	298.9
Members’ Equity	2,292.1	2,214.6
Total Liabilities and Members’ Equity	$5,493.3	$5,328.9


Income Statement Data
Year Ended December 31	2020	2019	2018
Millions
Revenue	$758.1	$744.4	$690.5
Operating Expense	372.4	373.5	358.7
Other Expense	110.9	110.5	108.3
Net Income	$274.8	$260.4	$223.5
ALLETE’s Equity in Net Income	$22.3	$21.7	$17.5

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 4. Regulatory Matters.)

NOTE 5. EQUITY INVESTMENTS (Continued)

Investment in Nobles 2. Our subsidiary, ALLETE South Wind, owns a 49 percent equity interest in Nobles 2, the entity that owns and operates the 250 MW wind energy facility in southwestern Minnesota pursuant to a 20-year PPA with Minnesota Power. Construction of the wind energy facility was completed and tax equity funding of $116.3 million, net of issuance costs, was received in the fourth quarter of 2020. We account for our investment in Nobles 2 under the equity method of accounting. As of December 31, 2020, our equity investment in Nobles 2 was $152.2 million ($56.0 million at December 31, 2019). For the year ended December 31, 2020, we invested $96.4 million and results from operations were immaterial.