Business Segments

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

BUSINESS SEGMENTS

We present three reportable segments: Regulated Operations, ALLETE Clean Energy, and U.S. Water Services. We measure performance of our operations through budgeting and monitoring of contributions to consolidated net income by each business segment.

Regulated Operations includes three operating segments which consist of our regulated utilities, Minnesota Power and SWL&P, as well as our investment in ATC. ALLETE Clean Energy is our business focused on developing, acquiring and operating clean and renewable energy projects. U.S. Water Services was our integrated water management company, which reflects operating results until the sale in March 2019. We also present Corporate and Other which includes two operating segments, BNI Energy, our coal mining operations in North Dakota, and ALLETE Properties, our legacy Florida real estate investment, along with our investment in Nobles 2, other business development and corporate expenditures, unallocated interest expense, a small amount of non-rate base generation, approximately 4,000 acres of land in Minnesota, and earnings on cash and investments.

NOTE 13. BUSINESS SEGMENTS (Continued)

Year Ended December 31	2020	2019	2018
Millions
Operating Revenue
Residential	$140.7	$139.6	$139.7
Commercial	139.5	145.7	147.9
Municipal	41.2	48.6	54.9
Industrial	432.8	476.4	469.5
Other Power Suppliers	138.8	153.7	170.3
CIP Financial Incentive (a)	2.4	2.8	3.0
Other	91.9	75.6	74.2
Total Regulated Operations	987.3	1,042.4	1,059.5
ALLETE Clean Energy
Long-term PSA	68.3	48.0	55.2
Sale of Wind Energy Facility	—	—	81.1
Other	11.3	11.6	23.6
Total ALLETE Clean Energy	79.6	59.6	159.9
U.S. Water Services (b)
Point-in-time	—	19.0	100.3
Contract	—	9.2	38.3
Capital Project	—	5.2	33.5
Total U.S. Water Services	—	33.4	172.1
Corporate and Other
Long-term Contract	86.0	82.8	85.5
Other	16.2	22.3	21.6
Total Corporate and Other	102.2	105.1	107.1
Total Operating Revenue	$1,169.1	$1,240.5	$1,498.6
Net Income (Loss) Attributable to ALLETE (c)
Regulated Operations	$136.3	$154.4	$131.0
ALLETE Clean Energy (d)	29.9	12.4	33.7
U.S. Water Services	—	(1.1)	3.2
Corporate and Other (b)	8.0	19.9	6.2
Total Net Income Attributable to ALLETE	$174.2	$185.6	$174.1

(a)    See Note 4. Regulatory Matters.

(b)     In March 2019, ALLETE sold U.S. Water Services. The Company recognized a gain on the sale of $13.2 million after-tax which is reflected in Corporate and Other. (See Note 1. Operations and Significant Accounting Policies.)

(c)    Includes interest expense resulting from intercompany loan agreements and allocated to certain subsidiaries. The amounts are eliminated in consolidation. 

(d)    Net income in 2018 includes the recognition of profit for the sale of a wind energy facility to Montana-Dakota Utilities. 

NOTE 13. BUSINESS SEGMENTS (Continued)

Year Ended December 31	2020	2019	2018
Millions
Depreciation and Amortization
Regulated Operations	$166.9	$159.4	$158.0
ALLETE Clean Energy	37.9	26.8	24.4
U.S. Water Services	—	2.3	10.2
Corporate and Other	13.0	13.5	13.0
Total Depreciation and Amortization	$217.8	$202.0	$205.6
Operating Expenses – Other (a)
Corporate and Other	—	—	$(2.0)
Interest Expense (b)
Regulated Operations	$58.5	$58.9	$60.2
ALLETE Clean Energy	2.2	2.8	3.6
U.S. Water Services	—	0.2	1.5
Corporate and Other	13.2	8.0	7.3
Eliminations	(8.3)	(5.0)	(4.7)
Total Interest Expense	$65.6	$64.9	$67.9
Equity Earnings
Regulated Operations	$22.3	$21.7	$17.5
Corporate and Other	(0.2)	—	—
Total Equity Earnings	$22.1	$21.7	$17.5
Income Tax Expense (Benefit)
Regulated Operations	$(19.4)	$(7.1)	$(15.5)
ALLETE Clean Energy	(19.1)	(11.9)	(1.0)
U.S. Water Services	—	(0.4)	1.0
Corporate and Other (c)	(1.0)	12.8	—
Total Income Tax Benefit	$(39.5)	$(6.6)	$(15.5)

(a)    See Note 1. Operations and Significant Accounting Policies.

(b)    Includes interest expense resulting from intercompany loan agreements and allocated to certain subsidiaries. The amounts are eliminated in consolidation.    

(c) In March 2019, ALLETE sold U.S. Water Services. The Company recognized income tax expense of $10.4 million for the gain on sale of U.S. Water Services which is reflected in Corporate and Other. (See Note 1. Operations and Significant Accounting Policies.)

As of December 31	2020	2019
Millions
Assets
Regulated Operations	$4,196.8	$4,130.8
ALLETE Clean Energy	1,483.3	1,001.5
Corporate and Other	404.5	350.5
Total Assets	$6,084.6	$5,482.8
Capital Expenditures
Regulated Operations	$133.7	$230.9
ALLETE Clean Energy	507.8	385.6
Corporate and Other	15.7	10.1
Total Capital Expenditures	$657.2	$626.6