Regulatory Matters (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of Regulatory Assets and Liabilities


Regulatory Assets and Liabilities
As of December 31	2020	2019
Millions



Non-Current Regulatory Assets

Defined Benefit Pension and Other Postretirement Benefit Plans (a)	$259.7	$212.9

Income Taxes (b)	113.7	123.4
Asset Retirement Obligations (c)	31.6	32.0
Cost Recovery Riders (d)	54.0	24.7
Boswell Units 1 and 2 Net Plant and Equipment (e)	5.0	10.7
Manufactured Gas Plant (f)	8.8	8.2
PPACA Income Tax Deferral	4.5	4.8

Other	3.6	3.8
Total Non-Current Regulatory Assets	$480.9	$420.5


Current Regulatory Liabilities (g)
Fuel Adjustment Clause (h)	$3.7	—

Transmission Formula Rates	2.9	$1.7
Other	1.0	0.2
Total Current Regulatory Liabilities	7.6	1.9
Non-Current Regulatory Liabilities

Income Taxes (b)	375.3	407.2
Wholesale and Retail Contra AFUDC (i)	86.6	79.3

Plant Removal Obligations (j)	41.2	35.5
Defined Benefit Pension and Other Postretirement Benefit Plans (a)	4.4	17.0
North Dakota Investment Tax Credits (k)	12.0	12.3
Conservation Improvement Program (l)	1.5	5.4


Other	3.8	3.6
Total Non-Current Regulatory Liabilities	524.8	560.3
Total Regulatory Liabilities	$532.4	$562.2

(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 11. 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, 2020, will be recovered within the next two years.

(e)In 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)Fuel adjustment clause regulatory liability represents the amount expected to be refunded to customers for the over-collection of fuel adjustment clause recoveries. (See Fuel Adjustment Clause Reform.)

(i)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.

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

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

(l)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.