Components of Net Periodic Benefit Cost



	Three Months Ended Sept. 30
	2018			2017			2018			2017
(Thousands of Dollars)	Pension Benefits						Postretirement Health Care Benefits
Service cost	$	1,194		$	1,154		$	9		$	7
Interest cost ^(a)	1,361			1,554			142			147
Expected return on plan assets ^(a)	(2,256		)	(2,295		)	(15		)	(7		)
Amortization of prior service (credit) cost ^(a)	(8		)	35			(88		)	(88		)
Amortization of net loss ^(a)	1,418			1,462			138			109
Settlement charge ^(b)	5,181			—			—			—
Net periodic benefit cost	6,890			1,910			186			168
Costs not recognized due to the effects of regulation	(3,053		)	—			—			—
Net benefit cost recognized for financial reporting	$	3,837		$	1,910		$	186		$	168



	Nine Months Ended Sept. 30
	2018			2017			2018			2017
(Thousands of Dollars)	Pension Benefits						Postretirement Health Care Benefits
Service cost	$	3,583		$	3,463		$	27		$	21
Interest cost ^(a)	4,081			4,663			426			443
Expected return on plan assets ^(a)	(6,769		)	(6,885		)	(47		)	(23		)
Amortization of prior service (credit) cost ^(a)	(22		)	104			(264		)	(264		)
Amortization of net loss ^(a)	4,255			4,385			416			327
Settlement charge ^(b)	5,181			—			—			—
Net periodic benefit cost	10,309			5,730			558			504
Costs not recognized due to the effects of regulation	(2,832		)	—			—			—
Net benefit cost recognized for financial reporting	$	7,477		$	5,730		$	558		$	504

^(a)The components of net periodic cost other than the service cost component are included in the line item “other expense, net” in the income statement or capitalized on the balance sheet as a regulatory asset.

^(b)A settlement charge is required when the amount of lump-sum distributions during the year is greater than the sum of the service and interest cost components of the annual net periodic pension cost. In the third quarter as a result of lump-sum distributions during the 2018 plan year, NSP-Wisconsin recorded a pension settlement charge of $5 million, the majority of which was not recognized due to the effects of regulation. A total of $1 million of that amount was recorded in other expense in the third quarter of 2018. In the fourth quarter of 2018 as a result of lump-sum distributions during the 2017 plan year, NSP-Wisconsin recorded a total pension settlement charge of $7 million, the majority of which was not recognized due to the effects of regulation. A total of $2 million of that amount was expensed in the fourth quarter of 2017.