REGULATORY ENVIRONMENT (Tables)

9 Months Ended

Sep. 30, 2019

Public Utilities, General Disclosures [Line Items]

Schedule of proposals in regulatory proceedings

The applications reflected the following proposals:



	WE					WG					WPS
2020 Effective rate increase
Electric ^{(1) (2)}	$	83	million	/	2.9%	N/A					$	49	million	/	4.9%
Gas ⁽³⁾	$	15	million	/	3.9%	$	11	million	/	1.8%	$	7	million	/	2.4%
Steam	$	1	million	/	4.5%	N/A					N/A

2021 Effective rate increase
Electric⁽¹⁾	$	83	million	/	2.9%	N/A					$	49	million	/	4.9%
Gas	N/A					N/A					$	7	million	/	2.4%

ROE	10.35%					10.30%					10.35%

Common equity component average on a financial basis	52.0%					52.0%					52.0%


⁽¹⁾	WE and WPS amounts are net of approximately $94 million and $16 million, respectively, of previously deferred unprotected tax benefits from the Tax Legislation in 2020, and $17 million and $24 million, respectively, in 2021.


⁽²⁾	WPS amount is net of approximately $21 million that would be refunded to customers related to its 2018 earnings sharing mechanism.

⁽³⁾

WPS amount is net of approximately $7 million of previously deferred unprotected tax benefits from the Tax Legislation.

August 2019 Settlement Agreement

Public Utilities, General Disclosures [Line Items]

Schedule of proposals in regulatory proceedings

The settlement agreements reflect the following:



	WE					WG					WPS
2020 Effective rate increase (decrease)
Electric ^{(1) (2)}	$	37	million	/	1.3%	N/A					$	35	million	/	3.5%
Gas ⁽³⁾	$	10	million	/	2.8%	$	(1	) million	/	(0.2)%	$	4	million	/	1.4%
Steam	$	2	million	/	10.0%	N/A					N/A

ROE	10.0%					10.2%					10.0%

Common equity component average on a financial basis	52.5%					52.5%					52.5%

⁽¹⁾

These amounts are net of previously deferred unprotected tax benefits from the Tax Legislation. The WE and WPS settlement agreements reflect the majority of the unprotected deferred tax benefits from the Tax Legislation being amortized over 2 years. For WE, approximately $65 million of tax benefits would be amortized in each of 2020 and 2021. For WPS, approximately $11 million of tax benefits would be amortized in 2020 and $39 million would be amortized in 2021. The unprotected deferred tax benefits related to the unrecovered balances of the recently retired plants and the SSR regulatory asset would be used to reduce the related regulatory asset. The initial applications filed in March 2019 proposed that these tax benefits be refunded to customers over a period of 40 years with a significant portion being refunded in the first 2 years.


⁽²⁾	The WPS settlement agreement is net of $21 million of refunds related to its 2018 earnings sharing mechanism. WPS's settlement agreement reflects these refunds being returned to customers evenly over 2 years, with half being returned in 2020 and the remainder in 2021.

⁽³⁾

The WE amount includes previously deferred unprotected tax expense from the Tax Legislation, and the WPS and WG amounts are net of previously deferred unprotected tax benefits from the Tax Legislation. The settlement agreements for all three gas utilities reflect all of the unprotected deferred tax expense and benefits from the Tax Legislation being amortized evenly over 4 years. For WE, approximately $5 million of previously deferred tax expense would be amortized each year. For WG and WPS, approximately $3 million and $5 million, respectively, of previously deferred tax benefits would be amortized each year. The initial applications filed in March 2019 proposed that these tax impacts be refunded to or collected from customers over a period of 40 years, with a significant portion of the WPS benefit being refunded in the first 2 years.