Acquisitions

12 Months Ended

Dec. 31, 2022

In accordance with Topic 805: Clarifying the Definition of a Business (ASU 2017-01), transactions are evaluated and are accounted for as acquisitions (or disposals) of assets or businesses, and transaction costs are capitalized in asset acquisitions. It was determined that all of the below acquisitions met the criteria of an asset acquisition. The purchase price of certain acquisitions described below includes intangibles recorded as long-term liabilities related to PPAs. See Note 10, Goodwill and Intangibles, for more information.

Acquisition of Wind Generation Facilities in Illinois

In February 2023, WECI completed the acquisition of a 90% ownership interest in Sapphire Sky, a commercially operational 250 MW wind generating facility in McLean County, Illinois, for a total investment of approximately $442.9 million, which includes transaction costs. The project has an offtake agreement for all of the energy to be produced by the facility for a period of 12 years. Sapphire Sky qualifies for PTCs and is included in the non-utility energy infrastructure segment.

In October 2022, WECI signed an agreement to acquire an 80% ownership interest in Maple Flats, a 250 MW solar generating facility under construction in Clay County, Illinois, for approximately $360 million. The project has an offtake agreement for all of the energy to be produced by the facility for a period of 15 years. The transaction is subject to FERC approval and commercial operation is expected to begin during the first half of 2024, at which time the transaction is expected to close. Maple Flats is expected to qualify for PTCs and will be included in the non-utility energy infrastructure segment.

In December 2020, WECI completed the acquisition of a 90% ownership interest in Blooming Grove, a commercially operational 250 MW wind generating facility in McLean County, Illinois, for a total investment of $364.6 million, which includes transaction costs and is net of restricted cash acquired of $24.1 million. Blooming Grove has offtake agreements for all the energy produced with affiliates of two investment grade multinational companies for 12 years. Blooming Grove qualifies for PTCs and is included in the non-utility energy infrastructure segment.

The table below shows the allocation of the purchase price to the assets acquired and liabilities assumed at the date of the acquisition.


(in millions)
Accounts receivable	$	0.3
Net property, plant, and equipment	488.3

Other long-term assets	2.9

Accounts payable	(13.7)
Other current liabilities	(1.5)
Other long-term liabilities	(68.7)
Noncontrolling interest	(43.0)
Total purchase price	$	364.6

Acquisition of a Solar Generation Facility in Texas

In January 2023, WECI signed an agreement to acquire an 80% ownership interest in Samson I, a 250 MW solar generating facility in Lamar County, Texas, for approximately $250 million. The project has an offtake agreement for all of the energy to be produced by the facility for a period of 15 years. Commercial operation was achieved in May 2022. Samson I is expected to qualify for PTCs and will be included in the non-utility energy infrastructure segment.

Acquisition of Electric Generation Facilities in Wisconsin

Effective January 1, 2023, WE and WPS completed the acquisition of Whitewater, a commercially operational 236.5 MW dual fueled (natural gas and low sulfur fuel oil) combined cycle electrical generation facility in Whitewater, Wisconsin, for $72.7 million, which excludes working capital and transaction costs. See Note 15, Leases, for more information.

In January 2022, WPS, along with an unaffiliated utility, received PSCW approval to acquire Red Barn, a utility-scale wind-powered electric generating facility. The project will be located in Grant County, Wisconsin and once constructed, WPS will own 82 MW of this project. WPS's share of the cost of this project is estimated to be $160 million, with commercial operation expected to begin in the first half of 2023, at which time the transaction is expected to close. Red Barn is expected to qualify for PTCs.

Acquisition of a Wind Generation Facility in Nebraska

In September 2022, WECI completed the acquisition of a 90% ownership interest in Thunderhead, a 300 MW wind generating facility in Antelope and Wheeler counties in Nebraska. The purchase price was $382.0 million, which includes transaction costs and is net of cash acquired. Thunderhead achieved commercial operation in November 2022. The project has an offtake agreement for all of the energy to be produced by the facility for a period of 12 years. Thunderhead qualifies for PTCs and is included in the non-utility energy infrastructure segment.

The table below shows the allocation of the purchase price to the assets acquired and liabilities assumed at the date of the acquisition.


(in millions)
Accounts receivable	$	0.2
Other prepayments	0.3
Net property, plant, and equipment	692.3
Other long-term assets	5.1
Other current liabilities	(0.2)
Other long-term liabilities	(273.2)
Noncontrolling interest	(42.5)
Total purchase price	$	382.0

Acquisition of a Wind Generation Facility in Kansas

In February 2021, WECI completed the acquisition of a 90% ownership interest in Jayhawk, a 190 MW wind generating facility in Bourbon and Crawford counties, Kansas, for $119.9 million, which included transaction costs. This project became commercially operational in December 2021. Subsequent to the acquisition, WECI incurred an additional $161.3 million of capital expenditures as of December 31, 2022 for the project for a total investment of $281.2 million. The project has an offtake agreement for all of the energy to be produced by the facility for a period of 10 years. Jayhawk qualifies for PTCs. WECI is entitled to 99% of the tax benefits related to this facility for the first 10 years of commercial operation, after which it will be entitled to tax benefits equal to its ownership interest. Jayhawk is included in the non-utility energy infrastructure segment.

The table below shows the allocation of the purchase price to the assets acquired and liabilities assumed at the date of the acquisition.


(in millions)
Net property, plant, and equipment	$	145.3
Other long-term liabilities	(11.8)
Long-term debt	(7.3)
Noncontrolling interest	(6.3)
Total purchase price	$	119.9

Acquisition of a Wind Generation Facility in South Dakota

In December 2020, WECI completed the acquisition of an 85% ownership interest in Tatanka Ridge, a 155 MW wind generating facility in Deuel County, South Dakota, that became commercially operational in January 2021. WECI's total investment was $239.9 million, which included transaction costs. Tatanka Ridge has offtake agreements for all the energy produced with an affiliate of an investment grade multinational company for 12 years and a well-established electric cooperative that serves utilities in multiple states for 10 years. Tatanka Ridge qualifies for PTCs. WECI is entitled to 99% of the tax benefits related to this facility for the first 11 years of commercial operation, after which it will be entitled to tax benefits equal to its ownership interest. Tatanka Ridge is included in the non-utility energy infrastructure segment.

The table below shows the allocation of the purchase price to the assets acquired and liabilities assumed at the date of the acquisition.


(in millions)
Other current assets	$	37.3
Net property, plant, and equipment	301.2
Other current liabilities	(37.3)
Other long-term liabilities	(19.3)
Noncontrolling interest	(42.0)
Total purchase price	$	239.9