Asset Retirement Obligations

12 Months Ended

Dec. 31, 2022

Asset Retirement Obligation Disclosure [Abstract]

Our utilities have recorded AROs primarily for the removal of natural gas distribution mains and service pipes (including asbestos and PCBs); asbestos abatement at certain generation and substation facilities, office buildings, and service centers; the removal and dismantlement of a biomass generation facility; the dismantling of wind generation projects; the dismantling of solar generation projects; the disposal of PCB-contaminated transformers; the closure of coal combustion residual landfills at certain generation facilities; and the removal of above ground and underground storage tanks. Regulatory assets and liabilities are established by our utilities to record the differences between ongoing expense recognition under the ARO accounting rules and the ratemaking practices for retirement costs authorized by the applicable regulators.

WECI has also recorded AROs for the dismantling of our non-utility wind generation projects.

On our balance sheets, AROs are recorded within other long-term liabilities. The following table shows changes to our AROs during the years ended December 31:


(in millions)	2022			2021			2020
Balance as of January 1	$	462.0		$	513.5		$	483.5
Accretion	16.1			21.2			20.7
Additions and revisions to estimated cash flows	15.0		(1)	(53.9)		(2)	39.7		(3)
Liabilities settled	(13.8)			(18.8)			(30.4)
Balance as of December 31	$	479.3		$	462.0		$	513.5

(1) AROs increased $12.1 million in 2022, as a result of an ARO being recorded for the legal requirement to dismantle, at retirement, the Thunderhead non-utility wind generation project. Also in 2022, AROs increased $1.9 million due to revisions made to estimated cash flows primarily for changes in the cost to retire natural gas distribution mains and service pipes at PGL and NSG.

(2) AROs decreased $152.0 million in 2021, due to revisions made to estimated cash flows primarily for changes in the cost to retire natural gas distribution lines at PGL and NSG. Also in 2021, AROs increased $50.7 million due to new natural gas distribution lines being placed into service at PGL and NSG. AROs increased by $26.3 million as a result of AROs being recorded for the legal requirement to dismantle, at retirement, the Badger Hollow I solar generation project and the Tatanka Ridge and Jayhawk non-utility wind generation projects. AROs increased $7.8 million due to revisions made to removal estimates for wind generation projects at WE and WPS. AROs increased $6.8 million due to revisions made to the removal estimates for fly ash landfills and ash ponds at WPS.

(3) AROs increased $39.3 million in 2020, primarily due to new natural gas distribution lines being placed into service at PGL. Also in 2020, AROs increased by $8.5 million as a result of AROs being recorded for the legal requirement to dismantle, at retirement, the Two Creeks solar generation project. AROs decreased $9.2 million due to revisions made to estimated cash flows for the abatement of asbestos at WE.