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Long-Term Debt and Capital Lease Obligations | 12 Months Ended
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Dec. 31, 2016
Long-term Debt and Capital Lease Obligations [Abstract] |
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS | LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS See our statements of capitalization for details on our long-term debt. Wisconsin Gas LLC In September 2016, WG issued $200.0 million of 3.71% Debentures due September 30, 2046. The net proceeds were used to repay short-term debt. The Peoples Gas Light and Coke Company In December 2016, PGL issued $150.0 million of 3.65% Series DDD Bonds due December 15, 2046. The net proceeds were used for general corporate purposes, including capital expenditures and the refinancing of short-term debt. In November 2016, PGL issued $50.0 million of 3.65% Series CCC Bonds due December 15, 2046. The net proceeds were used to repay at maturity PGL's $50.0 million aggregate principal amount outstanding of 2.21% First and Refunding Mortgage Bonds, Series XX. In June 2016, PGL issued commercial paper to redeem at par, its $50.0 million of 4.30% Series RR First and Refunding Mortgage Bonds that were due in 2035. W.E. Power, LLC During 2017, $5.6 million of We Power's outstanding $106.7 million of 4.91% secured notes will mature. As a result, this balance was included in the current portion of long-term debt on our balance sheet at December 31, 2016. During 2017, $4.6 million of We Power's outstanding $126.1 million of 6.00% secured notes will mature. As a result, this balance was included in the current portion of long-term debt on our balance sheet at December 31, 2016. During 2017, $10.8 million of We Power's outstanding $204.8 million of 5.209% secured notes will mature. As a result, this balance was included in the current portion of long-term debt on our balance sheet at December 31, 2016. During 2017, $8.5 million of We Power's outstanding $170.9 million of 4.673% secured notes will mature. As a result, this balance was included in the current portion of long-term debt on our balance sheet at December 31, 2016. Integrys Holding, Inc. In June 2016, Integrys's $50.0 million of 8.00% unsecured senior notes matured and were repaid with contributions from WEC Energy Group, which were funded by commercial paper issued by WEC Energy Group. In February 2016, Integrys repurchased and retired $154.9 million aggregate principal amount of its 6.11% Junior Notes for a purchase price of $128.6 million, plus accrued and unpaid interest, through a modified “dutch auction” tender offer. The gain associated with this repurchase was included in other income, net on our income statement. In connection with this transaction, Integrys issued approximately $66.4 million of additional common stock to WEC Energy Group in satisfaction of its obligations under a replacement capital covenant relating to the 6.11% Junior Notes. Effective December 1, 2016, the remaining $114.9 million aggregate principal amount of the 6.11% Junior Notes bears interest at the three-month London Interbank Offered Rate (LIBOR) plus 2.12% and will reset quarterly. Bonds and Notes The following table shows the future maturities of our long-term debt outstanding (excluding obligations under capital leases) as of December 31, 2016:
(in millions) |  | Payments
2017 |  | $ | 154.5 |
2018 |  | 836.1 |
2019 |  | 357.7 |
2020 |  | 684.4 |
2021 |  | 336.2 |
Thereafter |  | 6,953.5 |
Total |  | $ | 9,322.4 |
We amortize debt premiums, discounts, and debt issuance costs over the life of the debt and we include the costs in interest expense. As of December 31, 2016, WE was the obligor under a series of tax-exempt pollution control refunding bonds with an outstanding principal amount of $80.0 million. In August 2009, WE terminated a letter of credit that provided credit and liquidity support for the bonds, which resulted in a mandatory tender of the bonds. WE purchased the bonds at par plus accrued interest to the date of purchase. As of December 31, 2016, the repurchased bonds were still outstanding, but were not reported in our long-term debt since they were held by WE. Depending on market conditions and other factors, WE may change the method used to determine the interest rate on this bond series and have it remarketed to third parties. A related bond series that had an outstanding principal amount of $67.0 million matured on August 1, 2016. In connection with our outstanding 2007 6.25% Series A Junior Subordinated Notes (6.25% Junior Notes), we executed a Replacement Capital Covenant dated May 11, 2007 (RCC), which we amended on June 29, 2015, for the benefit of persons that buy, hold, or sell a specified series of our long-term indebtedness (covered debt). Our 6.20% Senior Notes due April 1, 2033 have been designated as the covered debt under the RCC. The RCC provides that we may not redeem, defease, or purchase, and that our subsidiaries may not purchase, any 6.25% Junior Notes on or before May 15, 2037, unless, subject to certain limitations described in the RCC, we have received a specified amount of proceeds from the sale of qualifying securities. Effective May 2017, the $500 million of 6.25% Junior Notes will bear interest at the three-month LIBOR plus 211.25 basis points and will reset quarterly. In connection with Integrys’s outstanding 6.11% Junior Notes, Integrys executed a Replacement Capital Covenant dated December 1, 2006, as replaced by a new Replacement Capital Covenant on December 1, 2010 (Integrys RCC) for the benefit of persons that buy, hold, or sell a specified series of its long-term indebtedness (covered debt). Integrys’s 4.17% Senior Notes due November 1, 2020, have been designated as the covered debt under the Integrys RCC. The Integrys RCC provides that Integrys may not redeem, defease, or purchase, and that its subsidiaries may not purchase, any 6.11% Junior Notes on or before December 1, 2036, unless, subject to certain limitations described in the Integrys RCC, Integrys has received a specified amount of proceeds from the sale of qualifying securities. Effective August 2023, Integrys's $400.0 million of 2013 6.00% Junior Subordinated Notes due 2073 will bear interest at the three-month LIBOR plus 322 basis points and will reset quarterly. Certain long-term debt obligations contain financial and other covenants. Failure to comply with these covenants could result in an event of default, which could result in the acceleration of outstanding debt obligations. Obligations Under Capital Leases In 1997, WE entered into a 25-year power purchase contract with an unaffiliated independent power producer. The contract, for 236 MW of firm capacity from a natural gas-fired cogeneration facility, includes zero minimum energy requirements. When the contract expires in 2022, WE may, at its option and with proper notice, renew for another 10 years or purchase the generating facility at fair value or allow the contract to expire. We account for this contract as a capital lease and recorded the leased facility and corresponding obligation under the capital lease at the estimated fair value of the plant's electric generating facilities. We are amortizing the leased facility on a straight-line basis over the original 25-year term of the contract. We treat the long-term power purchase contract as an operating lease for rate-making purposes and we record our minimum lease payments as cost of sales on our income statements. We paid a total of $37.6 million and $36.2 million in lease payments during 2016 and 2015, respectively. We record the difference between the minimum lease payments and the sum of imputed interest and amortization costs calculated under capital lease accounting as a deferred regulatory asset on our balance sheets. Due to the timing and the amounts of the minimum lease payments, the regulatory asset increased to approximately $78.5 million during 2009, at which time the regulatory asset began to be reduced to zero over the remaining life of the contract. The total obligation under the capital lease was $29.6 million as of December 31, 2016, and will decrease to zero over the remaining life of the contract. The following is a summary of our capitalized leased facilities as of December 31:
(in millions) |  | 2016 |  | 2015
Long-term power purchase commitment |  | $ | 140.3 |  |  | $ | 140.3 |
Accumulated amortization |  | (109.5 | ) |  | (103.9 | )
Total leased facilities |  | $ | 30.8 |  |  | $ | 36.4 |
Future minimum lease payments under our capital lease and the present value of our net minimum lease payments as of December 31, 2016 are as follows:
(in millions) |  | Payments
2017 |  | $ | 13.9 |
2018 |  | 14.7 |
2019 |  | 15.5 |
2020 |  | 16.4 |
2021 |  | 17.2 |
Thereafter |  | 7.6 |
Total minimum lease payments |  | 85.3 |
Less: Estimated executory costs |  | (39.9 | )
Net minimum lease payments |  | 45.4 |
Less: Interest |  | (15.8 | )
Present value of net minimum lease payments |  | 29.6 |
Less: Due currently |  | (2.7 | )
Long-term obligations under capital lease |  | $ | 26.9 |

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- Definition The entire disclosure for debt and capital lease obligations can be reported. Information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. Also includes descriptions and amounts of capital leasing arrangements that consist of direct financing, sales type and leveraged leases. Disclosure may include the effect on the balance sheet and the income statement resulting from a change in lease classification for leases that at inception would have been classified differently had guidance been in effect at the inception of the original lease. + References No definition available. + Details
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