Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2017

Our inventory as of December 31 consisted of:



(in millions)	2017		2016
Natural gas in storage	$	209.0	$	223.1
Materials and supplies	211.2		206.5
Fossil fuel	118.8		158.0
Total	$	539.0	$	587.6

Schedule of annual utility composite depreciation rates

Annual utility composite depreciation rates are shown below:



Annual Utility Composite Depreciation Rates	2017	2016	2015
WE	2.95%	3.00%	3.01%
WPS ⁽¹⁾	2.55%	2.58%	1.30%
WG	2.30%	2.34%	2.36%
UMERC ⁽²⁾	2.46%	N/A	N/A
PGL ⁽¹⁾	3.29%	3.31%	1.67%
NSG ⁽¹⁾	2.43%	2.44%	1.22%
MERC ⁽¹⁾	2.51%	2.53%	1.26%
MGU ⁽¹⁾	2.61%	2.63%	1.32%


⁽¹⁾	The rates shown for 2015 are for a partial year as a result of the acquisition of Integrys. The full year rate would be approximately double the rate shown.


⁽²⁾	UMERC became operational effective January 1, 2017. See Note 1(a), Nature of Operations, for more information.

Schedule of public utilities allowance for funds used during construction

Average AFUDC rates are shown below:



	2017
	Average AFUDC Retail Rate	Average AFUDC Wholesale Rate
WE	8.45%	5.94%
WPS	7.72%	1.01%
WBS	7.72%	N/A
WG	8.33%	N/A

Allowance for funds used during construction

Our regulated utilities and WBS recorded the following AFUDC for the years ended December 31:



(in millions)	2017		2016		2015
AFUDC – Debt	$	4.9	$	10.9	$	8.6
AFUDC – Equity	$	11.4	$	25.1	$	20.1

Schedule of assumptions used to estimate the fair value of stock options granted

The following table shows the estimated weighted-average fair value per stock option granted along with the weighted-average assumptions used in the valuation models:



	2017			2016			2015
Stock options granted	552,215			794,764			516,475

Estimated weighted-average fair value per stock option	$	7.45		$	5.14		$	5.29

Assumptions used to value the options:
Risk-free interest rate	0.7% – 2.5%			0.4% – 2.2%			0.1% – 2.1%
Dividend yield	3.5		%	4.0		%	3.7		%
Expected volatility	19.0		%	18.1		%	18.0		%
Expected life (years)	6.8			6.1			5.8