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Regulatory Assets and Liabilities | 12 Months Ended
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Dec. 31, 2020
Regulatory Assets and Liabilities Disclosure [Abstract] |
REGULATORY ASSETS AND LIABILITIES | REGULATORY ASSETS AND LIABILITIES The following regulatory assets were reflected on our balance sheets as of December 31:
(in millions) |  | 2020 |  | 2019 |  | See Note
Regulatory assets (1) (2) |  |  |  |  |  |
Pension and OPEB costs (3) |  | $ | 1,101.6 |  |  | $ | 1,066.6 |  |  | 20
Plant retirements |  | 740.8 |  |  | 756.4 |  |  |
Environmental remediation costs (4) |  | 638.2 |  |  | 685.5 |  |  | 24
Income tax related items |  | 454.6 |  |  | 457.8 |  |  | 16
AROs |  | 181.3 |  |  | 137.5 |  |  | 9
SSR (5) |  | 135.6 |  |  | 151.5 |  |  | 26
Securitization |  | 105.2 |  |  | 100.0 |  |  | 26
Uncollectible expense |  | 82.0 |  |  | 52.2 |  |  | 5
Derivatives |  | 26.5 |  |  | 33.8 |  |  | 1(s)
We Power generation (6) |  | 7.6 |  |  | 25.8 |  |  |
Other, net |  | 70.7 |  |  | 60.5 |  |  |
Total regulatory assets |  | $ | 3,544.1 |  |  | $ | 3,527.6 |  |  |
Balance sheet presentation |  |  |  |  |  |
Other current assets |  | $ | 20.0 |  |  | $ | 20.9 |  |  |
Regulatory assets |  | 3,524.1 |  |  | 3,506.7 |  |  |
Total regulatory assets |  | $ | 3,544.1 |  |  | $ | 3,527.6 |  |  |
(1) Based on prior and current rate treatment, we believe it is probable that our utilities will continue to recover from customers the regulatory assets in this table. In accordance with GAAP, our regulatory assets do not include the allowance for ROE that is capitalized for regulatory purposes. This allowance was $34.2 million and $24.3 million at December 31, 2020 and 2019, respectively. (2) As of December 31, 2020, we had $238.8 million of regulatory assets not earning a return, $9.7 million of regulatory assets earning a return based on short-term interest rates, and $135.6 million of regulatory assets earning a return based on long-term interest rates. The regulatory assets not earning a return primarily relate to certain environmental remediation costs, uncollectible expense, COVID-19 deferred costs, our invested capital tax rider, unamortized loss on reacquired debt, and our electric real-time market pricing program. The other regulatory assets in the table either earn a return at the applicable utility's weighted average cost of capital or the cash has not yet been expended, in which case the regulatory assets are offset by liabilities. (3) Primarily represents the unrecognized future pension and OPEB costs related to our defined benefit pension and OPEB plans. We are authorized recovery of these regulatory assets over the average remaining service life of each plan. (4) As of December 31, 2020, we had made cash expenditures of $105.3 million related to these environmental remediation costs. The remaining $532.9 million represents our estimated future cash expenditures. (5) The rate order WE received from the PSCW in December 2019 authorized recovery of the SSR regulatory asset over a 15-year period that began on January 1, 2020. (6) Represents amounts recoverable from customers related to WE's costs of the generating units leased from We Power, including subsequent capital additions. The following regulatory liabilities were reflected on our balance sheets as of December 31:
(in millions) |  | 2020 |  | 2019 |  | See Note
Regulatory liabilities |  |  |  |  |  |
Income tax related items |  | $ | 2,137.7 |  |  | $ | 2,248.8 |  |  | 16
Removal costs (1) |  | 1,221.1 |  |  | 1,181.5 |  |  |
Pension and OPEB benefits (2) |  | 378.1 |  |  | 354.9 |  |  | 20
Electric transmission costs (3) (4) |  | 78.5 |  |  | 42.2 |  |  |
Energy costs refundable through rate adjustments |  | 59.9 |  |  | 89.8 |  |  | 1(d)
Earnings sharing mechanisms (3) |  | 36.9 |  |  | 43.5 |  |  | 26
Uncollectible expense |  | 25.5 |  |  | 39.1 |  |  | 5
Derivatives |  | 16.4 |  |  | 6.7 |  |  | 1(s)
Energy efficiency programs (5) |  | 9.9 |  |  | 30.7 |  |  |
Decoupling |  | 5.2 |  |  | 36.8 |  |  | 1(d)
Other, net |  | 9.9 |  |  | 6.4 |  |  |
Total regulatory liabilities |  | $ | 3,979.1 |  |  | $ | 4,080.4 |  |  |
Balance sheet presentation |  |  |  |  |  |
Other current liabilities |  | $ | 51.0 |  |  | $ | 87.6 |  |  |
Regulatory liabilities |  | 3,928.1 |  |  | 3,992.8 |  |  |
Total regulatory liabilities |  | $ | 3,979.1 |  |  | $ | 4,080.4 |  |  |
(1) Represents amounts collected from customers to cover the future cost of property, plant, and equipment removals that are not legally required. Legal obligations related to the removal of property, plant, and equipment are recorded as AROs. See Note 9, Asset Retirement Obligations, for more information on our legal obligations. (2) Primarily represents the unrecognized future pension and OPEB benefits related to our defined benefit pension and OPEB plans. We will amortize these regulatory liabilities into net periodic benefit cost over the average remaining service life of each plan. (3) Based on orders received from the PSCW, WE was required to apply the refunds due to customers from its earnings sharing mechanism to its electric transmission escrow during 2019. As a result, $38.6 million of WE's earnings sharing refunds were reflected in its electric transmission regulatory liability at December 31, 2019. WE had no refunds due to customers from its earnings sharing mechanism at December 31, 2020. (4) In accordance with the PSCW's approval of escrow accounting for ATC and MISO network transmission expenses for our Wisconsin electric utilities, WE and WPS defer as a regulatory asset or liability the difference between actual transmission costs and those included in rates until recovery or refund is authorized in a future rate proceeding. (5) Represents amounts refundable to customers related to programs at the utilities designed to meet energy efficiency standards. Pleasant Prairie Power Plant The Pleasant Prairie power plant was retired on April 10, 2018. The net book value of this plant was $602.7 million at December 31, 2020, representing book value less cost of removal and accumulated depreciation. In addition, previously deferred unprotected tax benefits from the Tax Legislation related to the unrecovered balance of this plant were $19.6 million. The net amount of $583.1 million was classified as a regulatory asset on our balance sheets as a result of the retirement of the plant. This regulatory asset does not include certain other previously recorded deferred tax liabilities of $168.7 million related to the retired Pleasant Prairie power plant. Pursuant to its rate order issued by the PSCW in December 2019, WE will continue to amortize this regulatory asset on a straight-line basis through 2039, using the composite depreciation rates approved by the PSCW before this plant was retired. Amortization is included in depreciation and amortization in the income statement. WE has FERC approval to continue to collect the net book value of the Pleasant Prairie power plant using the approved composite depreciation rates, in addition to a return on the remaining net book value. Collection of the return of and on the net book value is no longer subject to refund as the FERC completed its prudency review and concluded that the retirement of this plant was prudent. WE received approval from the PSCW in December 2019 to collect a full return of the net book value of the Pleasant Prairie power plant, and a return on all but $100 million of the net book value. In accordance with its PSCW rate order received in December 2019, WE filed an application with the PSCW on July 20, 2020 requesting a financing order to securitize the remaining $100 million of the Pleasant Prairie power plant's book value, plus the carrying costs accrued on the $100 million during the securitization process and related fees. On November 17, 2020, the PSCW issued a written order approving this application. Presque Isle Power Plant Pursuant to MISO's April 2018 approval of the retirement of the PIPP, these units were retired on March 31, 2019. The net book value of the PIPP was $161.0 million at December 31, 2020, representing book value less cost of removal and accumulated depreciation. In addition, previously deferred unprotected tax benefits from the Tax Legislation related to the unrecovered balance of these units were $6.0 million. The net amount of $155.0 million was classified as a regulatory asset on our balance sheets as a result of the retirement of the plant. This regulatory asset does not include certain other previously recorded deferred tax liabilities of $46.0 million related to the retired PIPP. After the retirement of the PIPP, a portion of the regulatory asset and related cost of removal reserve was transferred to UMERC for recovery from its retail customers. Effective with its rate order issued by the PSCW in December 2019, WE received approval to collect a return of and on its share of the net book value of the PIPP, and as a result, will continue to amortize the regulatory assets on a straight-line basis through 2037, using the composite depreciation rates approved by the PSCW before the units were retired. UMERC will also continue to amortize the regulatory assets on a straight-line basis using the composite depreciation rates approved by the PSCW before the units were retired. Amortization is included in depreciation and amortization in the income statement. UMERC will address the accounting and regulatory treatment related to the retirement of the PIPP with the MPSC in conjunction with a future rate case. WE has FERC approval to continue to collect the net book value of the PIPP using the approved composite depreciation rates, in addition to a return on the net book value. However, this approval is subject to refund pending the outcome of settlement proceedings. Pulliam Power Plant In connection with a MISO ruling, WPS retired Pulliam Units 7 and 8 on October 21, 2018. The net book value of the Pulliam units was $42.6 million at December 31, 2020, representing book value less cost of removal and accumulated depreciation. This amount was classified as a regulatory asset on our balance sheets as a result of the retirement of the plant. Effective with its rate order issued by the PSCW in December 2019, WPS received approval to collect a return of and on the entire net book value of the Pulliam units, and as a result, will continue to amortize this regulatory asset on a straight-line basis through 2031, using the composite depreciation rates approved by the PSCW before these generating units were retired. Amortization is included in depreciation and amortization in the income statement. WPS has FERC approval to continue to collect the net book value of the Pulliam power plant using the approved composite depreciation rates, in addition to a return on the remaining net book value. FERC has completed its prudency review of Pulliam, concluding that the retirement of this plant was prudent. Edgewater Unit 4 The Edgewater 4 generating unit was retired on September 28, 2018. The net book value of the generating unit was $4.7 million at December 31, 2020, representing book value less cost of removal and accumulated depreciation. This amount was classified as a regulatory asset on our balance sheets as a result of the retirement of the plant. Effective with its rate order issued by the PSCW in December 2019, WPS received approval to collect a return of and on the entire net book value of the Edgewater 4 generating unit, and as a result, will continue to amortize this regulatory asset on a straight-line basis through 2026, using the composite depreciation rates approved by the PSCW before this generating unit was retired. Amortization is included in depreciation and amortization in the income statement. WPS has FERC approval to continue to collect the net book value of the Edgewater 4 generating unit using the approved composite depreciation rates, in addition to a return on the remaining net book value. FERC has completed its prudency review of Edgewater 4, concluding that the retirement of this plant was prudent. Severance Liability for Plant Retirements In December 2017, a severance liability of $29.4 million was recorded in other current liabilities on our balance sheets related to these plant retirements. Activity related to this severance liability for the years ended December 31 was as follows:
(in millions) |  | 2020 |  | 2019 |  | 2018
Severance liability at January 1 |  | $ | 2.1 |  |  | $ | 15.7 |  |  | $ | 29.4 |
Severance payments |  | (0.1) |  |  | (7.2) |  |  | (10.7) |
Other |  | (1.3) |  |  | (6.4) |  |  | (3.0) |
Total severance liability at December 31 |  | $ | 0.7 |  |  | $ | 2.1 |  |  | $ | 15.7 |

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- Definition The entire disclosure for detailed information about regulatory assets and liabilities, including current and noncurrent assets created when regulatory agencies permit the deferral of costs to the balance sheet that would otherwise be required to appear on the company's income statement and would be charged against current expenses or revenues, as well as current and noncurrent liabilities created when regulatory agencies permit. + References No definition available. + Details
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