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LEASES | 9 Months Ended
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Sep. 30, 2022
Lessee Disclosure [Abstract] |
LEASES | LEASES WE and WPS have partnered with an unaffiliated utility to construct Paris, a utility-scale solar-powered electric generating facility with a battery energy storage system in Kenosha County, Wisconsin. WE and WPS own 75% and 15%, respectively, of Paris. Once fully constructed, WE and WPS will collectively own 180 MW of solar generation and 99 MW of battery storage of this projec t. The PSCW has approved the acquisition and construction of P aris, and commercial operation for the solar portion of the project is targeted for 2023. Related to their investment in Paris, WE and WPS, along with their unaffiliated utility partner, entered into several land leases in Kenosha County, Wisconsin that commenced in the second quarter of 2022. Each lease has an initial construction term that ends upon achieving commercial operation, then automatically extends for 25 years with an option for an additional 25-year extension. We expect the optional extension to be exercised, and, as a result, the land leases are being amortized over the extended term of the leases. The lease payments will be recovered through rates. Our total obligation under the land-related finance leases for Paris was $56.8 million at September 30, 2022, and will decrease to zero over the remaining lives of the leases. Long-term lease liabilities related to our finance land leases for Paris were included in long-term debt on our balance sheet. Our finance lease right of use asset related to Paris was $55.7 million as of September 30, 2022, and was included in property, plant, and equipment on our balance sheet. In accordance with Accounting Standards Codification Subtopic 980-842, Regulated Operations – Leases, the expense recognition pattern associated with the Paris leases resembles that of an operating lease. The difference between the minimum lease payments and the sum of imputed interest and unadjusted amortization costs calculated under Topic 842 is deferred as a regulatory asset in accordance with Subtopic 980-842 on our balance sheet. Our weighted-average discount rate for the Paris finance leases was 5.28%. We used the fully collateralized incremental borrowing rates based upon information available for similarly rated companies in determining the present value of lease payments. Future minimum lease payments and the corresponding present value of our net minimum lease payments under the finance leases for Paris as of September 30, 2022, were as follows:
(in millions) |  |
Three months ended December 31, 2022 |  | $ | 0.8 |
2023 |  | 2.1 |
2024 |  | 2.4 |
2025 |  | 2.5 |
2026 |  | 2.5 |
2027 |  | 2.6 |
Thereafter |  | 188.7 |
Total minimum lease payments |  | 201.6 |
Less: Interest |  | (144.8) |
Present value of minimum lease payments |  | 56.8 |
Less: Short-term lease liabilities |  | — |
Long-term lease liabilities |  | $ | 56.8 |

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=77888251 + Details
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