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LEASES | 9 Months Ended
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Sep. 30, 2023
Lessee Disclosure [Abstract] |
LEASES | LEASES Obligations Under Finance Leases Land Leases – Utility Solar Generation WE and WPS partnered with an unaffiliated utility to acquire and construct Darien, a utility-scale solar-powered electric generating facility in Rock and Walworth counties, Wisconsin. WE and WPS own 75% and 15%, respectively, of Darien. Commercial operation of the project is targeted in 2024. Related to their investment in Darien, WE and WPS, along with their unaffiliated utility partner, entered into several land leases that commenced in the second quarter of 2023. 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. Once Darien achieves commercial operation, the lease liability will be remeasured to reflect the final total acres being leased. The lease payments will be recovered through rates. Our total obligation under the land-related finance leases for Darien was $40.3 million at September 30, 2023, and was included in long-term debt on our balance sheet. Our finance lease right of use asset related to Darien was $39.2 million as of September 30, 2023, and was included in property, plant, and equipment on our balance sheet. In accordance with ASC Subtopic 980-842, Regulated Operations – Leases (Subtopic 980-842), the expense recognition pattern associated with the Darien 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 on our balance sheet in accordance with Subtopic 980-842. At September 30, 2023, our weighted-average discount rate for the Darien finance leases was 5.96%. 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 Darien as of September 30, 2023, were as follows:
(in millions) |  |
Three Months Ended December 31, 2023 |  | $ | — |
2024 |  | 0.7 |
2025 |  | 1.9 |
2026 |  | 2.0 |
2027 |  | 2.0 |
2028 |  | 2.1 |
Thereafter |  | 157.7 |
Total minimum lease payments |  | 166.4 |
Less: Interest |  | (126.1) |
Present value of minimum lease payments |  | 40.3 |
Less: Short-term lease liabilities |  | — |
Long-term lease liabilities |  | $ | 40.3 |

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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 -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-20/tableOfContent + Details
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