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Investment in Transmission Affiliates | 12 Months Ended
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Dec. 31, 2024
Equity Method Investments and Joint Ventures [Abstract] |
INVESTMENT IN TRANSMISSION AFFILATES | INVESTMENT IN TRANSMISSION AFFILIATES We own approximately 60% of ATC, a for-profit, transmission-only company regulated by the FERC for cost of service and certain state regulatory commissions for routing and siting of transmission projects. We also own approximately 75% of ATC Holdco, a separate entity formed in December 2016 to invest in transmission-related projects outside of ATC's traditional footprint. ATC's corporate manager has a ten-member board of directors, and ATC Holdco's corporate manager has a four-member board of directors. We have one representative on each board. Each member of the board has only one vote. The following tables provide a reconciliation of the changes in our investments in ATC and ATC Holdco:
|  | 2024
(in millions) |  | ATC |  | ATC Holdco |  | Total
Balance at January 1 |  | $ | 1,980.8 |  |  | $ | 25.1 |  |  | $ | 2,005.9 |
Add: Earnings from equity method investment |  | 205.4 |  |  | 2.1 |  |  | 207.5 |
Add: Capital contributions |  | 45.5 |  |  | — |  |  | 45.5 |
Less: Distributions |  | 146.7 |  |  | 3.4 |  |  | 150.1 |
Add: Other |  | 0.1 |  |  | — |  |  | 0.1 |
Balance at December 31 |  | $ | 2,085.1 |  |  | $ | 23.8 |  |  | $ | 2,108.9 |
|  | 2023
(in millions) |  | ATC |  | ATC Holdco |  | Total
Balance at January 1 |  | $ | 1,884.6 |  |  | $ | 24.6 |  |  | $ | 1,909.2 |
Add: Earnings from equity method investment |  | 175.1 |  |  | 2.4 |  |  | 177.5 |
Add: Capital contributions |  | 63.7 |  |  | — |  |  | 63.7 |
Less: Distributions |  | 142.6 |  |  | 1.9 |  |  | 144.5 |
Balance at December 31 |  | $ | 1,980.8 |  |  | $ | 25.1 |  |  | $ | 2,005.9 |
|  | 2022
(in millions) |  | ATC |  | ATC Holdco |  | Total
Balance at January 1 |  | $ | 1,766.9 |  |  | $ | 22.5 |  |  | $ | 1,789.4 |
Add: Earnings from equity method investment |  | 192.6 |  |  | 2.1 |  |  | 194.7 |
Add: Capital contributions |  | 45.5 |  |  | — |  |  | 45.5 |
Less: Distributions |  | 120.4 |  |  | — |  |  | 120.4 |
Balance at December 31 |  | $ | 1,884.6 |  |  | $ | 24.6 |  |  | $ | 1,909.2 |
The ROE allowed by the FERC helps determine how much transmission owners, such as ATC, earn on their transmission assets as well as how much consumers pay for those assets. Two complaints were filed arguing the base ROE for MISO transmission owners was too high. In regards to the first ROE complaint, the D.C. Circuit Court of Appeals issued an opinion in August 2022 that resulted in ATC recording a reserve for potential refunds based on a 9.88% base ROE. In response to this opinion, the FERC issued an order in October 2024 that required ATC to adopt a 9.98% base ROE. Due to the change between the 9.88% base ROE originally reflected in ATC's reserve and the 9.98% base ROE authorized in the October 2024 FERC order, ATC reduced its refund liability, which increased our pre-tax equity earnings by $20.1 million during the fourth quarter of 2024. In November 2019 and May 2020, the FERC issued orders that addressed the second complaint related to ATC's ROE. In August 2022, the D.C. Circuit Court of Appeals affirmed the FERC’s orders. Therefore, during the third quarter of 2022, we reversed a $39.1 million liability for potential future refunds that ATC may have been required to provide, which increased our equity earnings from ATC. We pay ATC for network transmission and other related services it provides. In addition, we provide a variety of operational, maintenance, and project management work for ATC, which is reimbursed by ATC. We are also required to initially fund the construction of transmission infrastructure upgrades needed for new generation projects. ATC owns these transmission assets and reimburses us for these costs when the new generation is placed in service. The following table summarizes our significant related party transactions with ATC during the years ended December 31:
(in millions) |  | 2024 |  | 2023 |  | 2022
Charges to ATC for services and construction |  | $ | 21.6 |  |  | $ | 17.4 |  |  | $ | 18.9 |
Charges from ATC for network transmission services |  | 413.3 |  |  | 377.5 |  |  | 363.7 |
Net payment to ATC related to FERC ROE orders |  | — |  |  | — |  |  | (0.1) |
As of December 31, 2024 and 2023, our balance sheets included the following receivables and payables for services provided to or received from ATC:
(in millions) |  | 2024 |  | 2023
Accounts receivable for services provided to ATC |  | $ | 1.4 |  |  | $ | 1.6 |
Accounts payable for services received from ATC |  | 34.4 |  |  | 49.9 |
Amounts due from ATC for transmission infrastructure upgrades (1) |  | 54.5 |  |  | 46.1 |
(1) The transmission infrastructure upgrades were primarily related to the construction of WE's, WPS's, and UMERC's renewable energy projects. Summarized financial data for ATC is included in the tables below:
|  | Year Ended December 31
(in millions) |  | 2024 |  | 2023 |  | 2022
Income statement data |  |  |  |  |  |
Operating revenues |  | $ | 911.3 |  |  | $ | 818.9 |  |  | $ | 751.2 |
Operating expenses |  | 442.4 |  |  | 407.6 |  |  | 381.5 |
Other expense, net |  | 137.7 |  |  | 131.7 |  |  | 123.0 |
Net income |  | $ | 331.2 |  |  | $ | 279.6 |  |  | $ | 246.7 |
(in millions) |  | December 31, 2024 |  | December 31, 2023 |  |
Balance sheet data |  |  |  |  |  |
Current assets |  | $ | 126.6 |  |  | $ | 115.2 |  |  |
Noncurrent assets |  | 6,792.6 |  |  | 6,337.0 |  |  |
Total assets |  | $ | 6,919.2 |  |  | $ | 6,452.2 |  |  |
Current liabilities |  | $ | 482.4 |  |  | $ | 495.9 |  |  |
Long-term debt |  | 3,083.4 |  |  | 2,736.0 |  |  |
Other noncurrent liabilities |  | 545.0 |  |  | 585.2 |  |  |
Members' equity |  | 2,808.4 |  |  | 2,635.1 |  |  |
Total liabilities and members' equity |  | $ | 6,919.2 |  |  | $ | 6,452.2 |  |  |

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/recommendedDisclosureRef -Topic 740 -SubTopic 323 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478156/740-323-50-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (a)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 323 -Publisher FASB -URI https://asc.fasb.org/323/tableOfContent + Details
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