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Investment in ATC
 9 Months Ended
Sep. 30, 2014
Investment in ATC [Abstract]  
Investment in ATC [Text Block]
INVESTMENT IN ATC

Our wholly-owned subsidiary, Rainy River Energy, owns approximately 8 percent of ATC, a Wisconsin-based utility that owns and maintains electric transmission assets in parts of Wisconsin, Michigan, Minnesota and Illinois. ATC rates are based on a FERC-approved 12.2 percent return on common equity dedicated to utility plant. We account for our investment in ATC under the equity method of accounting. As of September 30, 2014, our equity investment in ATC was $120.7 million ($114.6 million at December 31, 2013). In the first nine months of 2014, we invested $3.1 million in ATC, and on October 30, 2014, we invested an additional $0.8 million. We do not expect to make any additional investments in 2014.

ALLETE’s Investment in ATC
 
Millions
 
Equity Investment Balance as of December 31, 2013

$114.6

Cash Investments
3.1

Equity in ATC Earnings
15.6

Distributed ATC Earnings
(12.6
)
Equity Investment Balance as of September 30, 2014

$120.7



NOTE 8.  INVESTMENT IN ATC (Continued)

ATC’s summarized financial data for the quarter and nine months ended September 30, 2014 and 2013, is as follows:
 
Quarter Ended
 
Nine Months Ended
ATC Summarized Financial Data
September 30,
 
September 30,
Income Statement Data
2014
 
2013
 
2014
 
2013
Millions
 
 
 
 
 
 
 
Revenue
$163.6
 
$160.5
 

$487.0

 

$464.3

Operating Expense
76.6
 
77.6
 
229.6

 
217.2

Other Expense
21.4
 
20.2
 
65.1

 
62.6

Net Income
$65.6
 
$62.7
 

$192.3

 

$184.5

ALLETE’s Equity in Net Income

$5.3

 
$4.9
 

$15.6

 

$15.1



In November 2013, several customer groups located within the MISO service area filed a complaint with the FERC requesting, among other things, a reduction in the base return on equity used by MISO transmission owners, including ATC, to 9.15 percent. ATC's current authorized return on equity is 12.2 percent. Any change to ATC's return on equity and capital structure could result in lower equity earnings in ATC and dividends from ATC in the future. We own approximately 8 percent of ATC and estimate that for every 50 basis point reduction in ATC’s allowed return on equity our equity earnings in ATC would be impacted annually by approximately $0.5 million on an after-tax basis.