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Operations and Significant Accounting Policies | 3 Months Ended
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Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Operations and Significant Accounting Policies [Text Block] | OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES Inventories – Net. Inventories are stated at the lower of cost or net realizable value. Inventories in our Regulated Operations and ALLETE Clean Energy segments are carried at an average cost or first-in, first-out basis. Inventories in our U.S. Water Services segment and Corporate and Other operations are carried at an average cost, first-in, first-out or specific identification basis. Fuel for generation is carried at an average cost basis. Certain other inventories, including capital spares, are carried at specific cost.
Inventories – Net | March 31, 2017 |  |  | December 31, 2016 |
Millions |  |  |
Fuel (a) |  | $48.3 |  |  |  | $43.9 |
Materials and Supplies | 49.0 |  |  | 48.7 |
Raw Materials | 2.9 |  |  | 2.9 |
Work in Progress | 1.4 |  |  | 1.0 |
Finished Goods | 9.9 |  |  | 8.6 |
Reserve for Obsolescence | (1.0 | ) |  | (0.9 | )
Total Inventories – Net |  | $110.5 |  |  |  | $104.2 |
(a) | Fuel consists primarily of coal inventory at Minnesota Power.
Prepayments and Other Current Assets | March 31, 2017 |  |  | December 31, 2016 |
Millions |  |  |
Deferred Fuel Adjustment Clause |  | $18.4 |  |  |  | $18.6 |
Restricted Cash | 9.1 |  |  | 2.2 |
Other | 18.0 |  |  | 19.5 |
Total Prepayments and Other Current Assets |  | $45.5 |  |  |  | $40.3 |
Other Non-Current Assets | March 31, 2017 |  |  | December 31, 2016 |
Millions |  |  |
Contract Payment |  | $28.9 |  |  |  | $29.6 |
Finance Receivable | 11.5 |  |  | 11.5 |
Restricted Cash | 8.6 |  |  | 8.6 |
Other | 56.2 |  |  | 56.8 |
Total Other Non-Current Assets |  | $105.2 |  |  |  | $106.5 |
NOTE 1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)
Other Current Liabilities | March 31, 2017 |  |  | December 31, 2016 |
Millions |  |  |
PSAs |  | $24.6 |  |  |  | $24.6 |
Contingent Consideration (a) | 4.6 |  |  | — |
Other | 41.4 |  |  | 49.1 |
Total Other Current Liabilities |  | $70.6 |  |  |  | $73.7 |
(a) | Contingent Consideration relates to the estimated fair value of the earnings-based payment resulting from the U.S. Water Services acquisition. (See Note 5. Fair Value.)
Other Non-Current Liabilities | March 31, 2017 |  |  | December 31, 2016 |
Millions |  |  |
Asset Retirement Obligation |  | $157.2 |  |  |  | $136.6 |
PSAs | 107.6 |  |  | 113.8 |
Contingent Consideration (a) | 5.4 |  |  | 25.0 |
Other | 46.7 |  |  | 47.3 |
Total Other Non-Current Liabilities |  | $316.9 |  |  |  | $322.7 |
(a) | Contingent Consideration relates to the estimated fair value of the earnings-based payment resulting from the U.S. Water Services acquisition. (See Note 5. Fair Value.)
Supplemental Statement of Cash Flows Information.
Three Months Ended March 31, | 2017 |  |  | 2016 |
Millions |  |  |
Cash Paid During the Period for Interest – Net of Amounts Capitalized |  | $18.9 |  |  |  | $19.6 |
Noncash Investing and Financing Activities |  |  |  |  |
Decrease in Accounts Payable for Capital Additions to Property, Plant and Equipment | $(3.5) |  | $(25.6)
Capitalized Asset Retirement Costs |  | $19.3 |  |  |  | $3.5 |
AFUDC–Equity |  | $0.2 |  |  |  | $0.9 |
ALLETE Common Stock Contributed to the Pension Plan |  | $13.5 |  |  | — |
Subsequent Events. The Company performed an evaluation of subsequent events for potential recognition and disclosure through the time of the financial statements issuance. New Accounting Pronouncements. Recently Adopted Pronouncements Simplifying the Measurement of Inventory. In 2015, the FASB issued an accounting standard which requires entities that measure inventory using the first-in, first-out or average cost methods to measure inventory at the lower of cost or net realizable value. Net realizable value is defined as estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation. This accounting guidance was adopted in the first quarter of 2017 and did not have a material impact on our Consolidated Financial Statements. Improvements to Employee Share-Based Payment Accounting. In March 2016, the FASB issued guidance to simplify the accounting for share-based payment transactions by requiring all excess tax benefits and deficiencies to be recognized in income tax expense or benefit in earnings, thus eliminating the requirement to classify the excess tax benefit and deficiencies as additional paid-in capital. Under the new guidance, an entity makes an accounting policy election to either estimate the expected forfeiture awards or account for forfeitures as they occur. This accounting guidance was adopted in the first quarter of 2017. The adoption of this guidance is expected to result in a less than $1 million impact to income tax expense (benefit) annually. NOTE 1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Continued) New Accounting Pronouncements (Continued) Clarifying the Definition of a Business. In January 2017, the FASB issued clarifying guidance on the definition of a business and provided additional guidance to assist with evaluating whether transactions are to be accounted for as an acquisition or disposal of a group of assets or a business. The clarifying guidance will also impact other areas including the accounting for goodwill and consolidation. This accounting guidance was adopted in the first quarter of 2017 and did not have an impact on our Consolidated Financial Statements. Recently Issued Pronouncements Simplifying the Test for Goodwill Impairment. In January 2017, the FASB issued updated guidance which simplifies the measurement of goodwill impairment by removing step two of the goodwill impairment test that requires the determination of the fair value of individual assets and liabilities of a reporting unit. The updated guidance requires goodwill impairment to be measured as the amount by which a reporting unit’s carrying value exceeds its fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This guidance is effective for the Company beginning in the first quarter of 2020, with early adoption permitted on a prospective basis. Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. In March 2017, the FASB issued guidance to improve the presentation of net periodic pension and postretirement benefit costs. Under the new guidance, an entity shall present the service cost component of the net periodic benefit cost in the same income statement line as other employee compensation costs arising from services rendered during the period. The guidance also allows only the service cost component of the periodic expense to be eligible for capitalization. The other components of net periodic expense will be presented separately from the line item that includes the service cost and will be excluded from the operating income subtotal. This accounting guidance is effective for the Company beginning in the first quarter of 2018. The adoption of this guidance by the Company is expected to result in higher operating expense and lower operating income. This guidance is not expected to have an impact on net income. We will continue to evaluate the impact of this standard on our Consolidated Financial Statements. Revenue from Contracts with Customers. In 2014, the FASB issued amended revenue recognition guidance to clarify the principles for recognizing revenue from contracts with customers. The guidance requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required regarding customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. The Company is considering the impact of the new guidance on its ability to recognize revenue from certain contracts where collectibility is in question and bundled sales contracts and contracts with pricing provisions that may require it to recognize revenue at prices other than the contract price (e.g., straight line or estimated future market prices). The guidance is effective for the Company beginning in the first quarter of 2018 with early adoption permitted. The Company will adopt this guidance for our fiscal year beginning January 1, 2018. Leases. In February 2016, the FASB issued an accounting standard update which revises the existing guidance for leases. Under the revised guidance, lessees will be required to recognize a “right-of-use” asset and a lease liability for all leases with a term greater than 12 months. The new standard also requires additional quantitative and qualitative disclosures by lessees and lessors to enable users of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. The accounting for leases by lessors and the recognition, measurement and presentation of expenses and cash flows from leases are not expected to significantly change as a result of the updated guidance. The revised guidance is effective for the Company beginning in the first quarter of 2019 with early adoption permitted. We are currently evaluating the impact of the amended lease guidance on our Consolidated Financial Statements. Financial Instruments. In January 2016, the FASB issued an accounting standard update which requires entities to measure their investments at fair value and recognize any changes in fair value in net income unless the investments qualify for the new practicability exception. The practicability exception will be available for equity investments that do not have readily determinable fair values. The updated guidance is effective for the Company beginning in the first quarter of 2018. We are currently evaluating the impact that the standard will have on our Consolidated Financial Statements. NOTE 1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Continued) New Accounting Pronouncements (Continued) Classification of Certain Cash Receipts and Cash Payments. In August 2016, the FASB issued an accounting standard update which addresses the following eight specific cash flow issues: debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies); distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. This accounting guidance is effective for the Company beginning in the first quarter of 2018. The guidance will result in changes to the Company’s Consolidated Statement of Cash Flows relating to debt prepayments, contingent consideration payments, proceeds from insurance settlements, proceeds from corporate-owned life insurance policies and distributions received from equity method investees. Statement of Cash Flows: Restricted Cash. In November 2016, the FASB issued an accounting standard update related to the presentation of restricted cash in the Company’s Consolidated Statement of Cash Flows. The update requires that the Consolidated Statement of Cash Flows explain the change during the period in cash, cash equivalents, and restricted cash. Restricted cash should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the Consolidated Statement of Cash Flows. This accounting guidance is effective for the Company beginning in the first quarter of 2018. The Company plans to adopt this guidance for our fiscal year beginning January 1, 2018, and the guidance will result in changes to the Company’s Consolidated Statement of Cash Flows such that restricted cash amounts will be included in the beginning-of-period and end-of-period cash and cash equivalents totals. Revision of Prior Balance Sheet. During the first quarter of 2017, the Company identified an error related to the deferred income tax treatment associated with its Wholesale and Retail Contra AFUDC Regulatory Liability. The Company evaluated the materiality of the error and concluded it was not material to any previously issued historical financial statements. The Company has revised its historical Consolidated Balance Sheet as of December 31, 2016, by decreasing Regulatory Assets and Deferred Income Taxes by $29.5 million. The correction had no impact on our Consolidated Statement of Income.

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