Regulatory Matters (Tables)

12 Months Ended

Dec. 31, 2017

Regulatory Assets and Liabilities [Table Text Block]



Regulatory Assets and Liabilities
As of December 31	2017		2016
Millions
Current Regulatory Assets (a)
Deferred Fuel Adjustment Clause	—			$18.6
Non-Current Regulatory Assets
Defined Benefit Pension and Other Postretirement Benefit Plans (b)	$220.3		226.1
Income Taxes (c)(d)	112.8		33.8
Asset Retirement Obligations (e)	29.6		26.0
Manufactured Gas Plant (f)	8.1		1.0
PPACA Income Tax Deferral	5.0		5.0
Conservation Improvement Program (g)	3.3		4.0
Cost Recovery Riders (h)	—		30.5
Other	5.6		3.7
Total Non-Current Regulatory Assets	384.7		330.1
Total Regulatory Assets		$384.7		$348.7
Non-Current Regulatory Liabilities
Income Taxes (d)		$411.2		$19.1
Wholesale and Retail Contra AFUDC (i)	57.9		56.8
Provision for Interim Rate Refund (j)	23.7		—
Plant Removal Obligations	20.3		19.1
North Dakota Investment Tax Credits (k)	14.1		28.2
Cost Recovery Riders (h)	2.2		—
Other	2.6		2.6
Total Non-Current Regulatory Liabilities		$532.0		$125.8


(a)	Current regulatory assets are presented within Prepayments and Other on the Consolidated Balance Sheet. At a hearing on January 18, 2018, the MPUC disallowed recovery of Minnesota Power’s regulatory asset for deferred fuel adjustment clause costs resulting in a $19.5 million pre-tax charge to Fuel, Purchased Power and Gas – Utility in 2017. (See 2016 Minnesota General Rate Case.)

(b)

Defined benefit pension and other postretirement items included in our Regulated Operations, which are otherwise required to be recognized in accumulated other comprehensive income as actuarial gains and losses as well as prior service costs and credits, are recognized as regulatory assets or regulatory liabilities on the Consolidated Balance Sheet. The asset or liability will decrease as the deferred items are amortized and recognized as components of net periodic benefit cost. (See Note 15. Pension and Other Postretirement Benefit Plans.)


(c)	See Note 1. Operations and Significant Accounting Policies – Revision of Prior Balance Sheet.

(d)

These costs represent the difference between deferred income taxes recognized for financial reporting purposes and amounts previously billed to our customers. The increase in 2017 is primarily due to the remeasurement of deferred income tax assets and liabilities for our Regulated Operations resulting from the TCJA. The benefits of the TCJA for Minnesota Power and SWL&P are expected to be passed back to customers over time primarily based upon the normalization provisions of the U.S. Internal Revenue Code over the life of the related property, plant and equipment with the remainder passed back based upon the determinations of regulatory authorities. (See Note 1. Operations and Significant Accounting Policies, and Tax Cuts and Jobs Act of 2017.) The balances not related to remeasurement will decrease over the remaining life of the related temporary differences and flow through current income taxes.


(e)	Asset retirement obligations will accrete and be amortized over the lives of the related property with asset retirement obligations.


(f)	The manufactured gas plant regulatory asset represents costs of remediation for a former manufactured gas plant site located in Superior, Wisconsin, and formerly operated by SWL&P. We expect recovery of these remediation costs to be allowed by the PSCW in rates over time.


(g)	The conservation improvement program regulatory asset represents CIP expenditures, any financial incentive earned for cost-effective program achievements and a carrying charge deferred for future cost recovery over the next year following MPUC approval.

(h)

The cost recovery rider regulatory assets and liabilities are revenues not yet collected from our customers and cash collections from our customers in excess of the revenue recognized, respectively, primarily due to capital expenditures related to Bison, investment in CapX2020 projects, the Boswell Unit 4 environmental upgrade and the GNTL, and are recognized in accordance with the accounting standards for alternative revenue programs. The cost recovery rider regulatory assets and liabilities as of December 31, 2017, will be recovered or returned within the next two years.


(i)	Wholesale and Retail Contra AFUDC represents amortization to offset AFUDC Equity and Debt recorded during the construction period of our cost recovery rider projects prior to placing the projects in service. The regulatory liability will decrease over the remaining depreciable life of the related asset.


(j)	This amount is expected to be refunded to Minnesota Power’s regulated retail customers in the first quarter of 2019 and includes $8.6 million of EITE discounts that will be offset against interim rate refunds. (See 2016 Minnesota General Rate Case and Energy-Intensive Trade‑Exposed Customer Rates.)


(k)	North Dakota investment tax credits expected to be realized from Bison that will be credited to Minnesota Power’s regulated retail customers through future renewable cost recovery rider fillings as the tax credits are utilized.

Regulatory Assets and Liabilities [Table Text Block]



Regulatory Assets and Liabilities
As of December 31	2017		2016
Millions
Current Regulatory Assets (a)
Deferred Fuel Adjustment Clause	—			$18.6
Non-Current Regulatory Assets
Defined Benefit Pension and Other Postretirement Benefit Plans (b)	$220.3		226.1
Income Taxes (c)(d)	112.8		33.8
Asset Retirement Obligations (e)	29.6		26.0
Manufactured Gas Plant (f)	8.1		1.0
PPACA Income Tax Deferral	5.0		5.0
Conservation Improvement Program (g)	3.3		4.0
Cost Recovery Riders (h)	—		30.5
Other	5.6		3.7
Total Non-Current Regulatory Assets	384.7		330.1
Total Regulatory Assets		$384.7		$348.7
Non-Current Regulatory Liabilities
Income Taxes (d)		$411.2		$19.1
Wholesale and Retail Contra AFUDC (i)	57.9		56.8
Provision for Interim Rate Refund (j)	23.7		—
Plant Removal Obligations	20.3		19.1
North Dakota Investment Tax Credits (k)	14.1		28.2
Cost Recovery Riders (h)	2.2		—
Other	2.6		2.6
Total Non-Current Regulatory Liabilities		$532.0		$125.8


(a)	Current regulatory assets are presented within Prepayments and Other on the Consolidated Balance Sheet. At a hearing on January 18, 2018, the MPUC disallowed recovery of Minnesota Power’s regulatory asset for deferred fuel adjustment clause costs resulting in a $19.5 million pre-tax charge to Fuel, Purchased Power and Gas – Utility in 2017. (See 2016 Minnesota General Rate Case.)

(b)


(c)	See Note 1. Operations and Significant Accounting Policies – Revision of Prior Balance Sheet.

(d)


(e)	Asset retirement obligations will accrete and be amortized over the lives of the related property with asset retirement obligations.


(f)	The manufactured gas plant regulatory asset represents costs of remediation for a former manufactured gas plant site located in Superior, Wisconsin, and formerly operated by SWL&P. We expect recovery of these remediation costs to be allowed by the PSCW in rates over time.


(g)	The conservation improvement program regulatory asset represents CIP expenditures, any financial incentive earned for cost-effective program achievements and a carrying charge deferred for future cost recovery over the next year following MPUC approval.

(h)


(i)	Wholesale and Retail Contra AFUDC represents amortization to offset AFUDC Equity and Debt recorded during the construction period of our cost recovery rider projects prior to placing the projects in service. The regulatory liability will decrease over the remaining depreciable life of the related asset.


(j)	This amount is expected to be refunded to Minnesota Power’s regulated retail customers in the first quarter of 2019 and includes $8.6 million of EITE discounts that will be offset against interim rate refunds. (See 2016 Minnesota General Rate Case and Energy-Intensive Trade‑Exposed Customer Rates.)


(k)	North Dakota investment tax credits expected to be realized from Bison that will be credited to Minnesota Power’s regulated retail customers through future renewable cost recovery rider fillings as the tax credits are utilized.