Operations and Significant Accounting Policies

3 Months Ended

Mar. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Operations and Significant Accounting Policies [Text Block]

OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

Cash, Cash Equivalents and Restricted Cash. We consider all investments purchased with original maturities of three months or less to be cash equivalents. As of March 31, 2021, restricted cash amounts included in Prepayments and Other on the Consolidated Balance Sheet include collateral deposits required under an ALLETE Clean Energy loan agreement. The restricted cash amounts included in Other Non-Current Assets represent collateral deposits required under ALLETE Clean Energy loan and tax equity financing agreements as well as PSAs. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheet that aggregate to the amounts presented in the Consolidated Statement of Cash Flows.


Cash, Cash Equivalents and Restricted Cash	March 31, 2021	December 31, 2020	March 31, 2020	December 31, 2019
Millions
Cash and Cash Equivalents	$159.0	$44.3	$67.0	$69.3
Restricted Cash included in Prepayments and Other	7.1	0.8	6.1	2.8
Restricted Cash included in Other Non-Current Assets	10.9	20.1	5.8	20.4
Cash, Cash Equivalents and Restricted Cash on the Consolidated Statement of Cash Flows	$177.0	$65.2	$78.9	$92.5

Inventories – Net. Inventories are stated at the lower of cost or net realizable value. Inventories in our Regulated Operations segment are carried at an average cost or first-in, first-out basis. Inventories in our ALLETE Clean Energy segment and Corporate and Other businesses are carried at an average cost, first-in, first-out or specific identification basis.


Inventories – Net	March 31, 2021	December 31, 2020
Millions
Fuel (a)	$20.4	$23.1
Materials and Supplies	53.6	51.1




Total Inventories – Net	$74.0	$74.2

(a) Fuel consists primarily of coal inventory at Minnesota Power.


Other Non-Current Assets	March 31, 2021	December 31, 2020
Millions
Contract Assets (a)	$24.8	$25.5

Operating Lease Right-of-use Assets	20.2	22.4
ALLETE Properties	18.2	18.2
Restricted Cash	10.9	20.1
Other Postretirement Benefit Plans	34.7	34.2
Other	82.5	86.4
Total Other Non-Current Assets	$191.3	$206.8

(a) Contract Assets consist of payments made to customers as an incentive to execute or extend service agreements. The contract payments are being amortized over the term of the respective agreements as a reduction to revenue.

NOTE 1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)


Other Current Liabilities	March 31, 2021	December 31, 2020
Millions

PSAs	$12.5	$12.5



Fuel Adjustment Clause	1.8	3.7
Operating Lease Liabilities	5.7	5.9
Other	58.9	44.6
Total Other Current Liabilities	$78.9	$66.7


Other Non-Current Liabilities	March 31, 2021	December 31, 2020
Millions
Asset Retirement Obligation (a)	$170.8	$166.6
PSAs	48.9	52.1

Operating Lease Liabilities	14.5	16.5
Other	46.0	50.1
Total Other Non-Current Liabilities	$280.2	$285.3

(a)The asset retirement obligation is primarily related to our Regulated Operations and is funded through customer rates over the life of the related assets. Additionally, BNI Energy funds its obligation through its cost-plus coal supply agreements for which BNI Energy has recorded a receivable of $25.0 million in Other Non-Current Assets on the Consolidated Balance Sheet as of March 31, 2021 and December 31, 2020.


Other Income
Three Months Ended March 31,	2021	2020
Millions
Pension and Other Postretirement Benefit Plan Non-Service Credits (a)	$1.9	$2.6
Interest and Investment Income (Loss)	1.1	(2.6)
AFUDC - Equity	0.5	0.5
Gain on Land Sales	—	0.1
Other	(0.2)	0.4
Total Other Income	$3.3	$1.0

(a)These are components of net periodic pension and other postretirement benefit cost other than service cost. (See Note 9. Pension and Other Postretirement Benefit Plans.)

Supplemental Statement of Cash Flows Information.


Three Months Ended March 31,	2021	2020
Millions
Cash Paid for Interest – Net of Amounts Capitalized	$21.2	$18.3

Noncash Investing and Financing Activities

Increase in Accounts Payable for Capital Additions to Property, Plant and Equipment	$5.6	$4.7

Capitalized Asset Retirement Costs	$3.5	$1.6
AFUDC–Equity	$0.5	$0.5

Non-Controlling Interest in Subsidiaries. Non-controlling interest in subsidiaries on the Consolidated Balance Sheet and net loss attributable to non-controlling interest on the Consolidated Statement of Income represent the portion of equity ownership and earnings, respectively, of subsidiaries that are not attributable to equity holders of ALLETE. These amounts as of and during the quarter ended March 31, 2021, are primarily related to the tax equity financing structure for ALLETE Clean Energy’s 106 MW Glen Ullin, 80 MW South Peak and 303 MW Diamond Spring wind energy facilities as well as ALLETE’s equity investment in the 250 MW Nobles 2 wind energy facility.

NOTE 1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)Subsequent Events. The Company performed an evaluation of subsequent events for potential recognition and disclosure through the date of the financial statements issuance.