Regulatory Matters (Tables)

12 Months Ended

Dec. 31, 2023

Schedule of Regulatory Assets and Liabilities


Regulatory Assets and Liabilities
As of December 31	2023	2022
Millions
Current Regulatory Assets (a)
Fuel Adjustment Clause (b)	$8.7	$25.6
Other	0.6	—
Total Current Regulatory Assets	$9.3	$25.6
Non-Current Regulatory Assets

Defined Benefit Pension and Other Postretirement Benefit Plans (c)	$218.6	$225.9

Income Taxes (d)	88.1	97.6
Asset Retirement Obligations (e)	37.7	35.6
Cost Recovery Riders (f)	33.8	41.2
Taconite Harbor (g)	20.9	—
Manufactured Gas Plant (h)	13.2	15.1
Fuel Adjustment Clause (b)	5.0	14.5
PPACA Income Tax Deferral	3.9	4.1


Other	4.2	7.0
Total Non-Current Regulatory Assets	$425.4	$441.0


Current Regulatory Liabilities (i)
Provision for Interim Rate Refund	—	$18.4


Transmission Formula Rates Refund	$1.5	4.9
Other	2.4	0.1
Total Current Regulatory Liabilities	$3.9	$23.4
Non-Current Regulatory Liabilities

Income Taxes (d)	$310.0	$332.5
Wholesale and Retail Contra AFUDC (j)	78.0	80.7
Plant Removal Obligations (k)	67.0	60.0

Defined Benefit Pension and Other Postretirement Benefit Plans (c)	48.6	17.6
Non-Jurisdictional Land Sales (l)	30.2	7.5
Fuel Adjustment Clause (b)	15.5	—
Investment Tax Credits (m)	13.6	16.9
Boswell Units 1 and 2 Net Plant and Equipment (n)	6.7	6.7


Other	4.4	4.2
Total Non-Current Regulatory Liabilities	$574.0	$526.1

(a)Current regulatory assets are presented within Prepayments and Other on the Consolidated Balance Sheet.

(b)Fuel adjustment clause regulatory assets and liabilities represent the amount expected to be recovered from or refunded to customers for the under- or over-collection of fuel adjustment clause recoveries. (See Fuel Adjustment Clause.)

(c)Defined benefit pension and other postretirement items included in our Regulated Operations, which are otherwise required to be recognized in accumulated other comprehensive income, 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 12. Pension and Other Postretirement Benefit Plans.)

(d)These costs represent the difference between deferred income taxes recognized for financial reporting purposes and amounts previously billed to our customers. The balances will primarily decrease over the remaining life of the related temporary differences.

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

(f)The cost recovery rider regulatory assets and liabilities are revenue 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 and the GNTL as well as differences between production tax credits recognized and those assumed in Minnesota Power’s base rates. The cost recovery rider regulatory assets as of December 31, 2023, will be recovered within the next two years.

(g)In the first quarter of 2023, Minnesota Power retired Taconite Harbor Units 1 and 2. The remaining net book value was reclassified from property, plant and equipment to a regulatory asset on the Consolidated Balance Sheet when the units were retired. Minnesota Power expects to receive recovery of the remaining net book value from customers.

(h)This 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.

(i)Current regulatory liabilities are presented within Other Current Liabilities on the Consolidated Balance Sheet.

(j)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.

(k)Non-legal plant removal obligations included in retail customer rates that have not yet been incurred.

(l)This regulatory liability represents the net proceeds from the sale of certain land by Minnesota Power that is expected to be refunded to ratepayers through a future rate case or through its renewable resources rider.

(m)North Dakota and Federal investment tax credits expected to be realized from Minnesota Power’s Bison facility and SWL&P’s community solar facility that will be credited to retail customers primarily through future renewable cost recovery rider as the tax credits are utilized.

(n)In 2018, Minnesota Power retired Boswell Units 1 and 2 and reclassified the remaining net book value from property, plant and equipment to a regulatory asset on the Consolidated Balance Sheet. The remaining net book value is currently included in Minnesota Power’s rate base and Minnesota Power is earning a return on the outstanding balance.