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Note 15 - Asset Retirement Obligations (AROs)

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Asset Retirement Obligation Disclosure [Text Block]

15. Asset Retirement Obligations (AROs)

The Company’s AROs are related to OTP’s coal-fired generation plants and its 92 wind turbines located in North Dakota. The AROs include items such as site restoration, closure of ash pits, and removal of certain structures, generators, asbestos and storage tanks. The Company has legal obligations associated with the retirement of a variety of other long-lived tangible assets used in electric operations where the estimated settlement costs are individually and collectively immaterial. The Company has no assets legally restricted for the settlement of any of its AROs.

OTP recorded no new AROs in 2019.

Reconciliations of carrying amounts of the present value of the Company’s legal AROs, capitalized asset retirement costs and related accumulated depreciation and a summary of settlement activity for the years ended December 31, 2019 and 2018 are presented in the following table:

(in thousands)		2019				2018
Asset Retirement Obligations
Beginning Balance		$	9,117			$	8,719
New Obligations Recognized			-				-
Adjustments Due to Revisions in Cash Flow Estimates			3,099				-
Accrued Accretion			440				398
Settlements			-				-
Ending Balance		$	12,656			$	9,117
Asset Retirement Costs Capitalized
Beginning Balance		$	2,983			$	2,983
New Obligations Recognized			-				-
Adjustments Due to Revisions in Cash Flow Estimates			3,099				-
Settlements			-				-
Ending Balance		$	6,082			$	2,983
Accumulated Depreciation – Asset Retirement Costs Capitalized
Beginning Balance		$	1,034			$	915
New Obligations Recognized			-				-
Adjustments Due to Revisions in Cash Flow Estimates			-				-
Depreciation Expense			163				119
Settlements			-				-
Ending Balance		$	1,197			$	1,034
Settlements		None				None
Original Capitalized Asset Retirement Cost – Retired		$	-			$	-
Accumulated Depreciation			-				-
Asset Retirement Obligation		$	-			$	-
Settlement Cost			-				-
Gain on Settlement – Deferred Under Regulatory Accounting		$	-			$	-

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- Definition

The entire disclosure for an asset retirement obligation and the associated long-lived asset. An asset retirement obligation is a legal obligation associated with the disposal or retirement from service of a tangible long-lived asset that results from the acquisition, construction or development, or the normal operations of a long-lived asset, except for certain obligations of lessees.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 410
-SubTopic 20
-URI http://asc.fasb.org/subtopic&trid=2175671

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- References

No definition available.

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