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Commitments and Contingencies
 12 Months Ended
Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Commitments
Construction and Other Purchase Commitments: At December 31, 2020 OTP had commitments under contracts, including its share of construction program and other commitments, extending into 2022 of approximately $40 million. OTP’s other commitments charged to rent expense totaled $0.1 million, $0.3 million and $0.3 million in 2020, 2019 and 2018, respectively.
On October 1, 2019 T.O. Plastics entered into a six-year resin supply agreement that commenced on January 1, 2020. Under this resin supply agreement, there are no specified delivery volumes, rather, T.O. Plastics is required to purchase all of a specified class of regrind resin delivered by the supplier at a periodically negotiated price per pound. Based on current forecasted production levels, T.O. Plastics anticipates the quantity of resin delivered under the supply agreement will not exceed its requirements over the six-year term of the supply agreement or exceed the market cost of alternative sources of the resin. T.O. Plastics estimates it will pay the supplier approximately $1.9 million annually under this agreement.
Electric Utility Capacity and Energy Requirements and Coal Purchase and Delivery Contracts: OTP has commitments for the purchase of capacity and energy requirements under agreements extending into 2044. OTP also has contracts providing for the purchase and delivery of a significant portion of its current coal requirements. OTP’s current coal purchase agreements for Coyote Station expire at the end of 2040. OTP’s current coal purchase agreements for Big Stone Plant expire at the end of 2022. OTP has an agreement with Peabody COALSALES, LLC for the purchase of subbituminous coal for Big Stone Plant’s coal requirements through December 31, 2022. There is no fixed minimum purchase requirement under this agreement but all of Big Stone Plant’s coal requirements for the period covered must be purchased under this agreement. OTP has an all-requirements agreement with Navajo Transitional Energy Co. for the purchase of subbituminous coal for Hoot Lake Plant through December 31, 2023. There are no fixed minimum purchase requirements under this agreement.
OTP Land Easements: OTP has commitments to make future payments for land easements not classified as leases, extending into 2050 of approximately $36.7 million. Land easement payments charged to rent expense totaled $1.3 million, $0.6 million and $0.6 million in 2020, 2019 and 2018, respectively.
Our construction program and other commitments and commitments under capacity and energy agreements, coal purchase and coal delivery contracts and land easements as of December 31, 2020, are as follows:
(in thousands)Construction Program
and Other Commitments		Capacity and Energy
Requirements		Coal Purchase
Commitments		Land
Easement
Payments
2021$31,195 $16,280 $22,935 $1,900 
2022957 11,854 22,793 1,361 
2023233 11,854 23,955 1,386 
2024240 11,828 24,369 1,410 
2025247 11,784 25,103 1,436 
Beyond 20256,951 120,756 454,020 29,202 
Total$39,823 $184,356 $573,175 $36,695 
Contingencies
FERC ROE: In November 2013 and February 2015, customers filed complaints with FERC seeking to reduce the ROE component of the transmission rates that MISO transmission owners, including OTP, may collect under the MISO tariff rate. FERC's most recent order, issued on November 19, 2020, adopted a revised ROE methodology and set the base ROE at 10.02% (10.52% with an adder) effective for the fifteen-month period from November 2013 to February 2015 and on a prospective basis beginning in September 2016. The order also dismissed any complaints covering the period from February 2015 to May 2016. The November 2020 opinion is subject to judicial review. We have deferred recognition and recorded a refund liability of $3.4 million as of December 31, 2020. This refund liability reflects our best estimate of required refunds to customers once all regulatory and judicial proceedings are finalized.
Regional Haze Rule (RHR): The RHR was adopted in an effort to improve visibility in national parks and wilderness areas. The RHR requires states, in coordination with the EPA and other governmental agencies, to develop and implement plans to achieve natural visibility conditions. The second RHR implementation period covers the years of 2018 and 2028, with state implementation plans to be submitted to the EPA by July 31, 2021.
Coyote Station, OTP's jointly-owned coal-fired power plant, is subject to assessment under the North Dakota state implementation plan of the second assessment period of the RHR. We cannot predict with certainty the impact the state implementation plan may have on our business until the plan is finalized and adopted. However, significant emission control investments could be required, and the recovery of such costs from customers would require regulatory approval. Alternatively, investments in emission control equipment may prove to be uneconomic and result in a required early retirement of, or the sale of our interest in, Coyote Station. We cannot estimate the financial effects such a retirement or sale may have on our consolidated operating results, financial position or cash flows, but such amounts could be material and the recovery of such costs from customers would be subject to regulatory approval.
Other Contingencies: We are party to litigation and regulatory enforcement matters arising in the normal course of business. We regularly analyze relevant information and, as necessary, estimate and record accrued liabilities for matters in which a loss is probable of occurring and can be reasonably estimated. We believe the effect on our consolidated operating results, financial position and cash flows, if any, for the disposition of all matters pending as of December 31, 2020, other than those relating to the RHR, will not be material.