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Regulatory Matters | 12 Months Ended
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Dec. 31, 2024
Regulatory Assets and Liabilities Disclosure [Abstract] |
Regulatory Matters | Regulatory Matters Regulatory Assets and Liabilities The following presents our current and long-term regulatory assets and liabilities as of December 31, 2024 and 2023 and the period we expect to recover or refund such amounts:
| Period of |  | 2024 |  | 2023
(in thousands) | Recovery/Refund |  | Current |  | Long-Term |  | Current |  | Long-Term
Regulatory Assets |  |  |  |  |  |  |  |  |
Pension and Other Postretirement Benefit Plans 1 | See below |  | $ | — |  |  | $ | 88,161 |  |  | $ | 154 |  |  | $ | 86,134 |
Alternative Revenue Program Riders 2 | Up to 2 years |  | 4,257 |  |  | 195 |  |  | 3,719 |  |  | 158 |
Deferred Income Taxes | Asset lives |  | — |  |  | 8,944 |  |  | — |  |  | 6,940 |
Fuel Clause Adjustments 1 | Up to 1 year |  | 2,218 |  |  | — |  |  | 7,294 |  |  | — |
Derivative Instruments 1 | Up to 1 year |  | 1,989 |  |  | — |  |  | 4,210 |  |  | — |
Other 1 | Various |  | 1,498 |  |  | 1,373 |  |  | 750 |  |  | 2,483 |
Total Regulatory Assets |  |  | 9,962 |  |  | 98,673 |  |  | 16,127 |  |  | 95,715 |
Regulatory Liabilities |  |  |  |  |  |  |  |  |
Deferred Income Taxes | Asset lives |  | — |  |  | 130,387 |  |  | — |  |  | 136,022 |
Plant Removal Obligations | Asset lives |  | — |  |  | 126,263 |  |  | — |  |  | 117,030 |
Fuel Clause Adjustments | Up to 1 year |  | 11,432 |  |  | — |  |  | 11,350 |  |  | — |
Alternative Revenue Program Riders | Up to 1 year |  | 14,255 |  |  | — |  |  | 6,885 |  |  | — |
North Dakota PTC Refunds | Asset lives |  | — |  |  | 20,099 |  |  | — |  |  | 12,011 |
Pension and Other Postretirement Benefit Plans | See below |  | 2,547 |  |  | 10,758 |  |  | 6,138 |  |  | 11,307 |
Other | Various |  | 1,073 |  |  | 1,421 |  |  | 1,035 |  |  | 177 |
Total Regulatory Liabilities |  |  | $ | 29,307 |  |  | $ | 288,928 |  |  | $ | 25,408 |  |  | $ | 276,547 |
1 Costs subject to recovery without a rate of return. |  |  |  |  |  |
2 Amount eligible for recovery includes an incentive or rate of return. |  |  |  |  |  |
Pension and Other Postretirement Benefit Plans represent benefit costs and actuarial losses and gains subject to recovery or refund through rates as they are expensed or amortized. These unrecognized benefit costs and actuarial losses and gains are eligible for treatment as regulatory assets or liabilities based on their probable inclusion in future electric rates. Alternative Revenue Program Riders regulatory assets and liabilities are revenues not yet collected from customers or amounts collected from customers that are subject to refund, respectively, primarily due to investments in qualifying transmission, conservation, renewable resource, environmental and other generation assets, and the impact of decoupling. Deferred Income Taxes primarily represent the revaluation of accumulated deferred income taxes arising from the change in the federal income tax rate in 2017. This amount is being refunded to customers over the estimated lives of the property assets from which the deferred income taxes originated. Fuel Clause Adjustments represent the under- or over-collection of fuel costs relative to the estimated cost of fuel included in customer rates, which will be collected from or returned to customers in future periods. Derivative Instruments represent unrealized losses recognized on derivative instruments. On final settlement of such instruments, any realized losses are recovered from customers. Plant Removal Obligations represent amounts collected from customers to be used to cover actual removal costs as incurred. North Dakota PTC Refunds represent PTCs earned from our wind energy facilities. These amounts are being allocated to customers over the lives of the assets generating the credits. Other regulatory assets and liabilities include other amounts that we expect to recover from, or return to, customers in future periods, such as the cost of abandoned projects, costs incurred in connection with recent rate cases and other items. North Dakota Rate Case On November 2, 2023, OTP filed a request with the NDPSC for an increase in revenue recoverable under general rates in North Dakota. In its filing, OTP requested a net increase in annual revenue of $17.4 million, or 8.4%, based on an allowed rate of return on rate base of 7.85% and an allowed rate of ROE of 10.6% on an equity ratio of 53.5% of total capital. The filing also included an interim rate request of a net increase in annual revenue of $12.4 million, or 6.0%, which was approved by the NDPSC on December 13, 2023. Interim rates went into effect on January 1, 2024. On July 3, 2024, OTP filed an update to the original request increasing the amount of the net annual revenue requirement from $17.4 million to $22.5 million, or a net increase of 10.9% in annual revenue, to account for certain items identified throughout the regulatory process. On December 30, 2024, the NDPSC approved a settlement agreement between OTP and certain interested parties in the general rate case and issued its written order on final rates. The key provisions of the order include a revenue requirement of $225.6 million, based on a return on rate base of 7.53%, and an allowed ROE of 10.10% on an equity ratio of 53.5%. The net annual revenue requirement includes a net increase of $13.1 million, or 6.18%. OTP’s revenue requirement was reduced by approximately $3.0 million primarily due to the inclusion of forecasted PTCs plus adjustments for new customer load additions, which were not included in OTP’s updated request filed on July 3, 2024. Through the settlement of the case, the parties also agreed to establish an earnings sharing mechanism, whereby 70% of actual earnings in excess of a 10.20% ROE would be returned to customers, with OTP retaining the remaining 30%.

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- Definition The entire disclosure for detailed information about regulatory assets and liabilities, including current and noncurrent assets created when regulatory agencies permit the deferral of costs to the balance sheet that would otherwise be required to appear on the company's income statement and would be charged against current expenses or revenues, as well as current and noncurrent liabilities created when regulatory agencies permit. + References No definition available. + Details
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