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Regulatory Matters | 9 Months Ended
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Sep. 30, 2025
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 September 30, 2025 and December 31, 2024 and the period we expect to recover or refund such amounts:
| Period of |  | September 30, 2025 |  | December 31, 2024
(in thousands) | Recovery/Refund |  | Current |  | Long-Term |  | Current |  | Long-Term
Regulatory Assets |  |  |  |  |  |  |  |  |
Pension and Other Postretirement Benefit Plans 1 | Various |  | $ | — |  |  | $ | 87,182 |  |  | $ | — |  |  | $ | 88,161 |
Alternative Revenue Program Riders 2 | Up to 2 years |  | 4,610 |  |  | 146 |  |  | 4,257 |  |  | 195 |
Deferred Income Taxes 1 | Asset lives |  | — |  |  | 9,070 |  |  | — |  |  | 8,944 |
Fuel Clause Adjustments 1 | Up to 1 year |  | 3,229 |  |  | — |  |  | 2,218 |  |  | — |
Derivative Instruments 1 | Up to 2 years |  | 795 |  |  | 512 |  |  | 1,989 |  |  | — |
Other 1 | Various |  | 799 |  |  | 1,026 |  |  | 1,498 |  |  | 1,373 |
Total Regulatory Assets |  |  | $ | 9,433 |  |  | $ | 97,936 |  |  | $ | 9,962 |  |  | $ | 98,673 |
Regulatory Liabilities |  |  |  |  |  |  |  |  |
Deferred Income Taxes | Asset lives |  | $ | — |  |  | $ | 124,832 |  |  | $ | — |  |  | $ | 130,387 |
Plant Removal Obligations | Asset lives |  | — |  |  | 132,438 |  |  | — |  |  | 126,263 |
Fuel Clause Adjustments | Up to 1 year |  | 5,197 |  |  | — |  |  | 11,432 |  |  | — |
Alternative Revenue Program Riders | Up to 1 year |  | 10,888 |  |  | — |  |  | 14,255 |  |  | — |
North Dakota PTC Refunds | Asset lives |  | — |  |  | 26,348 |  |  | — |  |  | 20,099 |
Pension and Other Postretirement Benefit Plans | Various |  | 2,547 |  |  | 10,350 |  |  | 2,547 |  |  | 10,758 |
Other | Various |  | 3,121 |  |  | 2,248 |  |  | 1,073 |  |  | 1,421 |
Total Regulatory Liabilities |  |  | $ | 21,753 |  |  | $ | 296,216 |  |  | $ | 29,307 |  |  | $ | 288,928 |
1 Costs subject to recovery without a rate of return. |  |  |  |  |  |  |  |  |
2 Amounts eligible for recovery includes an incentive or rate of return. |  |  |  |  |  |  |  |
South Dakota Rate Case On June 4, 2025, Otter Tail Power (OTP) filed a request with the South Dakota Public Utilities Commission (SDPUC) for an increase in revenue recoverable under general rates in South Dakota. In its filing, OTP requested a net increase in annual revenue of $5.7 million, or 12.50%, based on an allowed rate of return on rate base of 8.29% and an allowed rate of return on equity (ROE) of 10.80% on an equity ratio of 53.54% of total capital. Through this proceeding, OTP has proposed changes to the mechanism of certain cost and investment recovery, with recovery moving from riders into base rates. If the SDPUC does not issue its decision on OTP's request within 180 days, OTP can increase rates on an interim basis beginning December 1, 2025. These interim rate revenues, when collected, are subject to potential refund until the finalization of the rate case. Minnesota Rate Case On October 31, 2025, OTP filed a request with the Minnesota Public Utilities Commission (MPUC) for an increase in revenue recoverable under general rates in Minnesota. In its filing, OTP requested a net increase in annual revenue of $44.8 million, or 17.7%, based on an allowed rate of return on rate base of 7.92% and an allowed ROE of 10.65% on an equity ratio of 53.5% of total capital. The request includes, among other items, accelerated recovery of the remaining investment of the jurisdictionally allocated share of Coyote Station. The accelerated recovery request is equal to $4.3 million annually. The request is driven by the MPUC’s order in OTP’s most recent Integrated Resource Plan to discontinue serving Minnesota customers with capacity and energy from Coyote Station by December 2031. If this part of the request is granted, we anticipate the amounts collected would be deferred and recognized over the remaining estimated useful life of the plant, which extends until 2041. The filing also included an interim rate request for a net increase in annual revenue of $31.8 million, or 12.6%. We anticipate interim rates will commence on January 1, 2026, and will be subject to potential refund until the finalization of the rate case.

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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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