REGULATORY ASSETS AND LIABILITIES

12 Months Ended

Dec. 31, 2019

Regulatory Assets and Liabilities Disclosure [Abstract]

The following regulatory assets were reflected on our balance sheets as of December 31:



(in millions)	2019		2018		See Note
Regulatory assets ^{(1) (2)}
Pension and OPEB costs ⁽³⁾	$	151.8	$	189.8	18
Environmental remediation costs ⁽⁴⁾	113.5		108.3		20
Plant retirements ⁽⁵⁾	55.3		78.1		6
Income tax related items ⁽⁶⁾	38.9		38.1		15
ReACT™	20.8		15.3		22
Forward Wind Energy Center ⁽⁷⁾	17.9		8.7
Termination of a tolling agreement with Fox Energy Company LLC ⁽⁸⁾	9.9		21.7
AROs	8.4		11.5		8
Other, net	21.4		14.4
Total regulatory assets	$	437.9	$	485.9

Balance sheet presentation
Other current assets	$	—	$	0.3
Regulatory assets	437.9		485.6
Total regulatory assets	$	437.9	$	485.9


⁽¹⁾	Based on prior and current rate treatment, we believe it is probable that we will continue to recover from customers the regulatory assets in this table. In accordance with GAAP, our regulatory assets do not include the allowance for ROE that is capitalized for regulatory purposes. This allowance was $20.8 million and $14.7 million at December 31, 2019 and 2018, respectively.

⁽²⁾

As of December 31, 2019, we had $46.2 million of regulatory assets not earning a return. The regulatory assets not earning a return primarily relate to certain environmental remediation costs, the recovery of which depends on the timing of the actual expenditures, as well as our electric real-time market pricing program. The other regulatory assets in the table either earn a return at our weighted average cost of capital or the cash has not yet been expended, in which case the regulatory assets are offset by liabilities.


⁽³⁾	Primarily represents the unrecognized future pension and OPEB costs related to our defined benefit pension and OPEB plans. We are authorized recovery of these regulatory assets over the average remaining service life of each plan.


⁽⁴⁾	As of December 31, 2019, we had made cash expenditures of $29.7 million related to these environmental remediation costs. The remaining $83.8 million represents our estimated future cash expenditures.


⁽⁵⁾	In accordance with our rate order issued by the PSCW in December 2019, amounts previously collected from customers for the future removal of our recently retired plants were used to reduce our unrecovered plant balances during December 2019. Any additional removal costs that we incur will increase our plant retirement regulatory assets.


⁽⁶⁾	For information on the regulatory treatment of the impacts of the Tax Legislation, see Note 22, Regulatory Environment.

⁽⁷⁾

In April 2018, we, along with two unaffiliated utilities, purchased the Forward Wind Energy Center. Based on an order from the PSCW, we were allowed to defer as a regulatory asset the incremental non-fuel costs associated with the purchase, ownership, and operation of the Forward Wind Energy Center. In the rate order we received from the PSCW in December 2019, we were authorized recovery of this regulatory asset over a period of two years that began on January 1, 2020. See Note 2, Acquisitions, for more information on the acquisition of the Forward Wind Energy Center.

⁽⁸⁾

Represents an early termination fee of a tolling agreement we had with the Fox Energy Center. Prior to the purchase of the Fox Energy Center in 2013, we supplied natural gas for the facility and purchased capacity and the associated energy output under the tolling agreement. In the rate order we received from the PSCW in December 2019, we were authorized to recover the remaining balance of this regulatory asset over the next two years.

The following regulatory liabilities were reflected on our balance sheets as of December 31:



(in millions)	2019		2018		See Note
Regulatory liabilities
Income tax related items ⁽¹⁾	$	416.7	$	418.8	15
Removal costs ⁽²⁾	201.8		241.8
Pension and OPEB benefits ⁽³⁾	100.5		72.6		18
Earnings sharing mechanism	42.0		21.2		22
Energy costs refundable through rate adjustments ⁽⁴⁾	20.0		14.3		1(d)
Electric transmission costs ⁽⁵⁾	3.7		9.7
Other, net	11.5		14.5
Total regulatory liabilities	$	796.2	$	792.9

Balance sheet presentation
Other current liabilities	$	13.7	$	7.2
Regulatory liabilities	782.5		785.7
Total regulatory liabilities	$	796.2	$	792.9


⁽¹⁾	For information on the regulatory treatment of the impacts of the Tax Legislation, see Note 22, Regulatory Environment.


⁽²⁾	Represents amounts collected from customers to cover the future cost of property, plant, and equipment removals that are not legally required. Legal obligations related to the removal of property, plant, and equipment are recorded as AROs. See Note 8, Asset Retirement Obligations, for more information on our legal obligations.


⁽³⁾	Primarily represents the unrecognized future pension and OPEB benefits related to our defined benefit pension and OPEB plans. We will amortize these regulatory liabilities into net periodic benefit cost over the average remaining service life of each plan.


⁽⁴⁾	Represents an over-collection of energy costs that will be refunded to customers in the future. When the rates we charge to customers include energy costs that are higher than our actual energy costs, any over-collection outside of the allowable energy cost price variance is refunded to customers.

⁽⁵⁾

We defer as a regulatory asset or liability the difference between actual transmission costs and the costs included in rates until we are authorized to recover or refund the difference in a future rate proceeding.