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FAIR VALUE (Tables)

12 Months Ended

Dec. 31, 2013

Fair value of assets and liabilities measured on a recurring basis, categorized by level within the fair value hierarchy

The following tables show assets and liabilities that were accounted for at fair value on a recurring basis, categorized by level within the fair value hierarchy:



	December 31, 2013
(Millions)	Level 1		Level 2		Level 3		Total
Risk management assets
Natural gas contracts	$	0.6	$	—	$	—	$	0.6
Financial transmission rights (FTRs)	—		—		1.5		1.5
Petroleum product contracts	0.1		—		—		0.1
Coal contracts	—		—		0.2		0.2
Total	$	0.7	$	—	$	1.7	$	2.4

Risk management liabilities
Natural gas contracts	$	0.1	$	—	$	—	$	0.1
FTRs	—		—		0.3		0.3
Coal contracts	—		—		2.7		2.7
Total	$	0.1	$	—	$	3.0	$	3.1



	December 31, 2012
(Millions)	Level 1		Level 2		Level 3		Total
Risk management assets
Natural gas contracts	$	0.1	$	—	$	—	$	0.1
FTRs	—		—		1.2		1.2
Petroleum product contracts	0.1		—		—		0.1
Coal contracts	—		—		2.5		2.5
Total	$	0.2	$	—	$	3.7	$	3.9

Risk management liabilities
Natural gas contracts	$	0.6	$	—	$	—	$	0.6
FTRs	—		—		0.1		0.1
Coal contracts	—		—		9.0		9.0
Total	$	0.6	$	—	$	9.1	$	9.7

Significant unobservable inputs used in the valuation of derivatives categorized in Level 3

The significant unobservable inputs used in the valuations that resulted in categorization within Level 3 were as follows at December 31, 2013. The amounts listed in the table below represent the range of unobservable inputs that individually had a significant impact on the fair value determination and caused a derivative to be classified as Level 3.



	Fair Value (Millions)
	Assets		Liabilities		Valuation Technique	Unobservable Input	Average or Range
FTRs	$	1.5	$	0.3	Market-based	Forward market prices ($/megawatt-month) ⁽¹⁾	$121.68
Coal contract	0.2		2.7		Market-based	Forward market prices ($/ton) ⁽²⁾	$11.73 — $14.30


⁽¹⁾	Represents forward market prices developed using historical cleared pricing data from MISO.


⁽²⁾	Represents third-party forward market pricing.

Reconciliation of changes in level 3 fair value measurements

The following tables set forth a reconciliation of changes in the fair value of items categorized as Level 3 measurements:



	2013
(Millions)	FTRs			Coal Contracts			Total
Balance at the beginning of period	$	1.1		$	(6.5	)	$	(5.4	)
Net realized gains included in earnings	3.0			—			3.0
Net unrealized (losses) gains recorded as regulatory assets or liabilities	(0.1		)	0.4			0.3
Purchases	3.2			—			3.2
Sales	(0.2		)	—			(0.2		)
Settlements	(5.8		)	3.6			(2.2		)
Balance at the end of period	$	1.2		$	(2.5	)	$	(1.3	)



	2012
(Millions)	FTRs			Coal Contracts			Total
Balance at the beginning of period	$	1.2		$	(6.9	)	$	(5.7	)
Net realized gains included in earnings	1.8			—			1.8
Net unrealized (losses) gains recorded as regulatory assets or liabilities	(0.1		)	5.8			5.7
Purchases	2.8			—			2.8
Sales	(0.1		)	—			(0.1		)
Settlements	(4.5		)	(5.4		)	(9.9		)
Balance at the end of period	$	1.1		$	(6.5	)	$	(5.4	)



	2011
(Millions)	FTRs			Coal Contracts			Total
Balance at the beginning of period	$	2.0		$	2.5		$	4.5
Net realized losses included in earnings	(1.2		)	—			(1.2		)
Net unrealized losses recorded as regulatory assets or liabilities	(1.2		)	(8.0		)	(9.2		)
Purchases	2.8			—			2.8
Sales	(0.1		)	—			(0.1		)
Settlements	(1.1		)	(1.4		)	(2.5		)
Balance at the end of period	$	1.2		$	(6.9	)	$	(5.7	)

Schedule of carrying value and estimated fair value of financial instruments

The following table shows the financial instruments included on our balance sheets that are not recorded at fair value:



	December 31, 2013				December 31, 2012
(Millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt	$	1,174.5	$	1,176.5	$	871.4	$	966.2
Long-term debt to parent	6.3		7.1		7.2		8.2
Preferred stock	51.2		61.4		51.2		52.8

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 15

-Subparagraph b-d

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

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-Subparagraph c(2), d, e, f

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

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-Subparagraph a, c(1), c(2), c(3), d

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef

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-Name Accounting Standards Codification

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Reference 6: http://www.xbrl.org/2003/role/presentationRef

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Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 10

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

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Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 14

-Subparagraph a

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

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Reference 12: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 19

-Subparagraph a, b, c(1), d(1)

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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