RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2014

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

Related Party Transactions

We and our subsidiary, WPS Leasing, routinely enter into transactions with related parties, including Integrys Energy Group, its subsidiaries, and other entities in which we have material interests.

Effective January 1, 2014, after approval by the PSCW and other state commissions, a new affiliated interest agreement (Non-IBS AIA) went into effect and replaced certain prior agreements. It governs the provision and receipt of services by Integrys Energy Group subsidiaries, except that IBS will continue to provide services only under the existing IBS affiliated interest agreement (IBS AIA). Services under the Non-IBS AIA are subject to various pricing methodologies. All services provided by any regulated subsidiary to another regulated subsidiary are priced at cost. All services provided by any regulated subsidiary to any nonregulated subsidiary are priced at the greater of cost or fair market value. All services provided by any nonregulated subsidiary to any regulated subsidiary are priced at the lesser of cost or fair market value. All services provided by any regulated or nonregulated subsidiary to IBS are priced at cost.

We provide services to ATC for its transmission facilities under several agreements approved by the PSCW. Services are billed to ATC under this agreement at our fully allocated cost.

We provide services to WRPC under an operating agreement approved by the PSCW. We are also under a service agreement with WRPC under which either party may be a service provider. Services are billed to WRPC under these agreements at our fully allocated cost.

The table below includes information summarizing transactions entered into with related parties as of:

(Millions)	March 31, 2014		December 31, 2013
Notes payable *
Integrys Energy Group	$	6.1	$	6.3
Accounts Payable
ATC	12.6		10.4
Liability related to income tax allocation
Integrys Energy Group	6.5		6.7

* WPS Leasing, our consolidated subsidiary, has a note payable to our parent company, Integrys Energy Group. At March 31, 2014, the current portion of the note payable was $2.3 million.

The following table shows activity associated with related party transactions:

	Three Months Ended March 31
(Millions)	2014		2013
Electric transactions
Sales to UPPCO	$	5.4	$	5.3
Natural gas transactions
Sales to IES	0.1		0.1
Purchases from IES	2.3		0.2
Interest expense (1)
Integrys Energy Group	0.1		0.2
Transactions with equity method investees
Charges from ATC for network transmission services	24.7		24.6
Charges to ATC for services and construction	2.4		1.8
Purchases of energy from WRPC	1.0		1.0
Charges to WRPC for operations	0.4		0.2
Equity earnings from WPS Investments, LLC (2)	2.5		2.5

⁽¹⁾  WPS Leasing, our consolidated subsidiary, has a note payable to our parent company, Integrys Energy Group.

⁽²⁾  WPS Investments, LLC is a consolidated subsidiary of Integrys Energy Group that is jointly owned by Integrys Energy Group, UPPCO, and us. At March 31, 2014, we had an 11.24% interest in WPS Investments accounted for under the equity method. Our ownership percentage has continued to decrease as additional equity contributions are made by Integrys Energy Group to WPS Investments.