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FAIR VALUE (Tables)
 3 Months Ended
Mar. 31, 2014
Fair Value Disclosures [Abstract]  
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:
 
 
March 31, 2014
(Millions)
 
Level 1
 
Level 2
 
Level 3
 
Total
Risk management assets
 
 

 
 

 
 

 
 

Natural gas contracts
 
$
0.6

 
$
—

 
$
—

 
$
0.6

Financial transmission rights (FTRs)
 
—

 
—

 
0.7

 
0.7

Petroleum products contracts
 
0.1

 
—

 
—

 
0.1

Coal contracts
 
—

 
—

 
1.8

 
1.8

Total
 
$
0.7

 
$
—

 
$
2.5

 
$
3.2

 
 
 
 
 
 
 
 
 
Risk management liabilities
 
 

 
 

 
 

 
 

Natural gas contracts
 
$
0.1

 
$
—

 
$
—

 
$
0.1

FTRs
 
—

 
—

 
0.2

 
0.2

Coal contracts
 
—

 
—

 
1.5

 
1.5

Total
 
$
0.1

 
$
—

 
$
1.7

 
$
1.8


 
 
December 31, 2013
(Millions)
 
  Level 1
 
Level 2
 
    Level 3
 
Total
Risk management assets
 
 
 
 
 
 
 
 
Natural gas contracts
 
$
0.6

 
$
—

 
$
—

 
$
0.6

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
Significant internally-developed unobservable inputs used in the valuation of derivatives categorized in Level 3
The amounts listed in the table below represent the range of unobservable inputs used in the valuations that individually had a significant impact on the fair value determination and caused a derivative to be classified as Level 3 at March 31, 2014:
 
 
Fair Value (Millions)
 
 
 
 
 
 
 
 
Assets
 
Liabilities
 
Valuation Technique
 
Unobservable Input
 
Average or Range
FTRs
 
$
0.7

 
$
0.2

 
Market-based
 
Forward market prices ($/megawatt-month) (1)
 
$131.16
Coal contract
 
1.8

 
1.5

 
Market-based
 
Forward market prices ($/ton) (2)
 
$12.11 — $15.25

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

(2) 
Represents third-party forward market pricing.
Reconciliation of changes in the fair value of items categorized as Level 3 measurements
The following tables set forth a reconciliation of changes in the fair value of items categorized as Level 3 measurements:
 
 
Three Months Ended March 31, 2014
(Millions)
 
FTRs
 
Coal Contracts
 
Total
Balance at the beginning of period
 
$
1.2

 
$
(2.5
)
 
$
(1.3
)
Net realized gains included in earnings
 
0.7

 
—

 
0.7

Net unrealized gains recorded as regulatory assets or liabilities
 
—

 
2.2

 
2.2

Purchases
 
(0.1
)
 
—

 
(0.1
)
Settlements
 
(1.3
)
 
0.6

 
(0.7
)
Balance at the end of period
 
$
0.5

 
$
0.3

 
$
0.8


 
 
Three Months Ended March 31, 2013
(Millions)
 
FTRs
 
Coal Contracts
 
Total
Balance at the beginning of period
 
$
1.1

 
$
(6.5
)
 
$
(5.4
)
Net realized gains included in earnings
 
0.6

 
—

 
0.6

Net unrealized (losses) gains recorded as regulatory assets or liabilities
 
(0.2
)
 
3.1

 
2.9

Settlements
 
(0.9
)
 
(1.2
)
 
(2.1
)
Balance at the end of period
 
$
0.6

 
$
(4.6
)
 
$
(4.0
)
Schedule of carrying value and estimated fair value of financial instruments not recorded at fair value
The following table shows the financial instruments included on our balance sheets that are not recorded at fair value:
 
 
March 31, 2014
 
December 31, 2013
(Millions)
 
Carrying Amount
 
Fair Value
 
Carrying Amount
 
Fair Value
Long-term debt
 
$
1,174.5

 
$
1,199.6

 
$
1,174.5

 
$
1,176.5

Long-term debt to parent
 
6.1

 
6.7

 
6.3

 
7.1

Preferred stock
 
51.2

 
57.4

 
51.2

 
61.4