FAIR VALUE (Tables)

9 Months Ended

Sep. 30, 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:

	September 30, 2014
(Millions)	Level 1		Level 2		Level 3		Total
Risk management assets
Natural gas contracts	$	0.8	$	0.6	$	—	$	1.4
Financial transmission rights (FTRs)	—		—		3.4		3.4
Coal contracts	—		—		2.4		2.4
Total	$	0.8	$	0.6	$	5.8	$	7.2
Risk management liabilities
Natural gas contracts	$	0.4	$	—	$	—	$	0.4
FTRs	—		—		0.4		0.4
Petroleum product contracts	0.3		—		—		0.3
Coal contracts	—		—		2.4		2.4
Total	$	0.7	$	—	$	2.8	$	3.5

	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 September 30, 2014:

	Fair Value (Millions)
	Assets		Liabilities		Valuation Technique	Unobservable Input	Average or Range
FTRs	$	3.4	$	0.4	Market-based	Forward market prices ($/megawatt-month) (1)	$187.89
Coal contracts	2.4		2.4		Market-based	Forward market prices ($/ton) (2)	$12.31 – $15.50

⁽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 September 30, 2014									Nine Months Ended September 30, 2014
(Millions)	FTRs			Coal Contracts			Total			FTRs			Coal Contracts			Total
Balance at the beginning of period	$	4.0		$	0.9		$	4.9		$	1.2		$	(2.5	)	$	(1.3	)
Net realized gains included in earnings	0.2			—			0.2			1.0			—			1.0
Net unrealized gains (losses) recorded as regulatory assets or liabilities	0.4			(1.0		)	(0.6		)	0.5			2.0			2.5
Purchases	—			—			—			4.3			—			4.3
Settlements	(1.6		)	0.1			(1.5		)	(4.0		)	0.5			(3.5		)
Balance at the end of period	$	3.0		$	—		$	3.0		$	3.0		$	—		$	3.0
	Three Months Ended September 30, 2013									Nine Months Ended September 30, 2013
(Millions)	FTRs			Coal Contracts			Total			FTRs			Coal Contracts			Total
Balance at the beginning of period	$	2.1		$	(2.3	)	$	(0.2	)	$	1.1		$	(6.5	)	$	(5.4	)
Net realized gains included in earnings	1.5			—			1.5			2.5			—			2.5
Net unrealized gains (losses) recorded as regulatory assets or liabilities	0.8			(4.5		)	(3.7		)	(0.3		)	2.2			1.9
Purchases	—			—			—			3.2			—			3.2
Sales	—			—			—			(0.1		)	—			(0.1		)
Settlements	(2.6		)	5.6			3.0			(4.6		)	3.1			(1.5		)
Balance at the end of period	$	1.8		$	(1.2	)	$	0.6		$	1.8		$	(1.2	)	$	0.6

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:

	September 30, 2014				December 31, 2013
(Millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt	$	1,174.5	$	1,250.1	$	1,174.5	$	1,176.5
Long-term debt to parent	5.7		6.0		6.3		7.1
Preferred stock	51.2		57.1		51.2		61.4