LEASES

6 Months Ended

Jun. 30, 2025

In June 2025, we, along with WE, partnered with an unaffiliated utility to acquire and construct High Noon, a utility-scale solar-powered electric generating facility located in Columbia County, Wisconsin. Commercial operation of the project is targeted for 2027. Related to our investment in High Noon, we, WE, and our unaffiliated utility partner, entered into several land leases that commenced in the second quarter of 2025. Each lease has an initial construction term that ends upon achieving commercial operation, then automatically extends for 25 years with an option for an additional 25-year extension. We expect the optional extension to be exercised, and, as a result, these land leases are being amortized over the extended term of the leases. Once High Noon achieves commercial operation, the lease liability will be remeasured to reflect the final total acres being leased. We expect to recover the lease payments through rates.

Our total obligation under the land-related finance leases for High Noon was $11.1 million at June 30, 2025, and was included in finance lease obligations on our balance sheet. Our finance lease right of use asset related to High Noon was also $11.1 million as of June 30, 2025, and was included in property, plant, and equipment on our balance sheet. Our weighted-average discount rate for the High Noon finance leases was 6.45%. We used an estimate of the fully collateralized incremental borrowing rate based upon information available for similarly rated companies in determining the present value of lease payments.

Future minimum lease payments and the corresponding present value of our net minimum lease payments under the finance leases for High Noon as of June 30, 2025, were as follows:


(in millions)
Six Months Ended December 31, 2025	$	0.5
2026	0.2
2027	0.3
2028	0.6
2029	0.6
2030	0.6
Thereafter	48.5
Total minimum lease payments	51.3
Less: Interest	(40.2)
Present value of minimum lease payments	11.1
Less: Short-term lease liabilities	—
Long-term lease liabilities	$	11.1