Property, Plant and Equipment

12 Months Ended

Dec. 31, 2014

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Text Block]

PROPERTY, PLANT AND EQUIPMENT

Property, Plant and Equipment
As of December 31	2014			2013
Millions
Regulated Utility		$3,903.3			$3,380.0
Construction Work in Progress	355.4			303.9
Accumulated Depreciation	(1,260.2		)	(1,181.7		)
Regulated Utility Plant - Net	2,998.5			2,502.2
Investments and Other Operations (a)	357.8			131.3
Construction Work in Progress	5.9			3.4
Accumulated Depreciation	(75.8		)	(60.4		)
Investments and Other Operations Plant - Net	287.9			74.3
Property, Plant and Equipment - Net		$3,286.4			$2,576.5

(a) Includes primarily ALLETE Clean Energy, BNI Coal and a small amount of non-rate base generation.

Depreciation is computed using the straight-line method over the estimated useful lives of the various classes of assets.

Estimated Useful Lives of Property, Plant and Equipment
Generation	5 to 50 years	Distribution	18 to 65 years
Transmission	44 to 67 years	Investments and Other Operations	5 to 44 years

Asset Retirement Obligations. We recognize, at fair value, obligations associated with the retirement of certain tangible, long-lived assets that result from the acquisition, construction, development or normal operation of the asset. Asset retirement obligations (ARO) relate primarily to the decommissioning of our coal-fired and wind generating facilities and land reclamation at BNI Coal, and are included in Other Non-Current Liabilities on our Consolidated Balance Sheet. The associated retirement costs are capitalized as part of the related long-lived asset and depreciated over the useful life of the asset. Removal costs associated with certain distribution and transmission assets have not been recognized, as these facilities have indeterminate useful lives.

Conditional asset retirement obligations have been identified for treated wood poles and remaining polychlorinated biphenyl and asbestos-containing assets; however, removal costs have not been recognized because they are considered immaterial to our consolidated financial statements.

Long-standing ratemaking practices approved by applicable state and federal regulatory commissions have allowed provisions for future plant removal costs in depreciation rates. These plant removal cost recoveries are classified either as AROs or as a regulatory liability for non-ARO obligations. To the extent annual accruals for plant removal costs differ from accruals under approved depreciation rates, a regulatory asset has been established in accordance with the guidance for AROs. (See Note 5. Regulatory Matters.)

Asset Retirement Obligation
Millions
Obligation as of December 31, 2012		$77.9
Accretion	4.6
Revisions in estimated cash flows	(0.7		)
Obligation as of December 31, 2013	81.8
Accretion	5.5
Liabilities recognized (a)	23.0
Liabilities settled	(0.5		)
Revisions in estimated cash flows	(0.6		)
Obligation as of December 31, 2014		$109.2

(a) The increase in 2014 is primarily related to BNI Coal for coal mining expansion and ALLETE Clean Energy due to wind energy facilities acquisitions.