Equity Investments

9 Months Ended

Sep. 30, 2020

Equity Method Investments and Joint Ventures [Abstract]

EQUITY INVESTMENTS

Investment in ATC. Our wholly-owned subsidiary, ALLETE Transmission Holdings, owns approximately 8 percent of ATC, a Wisconsin-based utility that owns and maintains electric transmission assets in portions of Wisconsin, Michigan, Minnesota and Illinois. We account for our investment in ATC under the equity method of accounting. For the nine months ended September 30, 2020, we invested $2.0 million in ATC, and on October 30, 2020, we invested an additional $0.8 million. We do not expect to make any additional investments in 2020.


ALLETE’s Investment in ATC
Millions
Equity Investment Balance as of December 31, 2019			$141.6
Cash Investments			2.0
Equity in ATC Earnings (a)			16.7
Distributed ATC Earnings			(14.4)
Amortization of the Remeasurement of Deferred Income Taxes			0.9
Equity Investment Balance as of September 30, 2020			$146.8

(a)Equity in ATC Earnings includes $1.2 million of additional earnings resulting from the FERC’s May 21, 2020, order increasing ATC’s authorized return on equity to 10.52 percent including an incentive adder for participation in a regional transmission organization.

ATC’s authorized return on equity is 10.02 percent, or 10.52 percent including an incentive adder for participation in a regional transmission organization, based on a May 21, 2020, FERC order that granted rehearing of a November 2019 FERC order. (See Note 2. Regulatory Matters.)

Investment in Nobles 2. Our wholly-owned subsidiary, ALLETE South Wind, owns 49 percent of Nobles 2, the entity that will own and operate a 250 MW wind energy facility in southwestern Minnesota pursuant to a 20-year PPA with Minnesota Power. We account for our investment in Nobles 2 under the equity method of accounting. As of September 30, 2020, our equity investment in Nobles 2 was $145.0 million ($56.0 million at December 31, 2019). For the nine months ended September 30, 2020, we invested $89.0 million in Nobles 2, and in October 2020 we invested an additional $0.7 million. We expect to make approximately $25 million in additional investments in 2020.