Regulatory Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2021

Regulatory Assets and Liabilities Disclosure [Abstract]

Schedule of regulatory assets

The following regulatory assets were reflected on our balance sheets as of December 31:

(in millions)	2021		2020		See Note
Regulatory assets (1) (2)
Pension and OPEB costs (3)	$	802.3	$	1,101.6	20
Plant retirement related items	722.3		740.8
Environmental remediation costs (4)	630.9		638.2		24
Income tax related items	458.8		454.6		16
AROs	194.2		181.3		9
SSR (5)	129.5		135.6		26
Securitization	100.7		105.2		23
Energy costs recoverable through rate adjustments (6)	85.4		1.1		1(d)
MERC extraordinary natural gas costs (7)	59.7		—		26
Uncollectible expense	42.6		82.0		5
Derivatives	33.1		26.5		1(s)
Energy efficiency programs (8)	22.0		7.3
Other, net	85.6		69.9
Total regulatory assets	$	3,367.1	$	3,544.1
Balance sheet presentation
Other current assets (6)	$	102.3	$	20.0
Regulatory assets	3,264.8		3,524.1
Total regulatory assets	$	3,367.1	$	3,544.1

(1)    Based on prior and current rate treatment, we believe it is probable that our utilities will continue to recover from customers the regulatory assets in this table. In accordance with GAAP, our regulatory assets do not include the allowance for ROE that is capitalized for regulatory purposes. This allowance was $30.9 million and $34.2 million at December 31, 2021 and 2020, respectively.

(2)    As of December 31, 2021, we had $337.7 million of regulatory assets not earning a return, $14.3 million of regulatory assets earning a return based on short-term interest rates, and $129.5 million of regulatory assets earning a return based on long-term interest rates. The regulatory assets not earning a return primarily relate to certain environmental remediation costs, energy costs recoverable through rate adjustments, MERC's extraordinary natural gas costs, uncollectible expense, our invested capital tax rider, COVID-19 deferred costs, and unamortized loss on reacquired debt. The other regulatory assets in the table either earn a return at the applicable utility's weighted average cost of capital or the cash has not yet been expended, in which case the regulatory assets are offset by liabilities.

(3)    Primarily represents the unrecognized future pension and OPEB costs related to our defined benefit pension and OPEB plans. We are authorized recovery of these regulatory assets over the average remaining service life of each plan.

(4)    As of December 31, 2021, we had made cash expenditures of $98.3 million related to these environmental remediation costs. The remaining $532.6 million represents our estimated future cash expenditures.

(5)    The rate order WE received from the PSCW in December 2019 authorized recovery of the SSR regulatory asset over a 15-year period that began on January 1, 2020.

(6)    The increase in these regulatory assets primarily relates to the high natural gas costs that were incurred as a result of the extreme winter weather conditions in February 2021. See Note 26, Regulatory Environment, for more information on our recovery efforts associated with these costs.

(7)    Represents the extraordinary natural gas costs MERC incurred during February 2021 that are being recovered over 27 months, beginning in September 2021. See Note 26, Regulatory Environment, for more information on our recovery efforts associated with these costs.

(8)    Represents amounts recoverable from customers related to programs at the utilities designed to meet energy efficiency standards.

Schedule of regulatory liabilities

The following regulatory liabilities were reflected on our balance sheets as of December 31:

(in millions)	2021		2020		See Note
Regulatory liabilities
Income tax related items	$	1,998.5	$	2,137.7	16
Removal costs (1)	1,248.0		1,221.1
Pension and OPEB benefits (2)	397.3		378.1		20
Derivatives	124.1		16.4		1(s)
Electric transmission costs (3)	84.2		78.5
Uncollectible expense	37.1		25.5		5
Earnings sharing mechanisms	28.4		36.9		26
Energy costs refundable through rate adjustments	13.7		59.9		1(d)
Other, net	29.0		25.0
Total regulatory liabilities	$	3,960.3	$	3,979.1
Balance sheet presentation
Other current liabilities	$	14.3	$	51.0
Regulatory liabilities	3,946.0		3,928.1
Total regulatory liabilities	$	3,960.3	$	3,979.1

(1)    Represents amounts collected from customers to cover the future cost of property, plant, and equipment removals that are not legally required. Legal obligations related to the removal of property, plant, and equipment are recorded as AROs. See Note 9, Asset Retirement Obligations, for more information on our legal obligations.

(2)    Primarily represents the unrecognized future pension and OPEB benefits related to our defined benefit pension and OPEB plans. We will amortize these regulatory liabilities into net periodic benefit cost over the average remaining service life of each plan.

(3)    In accordance with the PSCW's approval of escrow accounting for ATC and MISO network transmission expenses for our Wisconsin electric utilities, WE and WPS defer as a regulatory asset or liability the difference between actual transmission costs and those included in rates until recovery or refund is authorized in a future rate proceeding.