Leases (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of lease expense and supplemental cash flow information for leases

The components of lease expense and supplemental cash flow information related to our leases for the years ended December 31 are as follows:


(in millions)	2021			2020			2019
Finance lease expense
Amortization of right of use assets (1)	$	8.1		$	6.3		$	4.9
Interest on lease liabilities (2)	1.6			2.5			3.3
Operating lease expense (3)	3.4			5.4			5.5
Short-term lease expense (3)	0.2			0.3			0.6
Total lease expense	$	13.3		$	14.5		$	14.3

Other information

Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from finance leases	$	1.6		$	2.5		$	3.3
Operating cash flows from operating leases	$	5.3		$	6.7		$	6.0
Financing cash flows from finance leases	$	8.1		$	6.3		$	4.9

Non-cash activities:
Right of use assets obtained in exchange for finance lease liabilities	$	73.6		$	22.8		$	27.2
Right of use assets obtained in exchange for operating lease liabilities	$	0.5		$	—		$	49.0

Weighted-average remaining lease term – finance leases	20.5 years			41.5 years			31.5 years
Weighted-average remaining lease term – operating leases	12.5 years			13.0 years			12.9 years

Weighted-average discount rate – finance lease (4)	2.4		%	4.9		%	6.7		%
Weighted average discount rate – operating leases (4)	3.4		%	3.4		%	4.4		%

(1) Amortization of right of use assets was included as a component of depreciation and amortization expense.

(2) Interest on lease liabilities was included as a component of interest expense.

(3) Operating and short-term lease expense were included as a component of operation and maintenance expense.

(4) Because our leases do not provide an implicit rate of return, we used the fully collateralized incremental borrowing rates based upon information available for similarly rated companies in determining the present value of lease payments.

Schedule of finance and operating lease right of use asset

The following table summarizes our finance lease right of use assets, which were included in property, plant, and equipment on our balance sheets at December 31:


(in millions)	2021		2020
Power purchase commitment
Under finance leases	$	214.4	$	140.3
Accumulated amortization	(137.7)		(132.3)
Total power purchase commitment	$	76.7	$	8.0

Two Creeks land leases
Under finance leases	$	9.6	$	7.7
Accumulated amortization	(0.4)		(0.2)
Total Two Creeks land leases	$	9.2	$	7.5

Badger Hollow I land leases
Under finance leases	$	16.6	$	19.5
Accumulated amortization	(0.9)		(0.6)
Total Badger Hollow I land leases	$	15.7	$	18.9

Badger Hollow II land leases
Under finance leases	$	22.8	$	22.8
Accumulated amortization	(0.7)		(0.2)
Total Badger Hollow II land leases	$	22.1	$	22.6

Other, net	$	0.3	$	—
Total finance lease right of use assets, net	$	124.0	$	57.0

Schedule of future minimum lease payments for operating and finance leases

Future minimum lease payments under our operating and finance leases and the present value of our net minimum lease payments as of December 31, 2021, were as follows:


(in millions)	Total Operating Leases		Power Purchase Commitment		Two Creeks		Badger Hollow I		Badger Hollow II		Other		Total Finance Leases
2022	$	4.7	$	79.0	$	0.2	$	0.5	$	0.3	$	—	$	80.0
2023	4.5		—		0.2		0.5		0.7		—		1.4
2024	4.3		—		0.2		0.5		0.7		—		1.4
2025	3.8		—		0.2		0.5		0.7		—		1.4
2026	3.9		—		0.3		0.5		0.7		—		1.5
Thereafter	20.8		—		21.7		39.3		54.3		0.6		115.9
Total minimum lease payments	42.0		79.0		22.8		41.8		57.4		0.6		201.6
Less: Interest	(9.2)		(0.6)		(13.0)		(24.2)		(33.8)		(0.3)		(71.9)
Present value of minimum lease payments	32.8		78.4		9.8		17.6		23.6		0.3		129.7
Less: Short-term lease liabilities	(3.7)		(78.4)		—		—		—		—		(78.4)
Long-term lease liabilities	$	29.1	$	—	$	9.8	$	17.6	$	23.6	$	0.3	$	51.3