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FAIR VALUE (Tables)
 12 Months Ended
Dec. 31, 2013
Fair Value Disclosures [Abstract]  
Fair value of assets and liabilities measured on a recurring basis, categorized by level within the fair value hierarchy
The following tables show assets and liabilities that were accounted for at fair value on a recurring basis, categorized by level within the fair value hierarchy:
 
 
December 31, 2013
(Millions)
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
 
Risk Management Assets
 
 

 
 

 
 

 
 

Utility Segments
 
 

 
 

 
 

 
 

Natural gas contracts
 
$
2.4

 
$
7.7

 
$
—

 
$
10.1

Financial transmission rights (FTRs)
 
—

 
—

 
2.1

 
2.1

Petroleum product contracts
 
0.1

 
—

 
—

 
0.1

Coal contracts
 
—

 
—

 
0.2

 
0.2

Nonregulated Segments
 
 

 
 

 
 

 
 

Natural gas contracts
 
16.3

 
35.2

 
35.6

 
87.1

Electric contracts
 
65.1

 
134.9

 
15.9

 
215.9

Total Risk Management Assets
 
$
83.9

 
$
177.8

 
$
53.8

 
$
315.5

 
 
 
 
 
 
 
 
 
Investment in exchange-traded funds
 
$
15.9

 
$
—

 
$
—

 
$
15.9

 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
Risk Management Liabilities
 
 

 
 

 
 

 
 

Utility Segments
 
 

 
 

 
 

 
 

Natural gas contracts
 
$
0.5

 
$
0.6

 
$
—

 
$
1.1

FTRs
 
—

 
—

 
0.3

 
0.3

Coal contracts
 
—

 
—

 
2.7

 
2.7

Nonregulated Segments
 
 

 
 

 
 
 
 

Natural gas contracts
 
14.3

 
22.0

 
25.2

 
61.5

Electric contracts
 
98.8

 
58.7

 
3.5

 
161.0

Total Risk Management Liabilities
 
$
113.6

 
$
81.3

 
$
31.7

 
$
226.6

 
 
 
 
 
 
 
 
 
Contingent consideration related to the acquisition of Compass Energy Services (Compass) *
 
$
—

 
$
—

 
$
7.8

 
$
7.8


*
See Note 3, Acquisitions, for more information.

 
 
December 31, 2012
(Millions)
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
 
Risk Management Assets
 
 
 
 
 
 
 
 
Utility Segments
 
 
 
 
 
 
 
 
Natural gas contracts
 
$
0.3

 
$
3.1

 
$
—

 
$
3.4

FTRs
 
—

 
—

 
2.1

 
2.1

Petroleum product contracts
 
0.2

 
—

 
—

 
0.2

Coal contracts
 
—

 
—

 
2.5

 
2.5

Nonregulated Segments
 
 
 
 
 
 
 
 
Natural gas contracts
 
21.4

 
36.4

 
5.4

 
63.2

Electric contracts
 
48.4

 
61.3

 
9.6

 
119.3

Total Risk Management Assets
 
$
70.3

 
$
100.8

 
$
19.6

 
$
190.7

 
 
 
 
 
 
 
 
 
Investment in exchange-traded funds
 
$
11.8

 
$
—

 
$
—

 
$
11.8

 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
Risk Management Liabilities
 
 
 
 
 
 
 
 
Utility Segments
 
 
 
 
 
 
 
 
Natural gas contracts
 
$
1.1

 
$
14.1

 
$
—

 
$
15.2

FTRs
 
—

 
—

 
0.1

 
0.1

Coal contracts
 
—

 
—

 
9.0

 
9.0

Nonregulated Segments
 
 
 
 
 
 
 
 
Natural gas contracts
 
17.7

 
36.9

 
1.5

 
56.1

Electric contracts
 
54.9

 
91.1

 
13.9

 
159.9

Total Risk Management Liabilities
 
$
73.7

 
$
142.1

 
$
24.5

 
$
240.3
Schedule of transfers between the levels of the fair value hierarchy
The following tables show net risk management assets (liabilities) transferred between the levels of the fair value hierarchy:
 
 
Nonregulated Segments — Natural Gas Contracts
 
 
Year Ended December 31, 2013

Year Ended December 31, 2012
(Millions)
 
Level 1
 
Level 2
 
Level 3
 
Level 1
 
Level 2
 
Level 3
Transfers into Level 1 from
 
N/A

 
$
—

 
$
—

 
N/A

 
$
—

 
$
—

Transfers into Level 2 from
 
$
—

 
N/A

 
—

 
$
—

 
N/A

 
2.0

Transfers into Level 3 from
 
—

 
7.1

 
N/A

 
—

 
3.7

 
N/A


 
 
Nonregulated Segments — Electric Contracts
 
 
Year Ended December 31, 2013
 
Year Ended December 31, 2012
(Millions)
 
Level 1
 
Level 2
 
Level 3
 
Level 1
 
Level 2
 
Level 3
Transfers into Level 1 from
 
N/A

 
$
—

 
(0.3
)
 
N/A

 
$
—

 
$
—

Transfers into Level 2 from
 
$
—

 
N/A

 
7.3

 
$
—

 
N/A

 
(13.0
)
Transfers into Level 3 from
 
(0.2
)
 
8.7

 
N/A

 
—

 
(7.9
)
 
N/A
Significant unobservable inputs used in the valuation of derivatives categorized in Level 3
The significant unobservable inputs used in the valuations that resulted in categorization within Level 3 were as follows at December 31, 2013. The amounts and percentages listed in the table below represent the range of unobservable inputs that individually had a significant impact on the fair value determination and caused a transaction to be classified as Level 3.
 
 
Fair Value (Millions)
 
 
 
 
 
 
 
 
Assets
 
Liabilities
 
Valuation Technique
 
Unobservable Input
 
Average or Range
Utility Segments
 
 

 
 

 
 
 
 
 
 

FTRs
 
$
2.1

 
$
0.3

 
Market-based
 
Forward market prices ($/megawatt-month) (1)
 
$174.52
Coal contracts
 
0.2

 
2.7

 
Market-based
 
Forward market prices ($/ton) (2)
 
$11.73 — $14.30

Nonregulated Segments
 
 

 
 

 
 
 
 
 
 

Natural gas contracts
 
35.6

 
25.2

 
Market-based
 
Forward market prices ($/dekatherm) (3)
 
($1.53) — $17.30

 
 
 

 
 

 
 
 
Probability of default(4)
 
11.6% — 51.0 %

Electric contracts
 
15.9

 
3.5

 
Market-based
 
Forward market prices ($/megawatt-hours) (3)
 
($3.30) — $9.25

 
 
 
 
 
 
 
 
Probability of default(4)
 
26.0
 %
 
 
 

 
 

 
 
 
Option volatilities(5)
 
14.8% — 199.9 %

 
 
 
 
 
 
 
 
Monthly curve shaping(6)
 
(33.3
)%
Contingent consideration related to the acquisition of Compass
 
N/A

 
7.8

 
Income-based
 
Growth rate(7)
 
(13.2)% — 49.3 %


(1) 
Represents forward market prices developed using historical cleared pricing data from MISO.

(2) 
Represents third-party forward market pricing.

(3) 
Represents unobservable basis spreads developed using historical settled prices that are applied to observable market prices at various natural gas and electric locations, as well as unobservable adjustments made to extend observable market prices beyond the quoted period through the end of the transaction term.

(4) 
Based on Moody's one-year counterparty default percentages.

(5) 
Represents the range of volatilities used in the valuation of options. Volatilities are derived from an internal model using volatility curves from third parties.

(6) 
Represents adjustments made to forward market price curves to disaggregate average prices of multiple periods into discrete monthly prices.

(7) 
Represents the range of assumed growth rates of earnings before interest, taxes, and amortization.
Reconciliation of changes in level 3 fair value measurements
The following tables set forth a reconciliation of changes in the fair value of items categorized as Level 3 measurements:
2013
 
Nonregulated Segments
 
Utility Segments
 
 
(Millions)
 
Natural Gas
 
Electric
 
Contingent Consideration*
 
FTRs
 
Coal Contracts
 
Total
Balance at the beginning of the period
 
$
3.9

 
$
(4.3
)
 
$
—

 
$
2.0

 
$
(6.5
)
 
$
(4.9
)
Net realized and unrealized gains (losses) included in earnings
 
(1.8
)
 
14.0

 
(0.1
)
 
2.0

 
—

 
14.1

Net unrealized gains (losses) recorded as regulatory assets or liabilities
 
—

 
—

 
—

 
(0.3
)
 
0.4

 
0.1

Purchases
 
7.4

 
6.0

 
(7.7
)
 
4.9

 
—

 
10.6

Sales
 
—

 
(1.1
)
 
—

 
(0.2
)
 
—

 
(1.3
)
Settlements
 
(6.2
)
 
(3.7
)
 
—

 
(6.6
)
 
3.6

 
(12.9
)
Net transfers into Level 3
 
7.1

 
8.5

 
—

 
—

 
—

 
15.6

Net transfers out of Level 3
 
—

 
(7.0
)
 
—

 
—

 
—

 
(7.0
)
Balance at the end of the period
 
$
10.4

 
$
12.4

 
$
(7.8
)
 
$
1.8

 
$
(2.5
)
 
$
14.3

 
 
 
 
 
 
 
 
 
 
 
 
 
Net unrealized gains (losses) included in earnings related to instruments still held at the end of the period
 
$
(1.8
)
 
$
14.0

 
$
—

 
$
—

 
$
—

 
$
12.2


*
Represents the contingent consideration related to the acquisition of Compass. See Note 3, Acquisitions, for more information.

2012
 
Nonregulated Segments
 
Utility Segments
 
 
 
(Millions)
 
Natural Gas
 
Electric
 
FTRs
 
Coal Contracts
 
Total
 
Balance at the beginning of the period
 
$
8.3

 
$
(11.5
)
 
$
2.2

 
$
(6.9
)
 
$
(7.9
)
 
Net realized and unrealized gains (losses) included in earnings
 
3.8

 
(14.5
)
*
1.8

 
—

 
(8.9
)
*
Net unrealized gains recorded as regulatory assets or liabilities
 
—

 
—

 
0.2

 
5.8

 
6.0

 
Purchases
 
—

 
7.8

 
4.9

 
—

 
12.7

 
Sales
 
—

 
—

 
(0.1
)
 
—

 
(0.1
)
 
Settlements
 
(9.9
)
 
8.8

 
(7.0
)
 
(5.4
)
 
(13.5
)
 
Net transfers into Level 3
 
3.7

 
(7.9
)
 
—

 
—

 
(4.2
)
 
Net transfers out of Level 3
 
(2.0
)
 
13.0

 
—

 
—

 
11.0

 
Balance at the end of the period
 
$
3.9

 
$
(4.3
)
 
$
2.0

 
$
(6.5
)
 
$
(4.9
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Net unrealized gains (losses) included in earnings related to instruments still held at the end of the period
 
$
3.8

 
$
(14.5
)
*
$
—

 
$
—

 
$
(10.7
)
*

*
Includes a $1.2 million net unrealized loss reported as discontinued operations. See Note 4, Discontinued Operations, for more information.
2011
 
Nonregulated Segments
 
Utility Segments
 
 
 
(Millions)
 
Natural Gas
 
Electric
 
FTRs
 
Coal Contracts
 
Total
 
Balance at the beginning of the period
 
$
30.2

 
$
(14.9
)
 
$
2.9

 
$
2.5

 
$
20.7

 
Net realized and unrealized gains (losses) included in earnings
 
32.3

 
(20.7
)
*
(1.7
)
 
—

 
9.9

*
Net unrealized losses recorded as regulatory assets or liabilities
 
—

 
—

 
(1.7
)
 
(8.0
)
 
(9.7
)
 
Net unrealized gains included in other comprehensive loss
 
—

 
0.6

 
—

 
—

 
0.6

 
Purchases
 
—

 
2.2

 
5.9

 
—

 
8.1

 
Sales
 
—

 
—

 
(0.1
)
 
—

 
(0.1
)
 
Settlements
 
(30.4
)
 
7.0

 
(3.1
)
 
(1.4
)
 
(27.9
)
 
Net transfers into Level 3
 
0.6

 
(5.9
)
 
—

 
—

 
(5.3
)
 
Net transfers out of Level 3
 
(24.4
)
 
20.2

 
—

 
—

 
(4.2
)
 
Balance at the end of the period
 
$
8.3

 
$
(11.5
)
 
$
2.2

 
$
(6.9
)
 
$
(7.9
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Net unrealized gains (losses) included in earnings related to instruments still held at the end of the period
 
$
32.3

 
$
(20.7
)
*
$
—

 
$
—

 
$
11.6

*

*
Includes a $0.5 million net unrealized gain reported as discontinued operations. See Note 4, Discontinued Operations, for more information.
Schedule of carrying value and estimated fair value of financial instruments
The following table shows the financial instruments included on our balance sheets that are not recorded at fair value:
 
 
December 31, 2013
 
December 31, 2012
(Millions)
 
Carrying Amount
 
Fair Value
 
Carrying Amount
 
Fair Value
Long-term debt
 
$
3,056.2

 
$
3,031.6

 
$
2,245.2

 
$
2,425.8

Preferred stock of subsidiary
 
51.1

 
61.2

 
51.1

 
52.7