Attached files

file filename
EX-31.1 - EX-31.1 - TAMPA ELECTRIC COck0000096271-ex311_7.htm
EX-32 - EX-32 - TAMPA ELECTRIC COck0000096271-ex32_8.htm
EX-31.2 - EX-31.2 - TAMPA ELECTRIC COck0000096271-ex312_6.htm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2018

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

 

 

Commission

File No

 

Exact name of each registrant as specified in its charter, state of

incorporation, address of principal executive offices, telephone number

 

I.R.S. Employer

Identification Number

1-5007

 

TAMPA ELECTRIC COMPANY

 

59-0475140

 

 

(a Florida corporation)

TECO Plaza

702 N. Franklin Street

Tampa, Florida 33602

(813) 228-1111

 

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     YES      NO  

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     YES      NO  

Indicate by check mark whether Tampa Electric Company is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

  

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

  

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

 

  

Emerging growth company

 

If an emerging growth company, indicate by check mark whether Tampa Electric Company has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    

Indicate by check mark whether Tampa Electric Company is a shell company (as defined in Rule 12b-2 of the Exchange Act).     YES      NO  

As of August 7, 2018, there were 10 shares of Tampa Electric Company’s common stock issued and outstanding, all of which were held, beneficially and of record, by TECO Energy, Inc.

Tampa Electric Company meets the conditions set forth in General Instruction (H)(1)(a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format specified in General Instruction H(2) of Form 10-Q.

 

 

 

 

 

 

 


ACRONYMS

Acronyms used in this and other filings with the U.S. Securities and Exchange Commission include the following:

 

Term

  

Meaning

ABS

 

asset-backed security

AFUDC

 

allowance for funds used during construction

AFUDC-debt

 

debt component of allowance for funds used during construction

AFUDC-equity

 

equity component of allowance for funds used during construction

AOCI

 

accumulated other comprehensive income

APBO

 

accumulated postretirement benefit obligation

ARO

 

asset retirement obligation

ASC

 

Accounting Standards Codification

BACT

 

Best Available Control Technology

CAD

 

Canadian dollars

CAIR

 

Clean Air Interstate Rule

CCRs

 

coal combustion residuals

CMO

 

collateralized mortgage obligation

CNG

 

compressed natural gas

CPI

 

consumer price index

CSAPR

 

Cross State Air Pollution Rule

CO2

 

carbon dioxide

CT

 

combustion turbine

ECRC

 

environmental cost recovery clause

EEI

 

Edison Electric Institute

EGWP

 

Employee Group Waiver Plan

Emera

 

Emera Inc., a geographically diverse energy and services company headquartered in Nova Scotia, Canada

EPA

 

U.S. Environmental Protection Agency

ERISA

 

Employee Retirement Income Security Act

EROA

 

expected return on plan assets

EUSHI

 

Emera US Holdings Inc., a wholly owned subsidiary of Emera, which is the sole shareholder of TECO Energy’s common stock

FASB

 

Financial Accounting Standards Board

FDEP

 

Florida Department of Environmental Protection

FERC

 

Federal Energy Regulatory Commission

FPSC

 

Florida Public Service Commission

GHG

 

greenhouse gas(es)

HAFTA

 

Highway and Transportation Funding Act

IGCC

 

integrated gasification combined-cycle

IOU

 

investor owned utility

IRS

 

Internal Revenue Service

ISDA

 

International Swaps and Derivatives Association

ITCs

 

investment tax credits

KW

 

kilowatt(s)

kWac

 

kilowatt on an alternating current basis

MAP-21

 

Moving Ahead for Progress in the 21st Century Act

MBS

 

mortgage-backed securities

MD&A

 

the section of this report entitled Management’s Discussion and Analysis of Financial Condition and Results of Operations

Merger

 

Merger of Merger Sub Company with and into TECO Energy, with TECO Energy as the surviving corporation

MGP

 

manufactured gas plant

Merger Agreement

 

Agreement and Plan of Merger dated September 4, 2015, by and among TECO Energy, Emera and Merger Sub Company

Merger Sub Company

 

Emera US Inc., a Florida corporation

MMA

 

The Medicare Prescription Drug, Improvement and Modernization Act of 2003

MMBTU

 

one million British Thermal Units

MRV

 

market-related value

MW

 

megawatt(s)

MWH

 

megawatt-hour(s)

NAESB

 

North American Energy Standards Board

2


Term

  

Meaning

NAV

 

net asset value

Note

 

Note to consolidated financial statements

NOx

 

nitrogen oxide

NPNS

 

normal purchase normal sale

NYMEX

 

New York Mercantile Exchange

O&M expenses

 

operations and maintenance expenses

OCI

 

other comprehensive income

OPC

 

Office of Public Counsel

OPEB

 

other postretirement benefits

OTC

 

over-the-counter

PBGC

 

Pension Benefit Guarantee Corporation

PBO

 

postretirement benefit obligation

PGA

 

purchased gas adjustment

PGS

 

Peoples Gas System, the gas division of Tampa Electric Company

PPA

 

power purchase agreement

PRP

 

potentially responsible party

R&D

 

research and development

REIT

 

real estate investment trust

RFP

 

request for proposal

ROE

 

return on common equity

Regulatory ROE

 

return on common equity as determined for regulatory purposes

ROW

 

rights-of-way

S&P

 

Standard and Poor’s

SCR

 

selective catalytic reduction

SEC

 

U.S. Securities and Exchange Commission

SO2

 

sulfur dioxide

SoBRAs

 

solar base rate adjustments

SERP

 

Supplemental Executive Retirement Plan

STIF

 

short-term investment fund

Tampa Electric

 

Tampa Electric, the electric division of Tampa Electric Company

TEC

 

Tampa Electric Company

TECO Energy

 

TECO Energy, Inc., the direct parent company of Tampa Electric Company

TSI

 

TECO Services, Inc.

U.S. GAAP

 

generally accepted accounting principles in the United States

VIE

 

variable interest entity

WRERA

 

The Worker, Retiree and Employer Recovery Act of 2008

 

 

 

3


 

TAMPA ELECTRIC COMPANY

Consolidated Condensed Balance Sheets

Unaudited

 

Assets

June 30,

 

 

December 31,

 

(millions)

2018

 

 

2017

 

Property, plant and equipment

 

 

 

 

 

 

 

Utility plant

 

 

 

 

 

 

 

Electric

$

8,682

 

 

$

8,555

 

Gas

 

1,672

 

 

 

1,609

 

Construction work in progress

 

524

 

 

 

263

 

Utility plant, at original costs

 

10,878

 

 

 

10,427

 

Accumulated depreciation

 

(3,108

)

 

 

(2,994

)

Utility plant, net

 

7,770

 

 

 

7,433

 

Other property

 

12

 

 

 

11

 

Total property, plant and equipment, net

 

7,782

 

 

 

7,444

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

15

 

 

 

13

 

Receivables, less allowance for uncollectibles of $1 at June 30, 2018 and December 31, 2017

 

251

 

 

 

257

 

Due from affiliates

 

17

 

 

 

5

 

Inventories, at average cost

 

 

 

 

 

 

 

Fuel

 

48

 

 

 

60

 

Materials and supplies

 

97

 

 

 

90

 

Regulatory assets

 

45

 

 

 

77

 

Prepayments and other current assets

 

15

 

 

 

13

 

Total current assets

 

488

 

 

 

515

 

 

 

 

 

 

 

 

 

Deferred debits

 

 

 

 

 

 

 

Regulatory assets

 

347

 

 

 

356

 

Other

 

47

 

 

 

49

 

Total deferred debits

 

394

 

 

 

405

 

Total assets

$

8,664

 

 

$

8,364

 

 

The accompanying notes are an integral part of the consolidated condensed financial statements.

 

4


 

 TAMPA ELECTRIC COMPANY

Consolidated Condensed Balance Sheets - continued

Unaudited

 

Liabilities and Capitalization

June 30,

 

 

December 31,

 

(millions)

2018

 

 

2017

 

Capitalization

 

 

 

 

 

 

 

Common stock

$

2,860

 

 

$

2,645

 

Accumulated other comprehensive loss

 

(1

)

 

 

(2

)

Retained earnings

 

323

 

 

 

335

 

Total capital

 

3,182

 

 

 

2,978

 

Long-term debt

 

2,205

 

 

 

1,860

 

Total capitalization

 

5,387

 

 

 

4,838

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Long-term debt due within one year

 

0

 

 

 

304

 

Notes payable

 

375

 

 

 

305

 

Accounts payable

 

218

 

 

 

233

 

Due to affiliates

 

15

 

 

 

21

 

Customer deposits

 

131

 

 

 

131

 

Regulatory liabilities

 

61

 

 

 

58

 

Accrued interest

 

14

 

 

 

14

 

Accrued taxes

 

50

 

 

 

12

 

Other

 

17

 

 

 

44

 

Total current liabilities

 

881

 

 

 

1,122

 

 

 

 

 

 

 

 

 

Long-term liabilities

 

 

 

 

 

 

 

Deferred income taxes

 

855

 

 

 

825

 

Regulatory liabilities

 

1,205

 

 

 

1,227

 

Deferred credits and other liabilities

 

336

 

 

 

352

 

Total long-term liabilities

 

2,396

 

 

 

2,404

 

 

 

 

 

 

 

 

 

Commitments and Contingencies (see Note 8)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and capitalization

$

8,664

 

 

$

8,364

 

 

The accompanying notes are an integral part of the consolidated condensed financial statements.


5


 

TAMPA ELECTRIC COMPANY

Consolidated Condensed Statements of Income and Comprehensive Income

Unaudited

 

 

Three months ended June 30,

 

(millions)

2018

 

 

2017

 

Revenues

 

 

 

 

 

 

 

Electric

$

509

 

 

$

542

 

Gas

 

110

 

 

 

102

 

Total revenues

 

619

 

 

 

644

 

Expenses

 

 

 

 

 

 

 

Fuel

 

133

 

 

 

165

 

Purchased power

 

14

 

 

 

8

 

Cost of natural gas sold

 

39

 

 

 

35

 

Operations and maintenance

 

162

 

 

 

131

 

Depreciation and amortization

 

89

 

 

 

88

 

Taxes, other than income

 

51

 

 

 

49

 

Total expenses

 

488

 

 

 

476

 

Income from operations

 

131

 

 

 

168

 

Other income

 

 

 

 

 

 

 

Allowance for equity funds used during construction

 

1

 

 

 

0

 

Other income, net

 

2

 

 

 

2

 

Total other income

 

3

 

 

 

2

 

Interest charges

 

 

 

 

 

 

 

Interest on long-term debt

 

27

 

 

 

28

 

Other interest

 

3

 

 

 

2

 

Allowance for borrowed funds used during construction

 

(1

)

 

 

0

 

Total interest charges

 

29

 

 

 

30

 

Income before provision for income taxes

 

105

 

 

 

140

 

Provision for income taxes

 

20

 

 

 

54

 

Net income

 

85

 

 

$

86

 

Other comprehensive income, net of tax

 

 

 

 

 

 

 

Gain on cash flow hedges

 

1

 

 

 

0

 

Total other comprehensive income, net of tax

 

1

 

 

 

0

 

Comprehensive income

$

86

 

 

$

86

 

 

 

The accompanying notes are an integral part of the consolidated condensed financial statements.

 

6


 

TAMPA ELECTRIC COMPANY

Consolidated Condensed Statements of Income and Comprehensive Income

Unaudited

 

 

Six months ended June 30,

 

(millions)

2018

 

 

2017

 

Revenues

 

 

 

 

 

 

 

Electric

$

970

 

 

$

984

 

Gas

 

246

 

 

 

213

 

Total revenues

 

1,216

 

 

 

1,197

 

Expenses

 

 

 

 

 

 

 

Fuel

 

255

 

 

 

296

 

Purchased power

 

27

 

 

 

15

 

Cost of natural gas sold

 

94

 

 

 

71

 

Operations and maintenance

 

319

 

 

 

259

 

Depreciation and amortization

 

182

 

 

 

173

 

Taxes, other than income

 

103

 

 

 

98

 

Total expenses

 

980

 

 

 

912

 

Income from operations

 

236

 

 

 

285

 

Other income

 

 

 

 

 

 

 

Allowance for equity funds used during construction

 

1

 

 

 

1

 

Other income, net

 

4

 

 

 

4

 

Total other income

 

5

 

 

 

5

 

Interest charges

 

 

 

 

 

 

 

Interest on long-term debt

 

54

 

 

 

56

 

Other interest

 

6

 

 

 

4

 

Allowance for borrowed funds used during construction

 

(1

)

 

 

(1

)

Total interest charges

 

59

 

 

 

59

 

Income before provision for income taxes

 

182

 

 

 

231

 

Provision for income taxes

 

34

 

 

 

89

 

Net income

$

148

 

 

$

142

 

Other comprehensive income, net of tax

 

 

 

 

 

 

 

Gain on cash flow hedges

 

1

 

 

 

1

 

Total other comprehensive income, net of tax

 

1

 

 

 

1

 

Comprehensive income

$

149

 

 

$

143

 

 

The accompanying notes are an integral part of the consolidated condensed financial statements.

 

7


 

TAMPA ELECTRIC COMPANY

Consolidated Condensed Statements of Cash Flows

Unaudited

 

 

Six months ended June 30,

 

(millions)

2018

 

 

2017

 

Cash flows from operating activities

 

 

 

 

 

 

 

Net income

$

148

 

 

$

142

 

Adjustments to reconcile net income to cash from operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

182

 

 

 

173

 

Deferred income taxes and investment tax credits

 

14

 

 

 

87

 

Deferred recovery clauses

 

(25

)

 

 

(52

)

Receivables, less allowance for uncollectibles

 

2

 

 

 

(23

)

Inventories

 

5

 

 

 

(16

)

Taxes accrued

 

28

 

 

 

27

 

Accounts payable

 

(37

)

 

 

(88

)

Regulatory assets and liabilities

 

54

 

 

 

(6

)

Other

 

(25

)

 

 

(16

)

Cash flows from operating activities

 

346

 

 

 

228

 

Cash flows used in investing activities

 

 

 

 

 

 

 

Capital expenditures

 

(510

)

 

 

(299

)

Cash flows used in investing activities

 

(510

)

 

 

(299

)

Cash flows from financing activities

 

 

 

 

 

 

 

Equity contributions from TECO Energy

 

215

 

 

 

58

 

Proceeds from long-term debt issuance

 

345

 

 

 

0

 

Repayment of long-term debt

 

(304

)

 

 

0

 

Net increase in short-term debt

 

70

 

 

 

128

 

Dividends to TECO Energy

 

(160

)

 

 

(109

)

Other financing activities

 

0

 

 

 

(1

)

Cash flows from financing activities

 

166

 

 

 

76

 

Net increase in cash and cash equivalents

 

2

 

 

 

5

 

Cash and cash equivalents at beginning of period

 

13

 

 

 

10

 

Cash and cash equivalents at end of period

$

15

 

 

$

15

 

Supplemental disclosure of non-cash activities

 

 

 

 

 

 

 

Change in accrued capital expenditures

$

18

 

 

$

(24

)

 

The accompanying notes are an integral part of the consolidated condensed financial statements.

 

 

8


 

TAMPA ELECTRIC COMPANY

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

UNAUDITED

 

1. Summary of Significant Accounting Policies

See TEC’s Annual Report on Form 10-K for the year ended December 31, 2017 for a complete discussion of accounting policies. The significant accounting policies for TEC include:

Principles of Consolidation and Basis of Presentation

TEC is a wholly owned subsidiary of TECO Energy, which is an indirect, wholly owned subsidiary of Emera. TEC is comprised of the electric division, referred to as Tampa Electric, and the natural gas division, referred to as PGS.

Intercompany balances and transactions within the divisions have been eliminated in consolidation. In the opinion of management, the unaudited consolidated condensed financial statements include all adjustments that are of a recurring nature and necessary to state fairly the financial position of TEC as of June 30, 2018 and December 31, 2017, and the results of operations and cash flows for the periods ended June 30, 2018 and 2017. The results of operations for the three and six months ended June 30, 2018 are not necessarily indicative of the results that can be expected for the entire fiscal year ending December 31, 2018.

The use of estimates is inherent in the preparation of financial statements in accordance with U.S. GAAP. Actual results could differ from these estimates. The year-end consolidated condensed balance sheet was derived from audited financial statements; however, this quarterly report on Form 10-Q does not include all year-end disclosures required for an annual report on Form 10-K by U.S. GAAP.

Revenue Recognition

Regulated electric revenue

Electric revenues, including energy charges, demand charges, basic facilities charges and applicable clauses and riders, are recognized when obligations under the terms of a contract are satisfied. This occurs primarily when electricity is delivered to customers over time as the customer simultaneously receives and consumes the benefits of the electricity. Electric revenues are recognized on an accrual basis and include billed and unbilled revenues. Revenues related to the sale of electricity are recognized at rates approved by the respective regulator and recorded based on metered usage, which occur on a periodic, systematic basis, generally monthly. At the end of each reporting period, the electricity delivered to customers, but not billed, is estimated and the corresponding unbilled revenue is recognized. TEC’s estimate of unbilled revenue at the end of the reporting period is calculated by estimating the number of MWh delivered to customers at the established rate expected to prevail in the upcoming billing cycle. This estimate includes assumptions as to the pattern of energy demand, weather, line losses and inter-period changes to customer classes.

Regulated gas revenue

Gas revenues, including energy charges, demand charges, basic facilities charges and applicable clauses and riders, are recognized when obligations under the terms of a contract are satisfied. This occurs primarily when gas is delivered to customers over time as the customer simultaneously receives and consumes the benefits of the gas. Gas revenues are recognized on an accrual basis and include billed and unbilled revenues.  Revenues related to the distribution and sale of gas are recognized at rates approved by the regulator and recorded based on metered usage, which occur on a periodic, systematic basis, generally monthly. At the end of each reporting period, the gas delivered to customers, but not billed, is estimated and the corresponding unbilled revenue is recognized. TEC’s estimate of unbilled revenue at the end of the reporting period is calculated by estimating the number of therms delivered to customers at the established rate expected to prevail in the upcoming billing cycle. This estimate includes assumptions as to the pattern of usage, weather, and inter-period changes to customer classes.

Other

See Accounting for Franchise Fees and Gross Receipts below for the accounting for gross receipts taxes. Sales and other taxes TEC collects concurrent with revenue-producing activities are excluded from revenue.  

Receivables and Allowance for Uncollectible Accounts

Receivables from contracts with customers, which consist of services to residential, commercial, industrial and other customers, were $249 million and $229 million as of June 30, 2018 and December 31, 2017, respectively. An allowance for uncollectible accounts is established based on TEC’s collection experience. Circumstances that could affect Tampa Electric’s and PGS’s estimates of uncollectible receivables include, but are not limited to, customer credit issues, the level of natural gas prices, customer deposits and general economic conditions. Accounts are written off once they are deemed to be uncollectible.

As of June 30, 2018 and December 31, 2017, unbilled revenues of $80 million and $66 million, respectively, are included in the “Receivables” line item on the Consolidated Condensed Balance Sheets.

9


 

Accounting for Franchise Fees and Gross Receipts

Tampa Electric and PGS are allowed to recover certain costs from customers on a dollar-per-dollar basis through rates approved by the FPSC. The amounts included in customers’ bills for franchise fees and gross receipt taxes are included as revenues on the Consolidated Condensed Statements of Income. Franchise fees and gross receipt taxes payable by Tampa Electric and PGS are included as an expense on the Consolidated Condensed Statements of Income in “Taxes, other than income”. These amounts totaled $28 million and $29 million for the three months ended June 30, 2018 and 2017, respectively, and $57 million and $54 million for the six months ended June 30, 2018 and 2017, respectively.

 

2. New Accounting Pronouncements

Change in Accounting Policy

The new U.S. GAAP accounting policies that are applicable to and adopted by TEC in 2018 are described as follows:

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

In February 2018, the FASB issued Accounting Standard Update (ASU) No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The standard allows reclassification from accumulated other comprehensive income to retained earnings for certain tax effects resulting from the U.S. Tax Cuts and Jobs Act that would otherwise be stranded in accumulated other comprehensive income or loss. This guidance is effective for annual reporting periods, including interim reporting within those periods, beginning after December 15, 2018, with early adoption permitted. TEC has early adopted the standard in June 2018 and elected to not reclassify tax effects resulting from the U.S. Tax Cuts and Jobs Act stranded in accumulated other comprehensive income to retained earnings as amounts were not material. TEC utilizes a portfolio approach in order to determine the timing and extent to which stranded income tax effects from items that were previously recorded in accumulated other comprehensive income are released. There is no impact on TEC’s Condensed Consolidated Financial Statements for the period ended June 30, 2018 as a result of implementation of this standard.

Revenue from Contracts with Customers

On January 1, 2018, TEC adopted ASU 2014-09, Revenue from Contracts with Customers and all the related amendments, which created a new, principle-based revenue recognition framework. The standard has been codified as ASC Topic 606. The core principle is that a company should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled to. The guidance requires additional disclosures regarding the nature, amount, timing and uncertainty of revenue and related cash flows arising from contracts with customers. This guidance is effective for annual reporting periods, including interim reporting within those periods, beginning after December 15, 2017.

 

TEC adopted ASC 606 using the modified retrospective method. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with historic accounting practices. The adoption of ASC 606 resulted in no adjustments to TEC’s opening retained earnings as of the adoption date or TEC’s Condensed Consolidated Income Statement for the three and six months ended June 30, 2018. The impact of the adoption of the new standard was immaterial to TEC’s net income and is expected to be immaterial on an ongoing basis.

Recognition and Measurement of Financial Assets and Financial Liabilities

On January 1, 2018, TEC adopted ASU 2016-01, Financial Instruments – Recognition and Measurement of Financial Assets and Financial Liabilities and all the related amendments. The standard provides guidance for the recognition, measurement, presentation and disclosure of financial assets and liabilities. This guidance is effective for annual reporting periods, including interim reporting within those periods, beginning after December 15, 2017. There was no impact on the consolidated financial statements as a result of the adoption of this standard.

Clarifying the Definition of a Business

In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business. The standard provides guidance to assist entities with evaluating when a set of transferred assets and activities is a business. This guidance is effective for annual reporting periods, including interim reporting within those periods, beginning after December 15, 2017 and is required to be applied prospectively. TEC adopted ASU 2017-01 effective January 1, 2018. There was no impact on the consolidated financial statements as a result of the adoption of this standard.

10


 

Future Accounting Pronouncements

TEC considers the applicability and impact of all ASUs issued by the FASB.  The ASUs that have been issued, but that are not yet effective, are consistent with those disclosed in TEC’s Annual Report on Form 10-K for the year ended December 31, 2017, with updates noted below.

Leases

In February 2016, the FASB issued ASU 2016-02, Leases. The standard, codified as ASC Topic 842, increases transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet for leases with terms of more than 12 months. Under the existing guidance, operating leases are not recorded as assets and liabilities on the balance sheet. The effect of leases on the consolidated statements of income and the consolidated statements of cash flows is largely unchanged. The guidance will require additional disclosures regarding key information about leasing arrangements. This guidance is effective for annual reporting periods, including interim reporting within those periods, beginning after December 15, 2018. Early adoption is permitted and is required to be applied using a modified retrospective approach. TEC will not early adopt the standard.

In January 2018, the FASB issued an amendment to ASC Topic 842 which permits companies to elect to not evaluate existing land easements under the new standard if the land easements were not previously accounted for under existing lease guidance. TEC expects to make this election. In July 2018, the FASB issued an amendment to ASC Topic 842 which permits companies to elect not to restate their comparative periods in the period of adoption when transitioning to the standard. TEC expects to make this election.

The standard will affect TEC’s financial position by increasing the assets and liabilities recorded relating to its operating leases. However, the ultimate impact of the new standard on TEC’s financial statements and disclosures has not yet been fully determined. In 2017, TEC developed and began execution of a project plan which included holding training sessions with key stakeholders throughout the organization and gathering detailed information on existing lease arrangements. Activities currently being executed include evaluating the available implementation alternatives, calculating the lease asset and liability balances associated with individual contractual arrangements and assessing the disclosure requirements. TEC will implement additional processes and controls to facilitate the identification, tracking and reporting of potential leases based on the requirements of the standard. Significant updates to systems are not expected. TEC continues to monitor FASB amendments to ASC Topic 842.

 

 

3. Regulatory

Tampa Electric Base Rates - 2017 Agreement

On September 27, 2017, Tampa Electric filed with the FPSC an amended and restated settlement agreement that replaced the 2013 base rate settlement agreement and extended it four years through December 31, 2021. The FPSC approved the agreement on November 6, 2017.

The amended agreement provides for SoBRAs for TEC’s investments in solar generation. The solar investments are expected to go into service in tranches beginning in September 2018 through January 2021. In order for each tranche of SoBRAs to take effect, Tampa Electric must show that each tranche is cost-effective and each individual project has a cost cap of $1,500/kWac.  Additionally, in order to receive a SoBRA for the last tranche of 50 MWs, the first two tranches of 400 MW must be constructed at or below $1,475/kWac. Tampa Electric plans to invest approximately $850 million in these solar projects.   

The amended agreement further contains a provision whereby Tampa Electric agrees to quantify the impact of tax reform on net operating income and neutralize the impact of tax reform through a reduction in base revenues within 120 days of when tax reform becomes law. Additionally, any effects of tax reform between the effective date and the date the base rates are adjusted would be refunded through a one-time clause refund in 2019. See “Tampa Electric Tax Reform and Storm Settlement” below for information regarding the impact of tax reform.

On December 12, 2017, TEC filed its first petition regarding the SoBRAs along with supporting tariffs demonstrating the cost-effectiveness of the September 1, 2018 tranche representing 145 MW and $24 million annually in estimated revenue requirements. The FPSC approved the tariffs on the first SoBRA filing on May 8, 2018. On June 29, 2018, TEC filed its second SoBRA petition along with supporting tariffs demonstrating the cost-effectiveness of the January 1, 2019 tranche representing 260 MW and $46 million annually in estimated revenue requirements. A decision by the FPSC on the second SoBRA is anticipated to occur in October 2018.

11


 

Tampa Electric Storm Restoration Cost Recovery

As a result of Tampa Electric’s 2013 rate case settlement, in the event of a named storm that results in damage to its system, Tampa Electric can petition the FPSC to seek recovery of those costs over a 12-month period or longer as determined by the FPSC, as well as replenish its reserve to $56 million, the level of the reserve as of October 31, 2013. In the third quarter of 2017, Tampa Electric was impacted by Hurricane Irma and incurred storm restoration costs of approximately $102 million, of which $90 million was charged to the storm reserve, $3 million was charged to O&M expense and $9 million was charged to capital expenditures. At December 31, 2017, the amount of estimated costs charged to the storm reserve regulatory liability exceeded the balance in the storm reserve by $47 million, which was recorded as a regulatory asset on the balance sheet as allowed by an FPSC order. This regulatory asset amount was reduced in the second quarter of 2018 to reflect partial recovery as discussed in Tampa Electric Tax Reform and Storm Settlement below. Tampa Electric petitioned the FPSC on December 28, 2017 for recovery of estimated storm costs in excess of the reserve and to replenish the balance in the reserve to the $56 million level that existed as of October 31, 2013. An amended petition was filed with the FPSC on January 30, 2018. See the Regulatory Assets and Liabilities table below.

Tampa Electric Tax Reform and Storm Settlement

On March 1, 2018, the FPSC approved a settlement agreement filed by Tampa Electric that addresses both the recovery of storm costs and the return of tax reform benefits to customers (see Note 4) while keeping customer rates stable in 2018. Beginning on April 1, 2018, the agreement authorizes Tampa Electric to net the estimated amount of storm cost recovery against Tampa Electric’s estimated 2018 tax reform benefits. As a result, in the first quarter of 2018, Tampa Electric recorded O&M expense and a regulatory liability of $19 million in order to offset tax reform benefits in the first quarter due to the agreement allowing the netting of the recovery of storm costs with tax reform benefits. This deferral was recorded as a result of deferring the impact of the first quarter as the effective date of the agreement is April 1, 2018. Beginning on April 1, 2018, the regulatory liability is being amortized over the remainder of 2018 as a credit against the recognition of storm expense. Amortization of $5 million was recorded as a reduction to O&M expense in the second quarter of 2018. In the second quarter of 2018, Tampa Electric recorded O&M expense and a reduction of the storm reserve regulatory asset of approximately $35 million to reflect effective recovery of the storm costs due to the allowed netting of storm cost recovery with tax reform benefits. Tampa Electric’s final storm costs subject to netting and final impact of tax reform on Tampa Electric’s base rates pursuant to the 2017 agreement will be determined in separate regulatory proceedings. Any difference will be trued up and recovered from or returned to customers in 2019. Tampa Electric’s updated 2018 tax reform benefits is approximately $102 million, which is slightly higher than the revised recoverable storm costs. In addition, beginning in January 2019, Tampa Electric will reflect the impact of tax reform on its base rates. Tampa Electric filed testimony supporting the calculation of the tax benefits on May 31, 2018. Hearings on the tax reform impacts for all state utilities have been scheduled for late August 2018.

PGS Base Rates

PGS’s base rates were established in May 2009. An updated settlement agreement was approved by the FPSC on February 7, 2017.

The PGS settlement does not contain a provision for tax reform. The FPSC approved that tax reform benefits should be applied to customers beginning on February 6, 2018 for utilities in Florida without an existing tax reform settlement provision, including PGS. As a result, PGS deferred the estimated tax reform benefits to customers and recorded O&M expense and a regulatory tax liability of $5 million for the period February 6 to June 30, 2018, which is subject to negotiations with the FPSC. PGS filed testimony supporting the calculation of the tax benefits on May 31, 2018. A hearing on the tax reform impact has been scheduled for late August 2018.

Regulatory Assets and Liabilities

Tampa Electric and PGS apply the FASB’s accounting standards for regulated operations. Regulatory assets generally represent incurred costs that have been deferred, as their future recovery in customer rates is probable. Regulatory liabilities generally represent obligations to make refunds to customers from previous collections for costs that are not likely to be incurred or the advance recovery of expenditures for approved costs.

Details of the regulatory assets and liabilities are presented in the following table:

12


 

 

Regulatory Assets and Liabilities

 

 

 

 

 

 

 

(millions)

June 30, 2018

 

 

December 31, 2017

 

Regulatory assets:

 

 

 

 

 

 

 

Regulatory tax asset (1)

$

44

 

 

$

45

 

Cost-recovery clauses - deferred balances (2)

 

22

 

 

 

13

 

Environmental remediation (3)

 

29

 

 

 

33

 

Postretirement benefits (4)

 

263

 

 

 

272

 

Storm reserve (5)

 

9

 

 

 

47

 

Other

 

25

 

 

 

23

 

Total regulatory assets

 

392

 

 

 

433

 

Less: Current portion

 

45

 

 

 

77

 

Long-term regulatory assets

$

347

 

 

$

356

 

Regulatory liabilities:

 

 

 

 

 

 

 

Regulatory tax liability (6)

$

719

 

 

$

730

 

Tax reform and storm agreement (7)

 

13

 

 

 

0

 

Cost-recovery clauses (2)

 

17

 

 

 

32

 

Accumulated reserve - cost of removal (8)

 

512

 

 

 

518

 

Other

 

5

 

 

 

5

 

Total regulatory liabilities

 

1,266

 

 

 

1,285

 

Less: Current portion

 

61

 

 

 

58

 

Long-term regulatory liabilities

$

1,205

 

 

$

1,227

 

(1)

The regulatory tax asset is primarily associated with the depreciation and recovery of AFUDC-equity. This asset does not earn a return but rather is included in the capital structure, which is used in the calculation of the weighted cost of capital used to determine revenue requirements. It will be recovered over the expected life of the related assets. The regulatory tax asset balance reflects the impact of the federal tax rate reduction.  

(2)

These assets and liabilities are related to FPSC clauses and riders. They are recovered or refunded through cost-recovery mechanisms approved by the FPSC on a dollar-for-dollar basis in the next year. In the case of the regulatory asset related to derivative liability, recovery occurs in the year following the settlement of the derivative position.

(3)

This asset is related to costs associated with environmental remediation primarily at MGP sites. The balance is included in rate base, partially offsetting the related liability, and earns a rate of return as permitted by the FPSC. The timing of recovery is based on a settlement agreement approved by the FPSC.

(4)

This asset is related to the deferred costs of postretirement benefits and it is amortized over the remaining service life of plan participants. Deferred costs of postretirement benefits that are included in expense are recognized as cost of service for rate-making purposes as permitted by the FPSC.

(5)

See Tampa Electric Storm Restoration Cost Recovery above for information regarding this reserve. The regulatory asset is included in rate base and earns a rate of return as permitted by the FPSC. The asset will be recovered over a 12-month period.

(6)

The regulatory tax liability is primarily related to the revaluation of TEC’s deferred income tax balances at the lower income tax rate recorded in December 2017. The liability related to the revaluation of the deferred income tax balances has been classified as non-current due to uncertainties around the timing and other regulatory decisions that will affect the amount of regulatory tax liability amortized and returned to customers through rate reductions or other revenue offsets in 2018. See Note 4 to the TEC Consolidated Condensed Financial Statements for further information.

(7)

This regulatory liability represents the offset to tax reform benefits in the first quarter of 2018 due to Tampa Electric’s settlement agreement allowing the netting of the recovery of storm costs with tax reform benefits. Beginning on April 1, 2018, the amount is being amortized over the remainder of 2018. See Tampa Electric Tax Reform and Storm Settlement above for further information.

(8)

This item represents the non-ARO cost of removal in the accumulated reserve for depreciation. AROs are costs for legally required removal of property, plant and equipment. Non-ARO cost of removal represents estimated funds received from customers through depreciation rates to cover future non-legally required cost of removal of property, plant and equipment, net of salvage value upon retirement, which reduces rate base for ratemaking purposes. This liability is reduced as costs of removal are incurred.

 

 

13


 

4. Income Taxes

U.S. Tax Reform

On December 22, 2017, the U.S. Tax Cuts and Jobs Act of 2017 (the Act) was signed into legislation. The Act includes a broad range of tax reform changes affecting businesses, effective January 1, 2018 which provide a corporate federal tax rate reduction from 35% to 21%, 100% asset expensing, limitation of interest deduction, the repeal of section 199 domestic production deduction and the preservation of the existing normalization rules. The Act also provides that regulated electric and gas companies are exempt from the 100% asset expensing and interest expense deduction limitation. In accordance with U.S. GAAP, TEC was required to revalue its deferred income tax assets and liabilities based on the new 21% federal tax rate at the date of enactment. Additionally, under FPSC rules TEC was required to adjust deferred income tax assets and liabilities for changes in tax rates with a corresponding regulatory liability for the excess deferred taxes generated by the tax rate differential. See Note 3.

TEC continues to analyze certain aspects of the Act, including the uncertainty of the application of 100% asset expensing rules after September 27, 2017, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. Further adjustments, if any, will be recorded by TEC during the measurement period in 2018 as permitted by SEC Staff Accounting Bulletin 118, Income tax Accounting Implications of the Tax Cuts and Jobs Act. No measurement period adjustments have been recognized during the first half of 2018.

 

Income Tax Expense

TEC is included in a consolidated U.S. federal income tax return with EUSHI and its subsidiaries. TEC’s income tax expense is based upon a separate return method, modified for the benefits-for-loss allocation in accordance with respective tax sharing agreements with TECO Energy and EUSHI. To the extent that TEC’s cash tax positions are settled differently than the amount reported as realized under the tax sharing agreement, the difference is accounted for as either a capital contribution or a distribution.

TEC’s effective tax rates for the six months ended June 30, 2018 and 2017 were 18.68% and 38.53%, respectively. The decrease in the effective tax rates in 2018 versus the same period in 2017 was primarily due to tax reform impacts. TEC’s effective tax rate for the six months ended June 30, 2018 differed from the statutory rate principally due to the amortization of the regulatory tax liability resulting from tax reform. See Note 3 for further information regarding the regulatory tax liability. TEC’s effective tax rate for the six months ended June 30, 2017 differed from the statutory rate principally due to state income taxes.

Unrecognized Tax Benefits

As of June 30, 2018, the amount of unrecognized tax benefits was $8 million, all of which was recorded as a reduction of deferred income tax assets for tax credit carryforwards. TEC believes that the total unrecognized tax benefits will decrease and be recognized within the next twelve months due to the ongoing audit examination of TECO Energy’s consolidated federal income tax return for the short tax year ending June 30, 2016. TEC had $8 million of unrecognized tax benefits at June 30, 2018, that, if recognized, would reduce TEC’s effective tax rate.

 

 

14


 

5. Employee Postretirement Benefits

 

TEC is a participant in the comprehensive retirement plans of TECO Energy. The following table presents detail related to TECO Energy’s periodic benefit cost for pension and other postretirement benefits. Amounts disclosed for TECO Energy’s pension benefits include the amounts related to its qualified pension plan and non-qualified, non-contributory SERP and Restoration Plan.

 

TECO Energy Benefit Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(millions)

Pension Benefits

 

 

Other Postretirement Benefits

 

Three months ended June 30,

2018

 

 

2017

 

 

2018

 

 

2017

 

Components of net periodic benefit cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service cost

$

6

 

 

$

5

 

 

$

0

 

 

$

0

 

Interest cost

 

7

 

 

 

9

 

 

 

2

 

 

 

2

 

Expected return on assets

 

(12

)

 

 

(12

)

 

 

0

 

 

 

0

 

Amortization of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior service (benefit) cost

 

0

 

 

 

0

 

 

 

1

 

 

 

1

 

Actuarial (gain) loss

 

4

 

 

 

4

 

 

 

(1

)

 

 

(1

)

Settlement cost

 

2

 

(2)

 

0

 

 

 

0

 

 

 

0

 

Net periodic benefit cost

$

7

 

 

$

6

 

 

$

2

 

 

$

2

 

Six months ended June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Components of net periodic benefit cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service cost

$

11

 

 

$

10

 

 

$

1

 

 

$

1

 

Interest cost

 

14

 

 

 

16

 

 

 

4

 

 

 

4

 

Expected return on assets

 

(24

)

 

 

(24

)

 

 

0

 

 

 

0

 

Amortization of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior service (benefit) cost

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

Actuarial (gain) loss

 

9

 

 

 

8

 

 

 

(1

)

 

 

(1

)

Settlement cost

 

2

 

(2)

 

7

 

(1)

 

0

 

 

 

0

 

Net periodic benefit cost

$

12

 

 

$

17

 

 

$

4

 

 

$

4

 

 

 

(1)

Represents TECO Energy’s SERP settlement charge as a result of retirements that occurred subsequent to the Merger with Emera. The charge did not impact TEC’s financial statements.

 

(2)

Represents TECO Energy’s SERP and Restoration Plan settlement charges as a result of the retirements of certain executives.

TEC’s portion of the net periodic benefit cost for the three months ended June 30, 2018 and 2017, respectively, was $6 million and $4 million for pension benefits, and $2 million and $2 million for other postretirement benefits. TEC’s portion of the net periodic benefit cost for the six months ended June 30, 2018 and 2017, respectively, was $9 million and $7 million for pension benefits, and $4 million and $3 million for other postretirement benefits  

TECO Energy assumed a long-term EROA of 6.85% and a discount rate of 3.63% for pension benefits under its qualified pension plan for 2018. For TECO Energy’s other postretirement benefits, TECO Energy used a discount rate of 3.70% for 2018.

TECO Energy made contributions of $10 million and $25 million to its qualified pension plan in the six months ended June 30, 2018 and 2017, respectively. TEC’s portion of these contributions was $8 million and $20 million, respectively. TECO Energy and TEC do not expect to make additional contributions to the pension plan for the remainder of 2018.

Included in the benefit cost discussed above, for the three and six months ended June 30, 2018, TEC reclassified $4 million and $8 million, respectively, of unamortized prior service benefits and costs and actuarial gains and losses from regulatory assets to net income, compared with $3 million and $5 million for the three and six months ended June 30, 2017, respectively.

 

 

15


 

6. Short-Term Debt

Details of the credit facilities and related borrowings are presented in the following table:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2018

 

 

December 31, 2017

 

 

 

 

 

 

 

 

 

 

Letters

 

 

 

 

 

 

 

 

 

 

Letters

 

 

Credit

 

 

Borrowings

 

 

of Credit

 

 

Credit

 

 

Borrowings

 

 

of Credit

 

(millions)

Facilities

 

 

Outstanding (1)

 

 

Outstanding

 

 

Facilities

 

 

Outstanding (1)

 

 

Outstanding

 

Tampa Electric Company:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5-year facility (2)

$

325

 

 

$

0

 

 

$

1

 

 

$

325

 

 

$

5

 

 

$

1

 

3-year accounts

   receivable facility (3)

 

150

 

 

 

75

 

 

 

0

 

 

 

150

 

 

 

0

 

 

 

0

 

1-year term facility (4)

 

300

 

 

 

300

 

 

 

0

 

 

 

300

 

 

 

300

 

 

 

0

 

Total

$

775

 

 

$

375

 

 

$

1

 

 

$

775

 

 

$

305

 

 

$

1

 

(1)

Borrowings outstanding are reported as notes payable.

(2)

This 5-year facility matures March 22, 2022.

(3)

This 3-year facility matures March 22, 2021.

(4)

This 1-year facility matures on November 1, 2018.

At June 30, 2018, these credit facilities required commitment fees ranging from 12.5 to 35.0 basis points. The weighted-average interest rate on outstanding amounts payable under the credit facilities at June 30, 2018 and December 31, 2017 was 2.7% and 2.1%, respectively.

Tampa Electric Company Accounts Receivable Facility

On March 23, 2018, TEC amended its $150 million accounts receivable collateralized borrowing facility in order to extend the scheduled termination date to March 22, 2021, by entering into a Second Amended Loan and Servicing Agreement, among TEC, certain lenders and the program agent (the Loan Agreement). TEC will pay program and liquidity fees, which total 70 basis points at June 30, 2018. Interest rates on the borrowings are based on prevailing asset-backed commercial paper rates, unless such rates are not available from conduit lenders, in which case the rates will be at an interest rate equal to either The Bank of Tokyo-Mitsubishi UFJ, Ltd.’s prime rate, the federal funds rate, or the London interbank deposit rate, plus a margin.  In the case of default, as defined under the terms of the Loan Agreement, TEC has pledged as collateral a pool of receivables equal to the borrowings outstanding. TEC continues to service, administer and collect the pledged receivables, which are classified as receivables on the balance sheet. As of June 30, 2018, TEC was in compliance with the requirements of the Loan Agreement.  

 

 

 

7. Long-Term Debt

Fair Value of Long-Term Debt

At June 30, 2018, TEC’s long-term debt had a carrying amount of $2,205 million and an estimated fair market value of $2,073 million. At December 31, 2017, TEC’s total long-term debt had a carrying amount of $2,164 million and an estimated fair market value of $2,412 million. The fair value of debt securities determined using Level 1 measurements was zero at June 30, 2018 and $55 million at December 31, 2017. The fair value of the remaining debt securities is determined using Level 2 measurements (see Note 12 for information regarding the fair value hierarchy).

Issuance of Tampa Electric Company 4.3% Notes due 2048

On June 7, 2018, TEC completed an offering of $350 million aggregate principal amount of 4.3% unsecured notes due June 15, 2048 (the TEC 2018 Notes). Until December 15, 2047, TEC may redeem all or any part of the TEC 2018 Notes at its option at any time and from time to time at a redemption price equal to the greater of (i) 100% of the principal amount of the TEC 2018 Notes to be redeemed or (ii) the sum of the present value of the remaining payments of principal and interest on the TEC 2018 Notes to be redeemed, discounted at an applicable treasury rate (as defined in the indenture), plus 20 basis points; in either case, the redemption price would include accrued and unpaid interest to the redemption date.  At any time on or after December 15, 2047, TEC may, at its option, redeem the TEC 2018 Notes, in whole or in part, at 100% of the principal amount of the TEC 2018 Notes being redeemed plus accrued and unpaid interest thereon to, but excluding, the date of redemption.

 

 

16


 

8. Commitments and Contingencies

Legal Contingencies

From time to time, TEC and its subsidiaries are involved in various legal, tax and regulatory proceedings before various courts, regulatory commissions and governmental agencies in the ordinary course of business. Where appropriate, accruals are made in accordance with accounting standards for contingencies to provide for matters that are probable of resulting in an estimable loss.

Superfund and Former Manufactured Gas Plant Sites

TEC, through its Tampa Electric and PGS divisions, is a PRP for certain superfund sites and, through its PGS division, for certain former MGP sites. While the joint and several liability associated with these sites presents the potential for significant response costs, as of June 30, 2018, TEC has estimated its ultimate financial liability to be $28 million, primarily at PGS. This amount has been accrued and is primarily reflected in the long-term liability section under “Deferred credits and other liabilities” on the Consolidated Condensed Balance Sheets. The environmental remediation costs associated with these sites are expected to be paid over many years.

The estimated amounts represent only the portion of the cleanup costs attributable to TEC. The estimates to perform the work are based on TEC’s experience with similar work, adjusted for site-specific conditions and agreements with the respective governmental agencies. The estimates are made in current dollars, are not discounted and do not assume any insurance recoveries.

In instances where other PRPs are involved, most of those PRPs are creditworthy and are likely to continue to be creditworthy for the duration of the remediation work. However, in those instances that they are not, TEC could be liable for more than TEC’s currently assessed percentage of the remediation costs.

Factors that could impact these estimates include the ability of other PRPs to pay their pro-rata portion of the cleanup costs, additional testing and investigation which could expand the scope of the cleanup activities, additional liability that might arise from the cleanup activities themselves or changes in laws or regulations that could require additional remediation. Under current regulations, these costs are recoverable through customer rates established in subsequent base rate proceedings.

Long-Term Commitments

TEC has commitments for purchased power, long-term leases (primarily for land, building space, vehicles, office equipment and heavy equipment), other purchase obligations, long-term service agreements and capital projects.  In addition, TEC has payment obligations under contractual agreements for fuel, fuel transportation and power purchases that are recovered from customers under regulatory clauses. The following is a schedule of future payments under PPAs, minimum lease payments with non-cancelable lease terms in excess of one year, and other net purchase obligations/commitments at June 30, 2018:

 

 

 

 

 

 

 

 

 

 

 

Long-term Service

 

 

 

 

 

 

 

 

 

 

 

Purchased

 

 

Operating

 

 

Agreements/Capital

 

 

Clause Recoverable

 

 

 

 

 

(millions)

 

Power

 

 

Leases

 

 

Projects

 

 

Commitments

 

 

Total

 

Year ended December 31:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

$

17

 

 

$

2

 

 

$

308

 

 

$

248

 

 

$

575

 

2019

 

 

0

 

 

 

2

 

 

 

173

 

 

 

230

 

 

 

405

 

2020

 

 

0

 

 

 

2

 

 

 

52

 

 

 

178

 

 

 

232

 

2021

 

 

0

 

 

 

2

 

 

 

26

 

 

 

144

 

 

 

172

 

2022

 

 

0

 

 

 

2

 

 

 

8

 

 

 

136

 

 

 

146

 

Thereafter

 

 

0

 

 

 

36