Company: WELPM
Filing Date: 2025-08-01
Form Type: 10-Q
Source: 0000107815-25-000204
Chunk: 116

Company: WISCONSIN ELECTRIC POWER CO
Filing Date: 2025-08-01
Form: 10-Q
Item: Part I, Item 8
Chunk 116
---
 electric transmission congestion costs in the MISO Energy and Operating Reserves Markets.The following table summarizes the changes to derivatives classified as Level 3 in the fair value hierarchy:Three Months Ended June 30Six Months Ended June 30(in millions)2025202420252024Balance at the beginning of the period$1.1 $1.0 $2.9 $2.5 Purchases12.1 12.1 12.1 12.1 Settlements(3.3)(3.4)(5.1)(4.9)Balance at the end of the period$9.9 $9.7 $9.9 $9.7 Fair Value of Financial InstrumentsThe following table shows the financial instruments included on our balance sheets that were not recorded at fair value:June 30, 2025December 31, 2024(in millions)Carrying AmountFair ValueCarrying AmountFair ValuePreferred stock$30.4 $21.7 $30.4 $21.2 Long-term debt, including current portion3,734.4 3,605.9 3,987.2 3,792.3 The fair values of our long-term debt and preferred stock are categorized within Level 2 of the fair value hierarchy.

NOTE 14—DERIVATIVE INSTRUMENTS

We use derivatives as part of our risk management program to manage the risks associated with the price volatility of purchased power, generation, and natural gas costs for the benefit of our customers. Our approach is non-speculative and designed to mitigate risk. Our regulated hedging programs are approved by the PSCW.We record derivative instruments on our balance sheets as an asset or liability measured at fair value unless they qualify for the normal purchases and sales exception and are so designated. We continually assess our contracts designated as normal and will discontinue the treatment of these contracts as normal if the required criteria are no longer met. Changes in the derivative's fair value are recognized currently in earnings unless specific hedge accounting criteria are met or we receive regulatory treatment for the derivative. For most energy-related physical and financial contracts in our regulated operations that qualify as derivatives, the PSCW allows the effects of fair value accounting to be offset to regulatory assets and liabilities.

06/30/2025 Form 10-Q16Wisconsin Electric Power Company

On our balance sheets, we classify derivative assets and liabilities as current or long-term based on the maturities of the