Company: WELPM
Filing Date: 2025-08-01
Form Type: 10-Q
Source: 0000107815-25-000204
Chunk: 115

Company: WISCONSIN ELECTRIC POWER CO
Filing Date: 2025-08-01
Form: 10-Q
Item: Part I, Item 8
Chunk 115
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 classified in their entirety based on the lowest level of input that is significant to the fair value measurement. We use a mid-market pricing convention (the mid-point price between bid and ask prices) as a practical measure for valuing certain derivative assets and liabilities. We primarily use a market approach for recurring fair value measurements and attempt to use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.When possible, we base the valuations of our derivative assets and liabilities on quoted prices for identical assets and liabilities in active markets. These valuations are classified in Level 1. The valuations of certain contracts not classified as Level 1 may be based on quoted market prices received from counterparties and/or observable inputs for similar instruments. Transactions valued using these inputs are classified in Level 2. Certain derivatives, such as FTRs, are categorized in Level 3 due to the significance of unobservable or internally-developed inputs. Our FTRs are valued using MISO auction prices. The following tables summarize our financial assets and liabilities that were accounted for at fair value on a recurring basis, categorized by level within the fair value hierarchy:June 30, 2025(in millions)Level 1Level 2Level 3TotalDerivative assets    Natural gas contracts$4.1 $1.7 $— $5.8 FTRs— — 9.9 9.9 Total derivative assets$4.1 $1.7 $9.9 $15.7 Derivative liabilitiesNatural gas contracts$2.5 $1.5 $— $4.0 

06/30/2025 Form 10-Q15Wisconsin Electric Power Company

December 31, 2024(in millions)Level 1Level 2Level 3TotalDerivative assets    Natural gas contracts$7.0 $3.5 $— $10.5 FTRs— — 2.9 2.9 Total derivative assets$7.0 $3.5 $2.9 $13.4 Derivative liabilitiesNatural gas contracts$0.6 $0.5 $— $1.1 The derivative assets and liabilities listed in the tables above include options, futures, physical commodity contracts, and other instruments used to manage market risks related to changes in commodity prices. They also include FTRs, which are used to manage