Leases (Tables)

12 Months Ended

Dec. 31, 2024

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)	2024			2023			2022
Finance lease expense
Amortization of right of use assets (1)	$	88.5		$	77.5		$	74.2
Interest on lease liabilities (2)	331.2			329.5			334.3
Operating lease expense (3)	2.0			1.6			1.8
Total lease expense	$	421.7		$	408.6		$	410.3

Other information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for finance leases	$	331.2		$	329.5		$	334.3
Operating cash flows for operating leases	2.0			1.6			1.8
Financing cash flows for finance leases	87.9			77.0			73.6

Non-cash activities:
Right of use assets obtained in exchange for finance lease liabilities (4)	$	87.1		$	136.5		$	60.0
Right of use assets obtained in exchange for operating lease liabilities	2.6			2.3			—

Weighted-average remaining lease term – finance leases	16.4 years			16.2 years			16.5 years
Weighted-average remaining lease term – operating leases	29.6 years			24.9 years			27.0 years

Weighted-average discount rate – finance leases (5)	13.0		%	13.4		%	13.6		%
Weighted average discount rate – operating leases (5)	5.2		%	4.8		%	4.5		%

(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 lease expense was included as a component of other operation and maintenance expense.

(4) Amounts are net of any reductions to right of use assets and finance lease liabilities resulting from remeasurements.

(5) For the PWGS and ERGS finance leases, the rate implicit in the lease was readily determinable. For all of our other operating and finance leases, we used an estimate of 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 assets and obligations

The following table summarizes our finance and operating lease right of use assets and obligations at December 31:


(in millions)	2024		2023		Balance Sheet Location
Right of use assets
Operating lease right of use assets, net	$	12.2	$	10.2	Other long-term assets
Finance lease right of use assets, net
PWGS	$	239.1	$	268.6
ERGS	1,286.3		1,362.0
Land leases – utility solar generation	162.5		92.4
Total finance lease right of use assets, net (1)	$	1,687.9	$	1,723.0	Property, plant, and equipment, net

Lease obligations
Current operating lease liabilities	$	0.8	$	0.8	Other current liabilities
Long-term operating lease liabilities	$	11.5	$	9.4	Other long-term liabilities
Current finance lease liabilities
PWGS	$	48.5	$	42.9
ERGS	50.8		44.9
Total current finance lease liabilities	$	99.3	$	87.8	Current portion of finance lease obligations
Long-term finance lease liabilities
PWGS	$	431.3	$	474.8
ERGS	2,134.0		2,177.8
Land leases – utility solar generation	177.6		99.6
Total long-term finance lease liabilities	$	2,742.9	$	2,752.2	Finance lease obligations

(1) Amounts are net of accumulated amortization of $1,603.9 million and $1,483.8 million at December 31, 2024 and 2023, respectively.

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, 2024, were as follows:


(in millions)	Total Operating Leases		PWGS		ERGS		Land Leases - Utility Solar Generation		Total Finance Leases
2025	$	1.3	$	103.6	$	314.9	$	5.3	$	423.8
2026	1.1		103.5		314.9		5.5		423.9
2027	0.9		103.3		314.8		8.8		426.9
2028	0.7		103.3		314.7		9.0		427.0
2029	0.7		103.3		314.5		9.2		427.0
Thereafter	21.3		201.7		3,311.3		694.2		4,207.2
Total minimum lease payments	26.0		718.7		4,885.1		732.0		6,335.8
Less: Interest	(13.7)		(238.9)		(2,700.3)		(554.4)		(3,493.6)
Present value of minimum lease payments	12.3		479.8		2,184.8		177.6		2,842.2
Less: Short-term lease liabilities	(0.8)		(48.5)		(50.8)		—		(99.3)
Long-term lease liabilities	$	11.5	$	431.3	$	2,134.0	$	177.6	$	2,742.9

WISCONSIN ELECTRIC POWER CO 10-K