v3.26.1
Leases
 6 Months Ended
Jun. 30, 2026
Leases [Abstract]  
Leases Leases.    As a lessee, we have a relatively small portfolio of leases with the most significant being our 60% undivided interest in Scherer Unit No. 2 and railcar leases for the transportation of coal. We also have various other leases of minimal value.
We classify our four Scherer Unit No. 2 leases as finance leases and our railcar leases as operating leases. We have made an accounting policy election not to recognize right-of-use assets and lease liabilities that arise from short-term leases, leases having an initial term of 12 months or less, for any class of underlying asset. We recognize lease expense for short-term leases on a straight-line basis over the lease term. Lease expense recognized for our short-term leases during the three and six months ended June 30, 2026 and 2025 was insignificant.
Finance Leases
Three of our Scherer Unit No. 2 finance leases have lease terms through December 31, 2027, and one lease extends through June 30, 2031. At the end of the leases, we can elect at our sole discretion to:
•Renew the leases for a period of not less than one year and not more than five years at fair market value,
•Purchase the undivided interest at fair market value, or
•Redeliver the undivided interest to the lessors.
For rate-making purposes, we include the actual lease payments for our finance leases in our cost of service. The difference between lease payments and the aggregate of the amortization on the right-of-use asset and the interest on the finance lease obligation is recognized as a regulatory asset. Finance lease amortization is recorded in depreciation and amortization expense.
Operating Leases
Our railcar operating leases have terms that extend through November 30, 2028. At the end of the railcar operating leases, we can renew at terms mutually agreeable by us and the lessors, purchase the assets or return the assets to the lessors. We have additional operating leases including one for office equipment that has a term extending through November 30, 2029 and one for real property at one of our electric generating facilities that has a term extending through February 2042 with one renewal option for a 20 year term.
The exercise of renewal options for our finance and operating leases is at our sole discretion.
As all of our operating leases do not provide an implicit rate, we use an incremental borrowing rate based on the information available at the time new lease agreements are entered into or reassessed to determine the present value of lease payments.
We combine lease and non-lease components for all lease agreements.
ClassificationJune 30, 2026December 31, 2025
(dollars in thousands)
Right-of-use assets—Finance leases
Right-of-use assets$302,732 $302,732 
Less: Accumulated provision for depreciation(291,323)(288,688)
Total finance lease assets$11,409 $14,044 
Lease liabilities—Finance leases
Obligations under finance leases$15,295 $21,578 
Long-term debt and finance leases due within one year12,236 11,595 
Total finance lease liabilities$27,531 $33,173 
ClassificationJune 30, 2026December 31, 2025
(dollars in thousands)
Right-of-use assets—Operating leases
Electric plant in service, net$6,293 $7,357 
Total operating lease assets$6,293 $7,357 
Lease liabilities—Operating leases
Capitalization—Other$4,323 $5,284 
Other current liabilities1,970 2,073 
Total operating lease liabilities$6,293 $7,357 
Three Months Ended
Six Months Ended
Lease CostClassificationJune 30, 2026June 30, 2025June 30, 2026June 30, 2025
(dollars in thousands)
Finance lease cost:
Amortization of leased assetsDepreciation and amortization$3,194 $2,603 $5,798 $5,207 
Interest on lease liabilitiesInterest expense543 1,134 1,677 2,268 
Operating lease cost:
Inventory(1) & production expense
613 592 1,301 1,233 
    Total leased cost$4,350 $4,329 $8,776 $8,708 
(1) The majority of our operating lease costs relate to our railcar leases and such costs are added to the cost of our fossil-fuel inventories and are recognized in fuel expense as the inventories are consumed.
June 30, 2026December 31, 2025
Lease Term and Discount Rate:
Weighted-average remaining lease term (in years)
Finance leases3.213.55
Operating leases4.054.36
Weighted-average discount rate:
Finance leases11.05 %11.05 %
Operating leases6.12 %6.14 %
Six Months Ended June 30,
20262025
(dollars in thousands)
Other Information:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from finance leases$1,833 $2,408 
Operating cash flows from operating leases$1,301 $1,233 
Financing cash flows from finance leases$5,642 $5,067 
Right-of-use assets obtained in exchange for new operating lease liabilities$— $13 
Maturity analysis of our finance and operating lease liabilities as of June 30, 2026 is as follows:
(dollars in thousands)
Year Ending December 31,Finance LeasesOperating LeasesTotal
2026$7,475 $1,170 $8,645 
202714,949 2,190 17,139 
20283,052 2,080 5,132 
20293,052 643 3,695 
20303,052 389 3,441 
Thereafter1,527 649 2,176 
Total lease payments$33,107 $7,121 $40,228 
Less: imputed interest(5,576)(828)(6,404)
Present value of lease liabilities$27,531 $6,293 $33,824 
As a lessor, we primarily lease office space to several tenants within our headquarters building. Several of these tenants are related parties. We account for all of these lease agreements as operating leases.
Lease income recognized during the three and six months ended June 30, 2026 and 2025 was as follows:
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
(dollars in thousands)
Lease income$1,571 $1,312 $3,106 $2,596 
Leases Leases.    As a lessee, we have a relatively small portfolio of leases with the most significant being our 60% undivided interest in Scherer Unit No. 2 and railcar leases for the transportation of coal. We also have various other leases of minimal value.
We classify our four Scherer Unit No. 2 leases as finance leases and our railcar leases as operating leases. We have made an accounting policy election not to recognize right-of-use assets and lease liabilities that arise from short-term leases, leases having an initial term of 12 months or less, for any class of underlying asset. We recognize lease expense for short-term leases on a straight-line basis over the lease term. Lease expense recognized for our short-term leases during the three and six months ended June 30, 2026 and 2025 was insignificant.
Finance Leases
Three of our Scherer Unit No. 2 finance leases have lease terms through December 31, 2027, and one lease extends through June 30, 2031. At the end of the leases, we can elect at our sole discretion to:
•Renew the leases for a period of not less than one year and not more than five years at fair market value,
•Purchase the undivided interest at fair market value, or
•Redeliver the undivided interest to the lessors.
For rate-making purposes, we include the actual lease payments for our finance leases in our cost of service. The difference between lease payments and the aggregate of the amortization on the right-of-use asset and the interest on the finance lease obligation is recognized as a regulatory asset. Finance lease amortization is recorded in depreciation and amortization expense.
Operating Leases
Our railcar operating leases have terms that extend through November 30, 2028. At the end of the railcar operating leases, we can renew at terms mutually agreeable by us and the lessors, purchase the assets or return the assets to the lessors. We have additional operating leases including one for office equipment that has a term extending through November 30, 2029 and one for real property at one of our electric generating facilities that has a term extending through February 2042 with one renewal option for a 20 year term.
The exercise of renewal options for our finance and operating leases is at our sole discretion.
As all of our operating leases do not provide an implicit rate, we use an incremental borrowing rate based on the information available at the time new lease agreements are entered into or reassessed to determine the present value of lease payments.
We combine lease and non-lease components for all lease agreements.
ClassificationJune 30, 2026December 31, 2025
(dollars in thousands)
Right-of-use assets—Finance leases
Right-of-use assets$302,732 $302,732 
Less: Accumulated provision for depreciation(291,323)(288,688)
Total finance lease assets$11,409 $14,044 
Lease liabilities—Finance leases
Obligations under finance leases$15,295 $21,578 
Long-term debt and finance leases due within one year12,236 11,595 
Total finance lease liabilities$27,531 $33,173 
ClassificationJune 30, 2026December 31, 2025
(dollars in thousands)
Right-of-use assets—Operating leases
Electric plant in service, net$6,293 $7,357 
Total operating lease assets$6,293 $7,357 
Lease liabilities—Operating leases
Capitalization—Other$4,323 $5,284 
Other current liabilities1,970 2,073 
Total operating lease liabilities$6,293 $7,357 
Three Months Ended
Six Months Ended
Lease CostClassificationJune 30, 2026June 30, 2025June 30, 2026June 30, 2025
(dollars in thousands)
Finance lease cost:
Amortization of leased assetsDepreciation and amortization$3,194 $2,603 $5,798 $5,207 
Interest on lease liabilitiesInterest expense543 1,134 1,677 2,268 
Operating lease cost:
Inventory(1) & production expense
613 592 1,301 1,233 
    Total leased cost$4,350 $4,329 $8,776 $8,708 
(1) The majority of our operating lease costs relate to our railcar leases and such costs are added to the cost of our fossil-fuel inventories and are recognized in fuel expense as the inventories are consumed.
June 30, 2026December 31, 2025
Lease Term and Discount Rate:
Weighted-average remaining lease term (in years)
Finance leases3.213.55
Operating leases4.054.36
Weighted-average discount rate:
Finance leases11.05 %11.05 %
Operating leases6.12 %6.14 %
Six Months Ended June 30,
20262025
(dollars in thousands)
Other Information:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from finance leases$1,833 $2,408 
Operating cash flows from operating leases$1,301 $1,233 
Financing cash flows from finance leases$5,642 $5,067 
Right-of-use assets obtained in exchange for new operating lease liabilities$— $13 
Maturity analysis of our finance and operating lease liabilities as of June 30, 2026 is as follows:
(dollars in thousands)
Year Ending December 31,Finance LeasesOperating LeasesTotal
2026$7,475 $1,170 $8,645 
202714,949 2,190 17,139 
20283,052 2,080 5,132 
20293,052 643 3,695 
20303,052 389 3,441 
Thereafter1,527 649 2,176 
Total lease payments$33,107 $7,121 $40,228 
Less: imputed interest(5,576)(828)(6,404)
Present value of lease liabilities$27,531 $6,293 $33,824 
As a lessor, we primarily lease office space to several tenants within our headquarters building. Several of these tenants are related parties. We account for all of these lease agreements as operating leases.
Lease income recognized during the three and six months ended June 30, 2026 and 2025 was as follows:
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
(dollars in thousands)
Lease income$1,571 $1,312 $3,106 $2,596 
Leases Leases.    As a lessee, we have a relatively small portfolio of leases with the most significant being our 60% undivided interest in Scherer Unit No. 2 and railcar leases for the transportation of coal. We also have various other leases of minimal value.
We classify our four Scherer Unit No. 2 leases as finance leases and our railcar leases as operating leases. We have made an accounting policy election not to recognize right-of-use assets and lease liabilities that arise from short-term leases, leases having an initial term of 12 months or less, for any class of underlying asset. We recognize lease expense for short-term leases on a straight-line basis over the lease term. Lease expense recognized for our short-term leases during the three and six months ended June 30, 2026 and 2025 was insignificant.
Finance Leases
Three of our Scherer Unit No. 2 finance leases have lease terms through December 31, 2027, and one lease extends through June 30, 2031. At the end of the leases, we can elect at our sole discretion to:
•Renew the leases for a period of not less than one year and not more than five years at fair market value,
•Purchase the undivided interest at fair market value, or
•Redeliver the undivided interest to the lessors.
For rate-making purposes, we include the actual lease payments for our finance leases in our cost of service. The difference between lease payments and the aggregate of the amortization on the right-of-use asset and the interest on the finance lease obligation is recognized as a regulatory asset. Finance lease amortization is recorded in depreciation and amortization expense.
Operating Leases
Our railcar operating leases have terms that extend through November 30, 2028. At the end of the railcar operating leases, we can renew at terms mutually agreeable by us and the lessors, purchase the assets or return the assets to the lessors. We have additional operating leases including one for office equipment that has a term extending through November 30, 2029 and one for real property at one of our electric generating facilities that has a term extending through February 2042 with one renewal option for a 20 year term.
The exercise of renewal options for our finance and operating leases is at our sole discretion.
As all of our operating leases do not provide an implicit rate, we use an incremental borrowing rate based on the information available at the time new lease agreements are entered into or reassessed to determine the present value of lease payments.
We combine lease and non-lease components for all lease agreements.
ClassificationJune 30, 2026December 31, 2025
(dollars in thousands)
Right-of-use assets—Finance leases
Right-of-use assets$302,732 $302,732 
Less: Accumulated provision for depreciation(291,323)(288,688)
Total finance lease assets$11,409 $14,044 
Lease liabilities—Finance leases
Obligations under finance leases$15,295 $21,578 
Long-term debt and finance leases due within one year12,236 11,595 
Total finance lease liabilities$27,531 $33,173 
ClassificationJune 30, 2026December 31, 2025
(dollars in thousands)
Right-of-use assets—Operating leases
Electric plant in service, net$6,293 $7,357 
Total operating lease assets$6,293 $7,357 
Lease liabilities—Operating leases
Capitalization—Other$4,323 $5,284 
Other current liabilities1,970 2,073 
Total operating lease liabilities$6,293 $7,357 
Three Months Ended
Six Months Ended
Lease CostClassificationJune 30, 2026June 30, 2025June 30, 2026June 30, 2025
(dollars in thousands)
Finance lease cost:
Amortization of leased assetsDepreciation and amortization$3,194 $2,603 $5,798 $5,207 
Interest on lease liabilitiesInterest expense543 1,134 1,677 2,268 
Operating lease cost:
Inventory(1) & production expense
613 592 1,301 1,233 
    Total leased cost$4,350 $4,329 $8,776 $8,708 
(1) The majority of our operating lease costs relate to our railcar leases and such costs are added to the cost of our fossil-fuel inventories and are recognized in fuel expense as the inventories are consumed.
June 30, 2026December 31, 2025
Lease Term and Discount Rate:
Weighted-average remaining lease term (in years)
Finance leases3.213.55
Operating leases4.054.36
Weighted-average discount rate:
Finance leases11.05 %11.05 %
Operating leases6.12 %6.14 %
Six Months Ended June 30,
20262025
(dollars in thousands)
Other Information:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from finance leases$1,833 $2,408 
Operating cash flows from operating leases$1,301 $1,233 
Financing cash flows from finance leases$5,642 $5,067 
Right-of-use assets obtained in exchange for new operating lease liabilities$— $13 
Maturity analysis of our finance and operating lease liabilities as of June 30, 2026 is as follows:
(dollars in thousands)
Year Ending December 31,Finance LeasesOperating LeasesTotal
2026$7,475 $1,170 $8,645 
202714,949 2,190 17,139 
20283,052 2,080 5,132 
20293,052 643 3,695 
20303,052 389 3,441 
Thereafter1,527 649 2,176 
Total lease payments$33,107 $7,121 $40,228 
Less: imputed interest(5,576)(828)(6,404)
Present value of lease liabilities$27,531 $6,293 $33,824 
As a lessor, we primarily lease office space to several tenants within our headquarters building. Several of these tenants are related parties. We account for all of these lease agreements as operating leases.
Lease income recognized during the three and six months ended June 30, 2026 and 2025 was as follows:
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
(dollars in thousands)
Lease income$1,571 $1,312 $3,106 $2,596