REGULATORY ASSETS AND LIABILTIES

12 Months Ended

Dec. 31, 2021

REGULATORY ASSETS AND LIABILITIES

Regulatory assets and liabilities were comprised of the following as of December 31:


	Recovery Period	2021		2020
Regulatory Assets
Pension and retiree group health	Indefinitely	$	17,607	$	59,588
Property-related temporary differences (tax benefits flowed through to customers)	Indefinitely	130,565		120,365
Other accrued benefits	Indefinitely	23,280		21,692
Net WRAM and MCBA long-term accounts receivable	1-2 years	29,789		33,136
Asset retirement obligations, net	Indefinitely	22,935		21,110
IRMA long-term accounts receivable	1-2 years	9,032		14,705
Tank coating	10 years	13,680		14,018
Recoverable property losses	8 years	3,843		4,531
PCBA	1 year	21,500		19,647
Other components of net periodic benefit cost	Indefinitely	3,342		6,736
General district balancing account receivable	1 year	568		1,830
Customer assistance program (CAP) and Rate support fund (RSF) accounts receivable	1 year	5,991		5,310
Other regulatory assets	Various	3,560		2,708
Total Regulatory Assets		$	285,692	$	325,376
Regulatory Liabilities
Future tax benefits due to customers		$	135,027	$	151,011
Retiree group health		27,294		18,472
HCBA		9,687		5,320
Conservation program		7,206		3,837
Net WRAM and MCBA long-term payable		143		479
Other regulatory liabilities		1,071		1,599
Total Regulatory Liabilities		$	180,428	$	180,718

The Company's pension and retiree group health regulatory asset represents the unfunded obligation of the Company’s pension and postretirement benefit plans which the Company expects to recover from customers in the future for these plans. The retiree group health regulatory liability represents the over funded obligation of the Company’s postretirement benefit plans which the Company expects to refund to customers in the future. These plans are discussed in further detail in Note 12.

The PCBA regulatory asset and the HCBA regulatory liability represent incurred pension and healthcare costs that exceeded/was below the cost recovery in rates and is recoverable/refundable from/to customers. The other components of net periodic benefit cost regulatory asset are authorized by the Commissions and are probable for rate recovery through the capital program.

The property-related temporary differences are primarily due to: (i) the difference between book and federal income tax depreciation on utility plant that was placed in service before the regulatory Commissions adopted normalization for rate making purposes; and (ii) certain (state) deferred taxes for which flow through accounting continues to be applied to originating deferred taxes. The regulatory asset will be recovered in rates in future periods as the tax effects of the temporary differences previously flowed-through to customers reverse.

Other accrued benefits are accrued benefits for vacation, self-insured workers' compensation, and directors' retirement benefits. The net WRAM and MCBA long-term accounts receivable is the under-collected portion of recorded revenues that are not expected to be collected from customers within 12 months. The IRMA long-term accounts receivables is the additional amount the Company would have billed customers in 2020 and 2021 had the 2018 GRC been approved on time.

The asset retirement obligation regulatory asset represents the difference between costs associated with asset retirement obligations and amounts collected in rates. Tank coating represents the maintenance costs for tank coating projects that are recoverable from customers.

The CAP (formerly known as Low-income Rate Assistance) and RSF are two programs offered by Cal Water that assist qualifying customers with their monthly water bill. The programs are funded by the customers who do not qualify for the assistance. The CAP and RSF regulatory assets represent the amounts due from customers to fund the CAP and RSF credits that were provided to assist qualifying customers.

The future tax benefits due to customers primarily resulted from federal tax law changes enacted by the federal Tax Cuts and Jobs Act (TCJA) on December 22, 2017. The TCJA reduced the federal corporate income tax rate from 35 percent to 21 percent beginning on January 1, 2018, and GAAP requires the Company to re-measure all existing deferred income tax assets and liabilities to reflect the reduction in the federal tax rate on the enactment date.

The conservation program regulatory liability is for incurred conservation costs that were below the cost recovery in rates and is refundable to customers.

Short-term regulatory assets and liabilities are excluded from the above table. The short-term regulatory assets as of December 31, 2021 and 2020 were $78.6 million and $96.2 million, respectively. The short-term regulatory assets, as of December 31, 2021, and 2020 primarily consisted of net WRAM and MCBA, IRMA, and PCBA receivables.

The short-term portion of regulatory liabilities as of December 31, 2021 and 2020 were $17.5 million and $34.6 million, respectively. The short-term regulatory liabilities as of December 31, 2021, primarily consist of TCJA and HCBA liabilities. The short-term regulatory liabilities as of December 31, 2020, primarily consist of TCJA liabilities, HCBA liabilities, and TCP settlement proceeds.