Regulatory Assets and Liabilities

12 Months Ended

Dec. 31, 2019

Regulatory Assets and Liabilities Disclosure [Abstract]

The following regulatory assets were reflected on our balance sheets as of December 31:



(in millions)	2019		2018		See Note
Regulatory assets ^{(1) (2)}
Finance and capital leases	$	930.5	$	869.3	12
Plant retirements ⁽³⁾	788.8		754.1		6
Pension and OPEB costs ⁽⁴⁾	459.4		490.6		16
Income tax related items ⁽⁵⁾	403.2		317.9		13
SSR ⁽⁶⁾	151.5		316.7		21
Electric transmission costs	—		57.8		21
Other, net	21.8		95.9
Total regulatory assets	$	2,755.2	$	2,902.3

Balance sheet presentation
Other current assets	$	—	$	0.1
Regulatory assets	2,755.2		2,902.2
Total regulatory assets	$	2,755.2	$	2,902.3


⁽¹⁾	Based on prior and current rate treatment, we believe it is probable that we will continue to recover from customers the regulatory assets in this table.

⁽²⁾

As of December 31, 2019, we had $10.0 million of regulatory assets not earning a return, $28.6 million of regulatory assets earning a return based on short-term interest rates, and $151.5 million of regulatory assets earning a return based on long-term interest rates. The regulatory assets not earning a return relate to certain environmental remediation costs, the recovery of which depends on the timing of the actual expenditures. The other regulatory assets in the table either earn a return at our weighted average cost of capital or the cash has not yet been expended, in which case the regulatory assets are offset by liabilities.


⁽³⁾	In accordance with our rate order issued by the PSCW in December 2019, amounts previously collected from customers for the future removal of our recently retired plants were used to reduce our unrecovered plant balances during December 2019. Any additional removal costs that we incur will increase our plant retirement regulatory assets.


⁽⁴⁾	Primarily represents the unrecognized future pension and OPEB costs related to our defined benefit pension and OPEB plans. We are authorized recovery of these regulatory assets over the average remaining service life of each plan.


⁽⁵⁾	For information on the flow through of tax repairs and the regulatory treatment of the impacts of the Tax Legislation, see Note 21, Regulatory Environment.


⁽⁶⁾	As a result of the rate order we received from the PSCW in December 2019, the regulatory liability related to our mines deferral was offset against our SSR regulatory asset during December 2019. The rate order also authorized recovery of our SSR regulatory asset over a 15-year period that began on January 1, 2020.

The following regulatory liabilities were reflected on our balance sheets as of December 31:



(in millions)	2019		2018		See Note
Regulatory liabilities
Income tax related items ⁽¹⁾	$	888.1	$	1,024.8	13
Removal costs⁽²⁾	654.7		748.1
Pension and OPEB benefits ⁽³⁾	120.4		74.7		16
Electric transmission costs ⁽⁴⁾	38.6		—		21
Uncollectible expense ⁽⁵⁾	28.8		16.4		1(d)
Energy efficiency programs ⁽⁶⁾	15.8		13.5
Mines deferral ⁽⁷⁾	—		120.8
Other, net	9.8		15.9
Total regulatory liabilities	$	1,756.2	$	2,014.2

Balance sheet presentation
Other current liabilities	$	12.0	$	11.9
Regulatory liabilities	1,744.2		2,002.3
Total regulatory liabilities	$	1,756.2	$	2,014.2


⁽¹⁾	For information on the regulatory treatment of the impacts of the Tax Legislation, see Note 21, Regulatory Environment.


⁽²⁾	Represents amounts collected from customers to cover the future cost of property, plant, and equipment removals that are not legally required. Legal obligations related to the removal of property, plant, and equipment are recorded as AROs. See Note 7, Asset Retirement Obligations, for more information on our legal obligations.


⁽³⁾	Primarily represents the unrecognized future pension and OPEB benefits related to our defined benefit pension and OPEB plans. We will amortize these regulatory liabilities into net periodic benefit cost over the average remaining service life of each plan.

⁽⁴⁾

Based on orders received from the PSCW, we were required to apply the refunds due to customers from our earnings sharing mechanism to our electric transmission escrow through 2019. As a result, $38.6 million of our earnings sharing refunds were reflected in our electric transmission regulatory liability at December 31, 2019, and $37.2 million of our earnings sharing refunds were netted against our electric transmission regulatory asset at December 31, 2018.


⁽⁵⁾	Represents amounts refundable to customers related to our uncollectible expense tracking mechanism. This mechanism allows us to recover or refund the difference between actual uncollectible write-offs and the amounts recovered in rates.


⁽⁶⁾	Represents amounts refundable to customers related to programs designed to meet energy efficiency standards.

⁽⁷⁾

Represents the deferral of revenues less the associated cost of sales related to Tilden, which were not included in the PSCW's 2015 rate order. As a result of the rate order we received from the PSCW in December 2019, this regulatory liability was offset against our SSR regulatory asset during December 2019.