Regulatory Assets and Liabilities

12 Months Ended

Dec. 31, 2021

Regulatory Assets and Liabilities Disclosure [Abstract]

Regulatory Assets and Liabilities

Regulatory assets and liabilities are created for amounts that regulators may allow to be collected or may require to be paid back to customers in future electric and natural gas rates. NSP-Minnesota would be required to recognize the write-off of regulatory assets and liabilities in net income or other comprehensive income if changes in the utility industry no longer allow for the application of regulatory accounting guidance under GAAP.

Components of regulatory assets:

(Millions of Dollars)	See Note(s)	Remaining Amortization Period	Dec. 31, 2021				Dec. 31, 2020
Regulatory Assets			Current		Noncurrent		Current		Noncurrent
Pension and retiree medical obligations	9	Various	$	24	$	301	$	26	$	364
Deferred natural gas and electric energy/fuel costs		One to five years	138		190		8		18
Recoverable deferred taxes on AFUDC		Plant lives	—		114		—		113
Excess deferred taxes — TCJA	7	Various	10		113		10		122
Sales true-up and revenue decoupling		One to two years	33		56		101		28
Benson biomass PPA termination and asset purchase		Eight years	10		55		10		65
PI extended power uprate		13 years	4		46		3		49
Contract valuation adjustments (a)	1, 8	Term of related contract	18		34		16		48
Purchased power contracts costs		Term of related contract	6		27		4		32
Conservation programs (b)	1	One to two years	7		22		14		23
Laurentian biomass PPA termination		Two years	18		18		18		36
Nuclear refueling outage costs	1	One to two years	37		16		28		10
Losses on reacquired debt		Term of related debt	1		11		1		12
Environmental remediation costs	1, 10	Pending future rate cases	—		5		1		9
Renewable resources and environmental initiatives		One to two years	170		3		129		1
State commission adjustments		Plant lives	—		3		—		3
Gas pipeline inspection and remediation costs		One to two years	33		—		26		—
Net AROs (c)	1, 10	Various	—		(316)		—		(32)
Other		Various	18		20		16		23
Total regulatory assets			$	527	$	718	$	411	$	924

(a)Includes the fair value of certain long-term PPAs used to meet energy capacity requirements and valuation adjustments on natural gas commodity purchases.

(b)Includes costs for conservation programs, as well as incentives allowed in certain jurisdictions.

(c)Includes amounts recorded for future recovery of AROs, less amounts recovered through nuclear decommissioning accruals and gains from decommissioning investments.

Components of regulatory liabilities:

(Millions of Dollars)	See Note(s)	Remaining Amortization Period	Dec. 31, 2021				Dec. 31, 2020
Regulatory Liabilities			Current		Noncurrent		Current		Noncurrent
Deferred income tax adjustments and TCJA refunds (a)	7	Various	$	9	$	1,256	$	9	$	1,326
Plant removal costs	1, 10	Various	—		613		—		544
Renewable resources and environmental initiatives		Various	1		10		5		—
ITC deferrals	1	Various	—		7		—		8
Contract valuation adjustments (b)	1, 8	Less than one year	29		—		12		—
DOE Settlement		Less than one year	14		—		11		—
Deferred natural gas and electric energy/fuel costs		Less than one year	14		—		8		—
Other		Various	50		41		78		18
Total regulatory liabilities (c)			$	117	$	1,927	$	123	$	1,896

(a)Includes the revaluation of recoverable/regulated plant accumulated deferred income taxes and revaluation impact of non-plant accumulated deferred income taxes due to the TCJA.

(b)Includes the fair value of certain long-term PPAs used to meet energy capacity requirements and valuation adjustments on natural gas commodity purchases.

(c)Revenue subject to refund of $15 million and $17 million for 2021 and 2020, respectively, is included in other current liabilities.

At Dec. 31, 2021 and 2020, NSP-Minnesota’s regulatory assets not earning a return primarily included the unfunded portion of pension and retiree medical obligations and net AROs. In addition, regulatory assets included $691 million and $399 million at Dec. 31, 2021 and 2020, respectively, of past expenditures not earning a return. Amounts are related to funded pension obligations, sales true-up and revenue decoupling, purchased natural gas and electric energy costs (including those related to Winter Storm Uri), various renewable resources and certain environmental initiatives.