Regulatory Matters:

3 Months Ended

Mar. 31, 2020

Regulatory Assets and Liabilities Disclosure [Abstract]

We had the following regulatory assets and liabilities (in thousands) as of:



	March 31, 2020			December 31, 2019
Regulatory assets
Deferred energy and fuel cost adjustments ^(a)	$	35,687		$	34,088
Deferred gas cost adjustments ^(a)	—			1,540
Gas price derivatives ^(a)	1,302			3,328
Deferred taxes on AFUDC^(b)	7,739			7,790
Employee benefit plans ^(c)	117,150			115,900
Environmental^(a)	1,439			1,454
Loss on reacquired debt^(a)	24,299			24,777
Renewable energy standard adjustment ^(a)	340			1,622
Deferred taxes on flow through accounting^(c)	44,589			41,220
Decommissioning costs ^(b)	10,248			10,670
Gas supply contract termination ^(a)	7,007			8,485
Other regulatory assets^(a)	22,429			20,470
Total regulatory assets	272,229			271,344
Less current regulatory assets	(49,415		)	(43,282		)
Regulatory assets, non-current	$	222,814		$	228,062

Regulatory liabilities
Deferred energy and gas costs^(a)	$	40,002		$	17,278
Employee benefit plan costs and related deferred taxes^(c)	41,518			43,349
Cost of removal^(a)	170,954			166,727
Excess deferred income taxes ^(c)	283,690			285,438
TCJA revenue reserve	5,147			3,418
Other regulatory liabilities^(c)	17,183			20,442
Total regulatory liabilities	558,494			536,652
Less current regulatory liabilities	(54,345		)	(33,507		)
Regulatory liabilities, non-current	$	504,149		$	503,145

__________


(a)	Recovery of costs, but we are not allowed a rate of return.


(b)	In addition to recovery of costs, we are allowed a rate of return.


(c)	In addition to recovery or repayment of costs, we are allowed a return on a portion of this amount or a reduction in rate base.

Regulatory Activity

Except as discussed below, there have been no other significant changes to our Regulatory Matters from those previously disclosed in Note 13 of the Notes to the Consolidated Financial Statements in our 2019 Annual Report on Form 10-K.

Black Hills Wyoming and Wyoming Electric

Wygen 1 FERC Filing

Black Hills Wyoming has a PPA with Wyoming Electric expiring on December 31, 2022, which provides 60 MW of unit-contingent capacity and energy from Black Hills Wyoming’s Wygen I facility. On August 2, 2019, Black Hills Wyoming and Wyoming Electric jointly filed a request with FERC for approval of a new 60 MW PPA. The agreement would fulfill Wyoming Electric’s capacity need at the expiration of the current agreement on December 31, 2022. If approved, Black Hills Wyoming will continue to deliver 60 MW of energy to Wyoming Electric from its Wygen I power plant starting January 1, 2023, and continuing for an additional 20 years to December 31, 2042. On February 21, 2020, the FERC set this filing for hearing. However, the hearing has been placed in abeyance pending a FERC monitored settlement process. Settlement negotiations are ongoing among all parties. Any settlement would require FERC approval. To the extent the parties are unable to reach agreement, the next step in FERC’s process would be to set the matter for hearing. We will continue to evaluate our options to fulfill Wyoming Electric’s 60 MW capacity need.

Colorado Gas

Jurisdictional Consolidation and Rate Review

On February 1, 2019, Colorado Gas filed a rate review with the CPUC requesting approval to consolidate rates, tariffs, and services of its two existing gas distribution territories. The rate review requested $2.5 million in new revenue to recover investments in safety, reliability and system integrity. Colorado Gas also requested a new rider mechanism to recover future safety and integrity investments in its system. On December 27, 2019, the ALJ issued a recommended decision denying the company’s plan to consolidate rate territories and rider mechanism and also recommended a rate decrease. On April 14, 2020, the CPUC deliberated on the ALJ’s recommended decision and filed exceptions to that decision. The CPUC essentially accepted the ALJ’s recommended decisions, except for return on equity, which they lowered from 9.5% to 9.2%. A final order and new rates are anticipated to be effective in the second quarter of 2020.