
9.	REGULATORY ASSETS AND LIABILITIES

The table below presents a summary of regulatory assets, net of amortization, and liabilities for the periods indicated:



		December 31, 2014
	Remaining Recovery Period	Current			Noncurrent			Total
		(Thousands of dollars)
Under-recovered purchased-gas costs	1 year	$	28,712		$	—		$	28,712
Pension and other postretirement benefit costs	See Note 12	18,108			466,684			484,792
Reacquired debt costs	13 years	812			9,730			10,542
Other	1 to 24 years	2,561			2,309			4,870
Total regulatory assets, net of amortization		50,193			478,723			528,916
Accumulated removal costs (a)	up to 50 years	—			(15,451		)	(15,451		)
Weather normalization	1 year	(16,516		)	—			(16,516		)
Over-recovered purchased-gas costs	1 year	(13,055		)	—			(13,055		)
Ad valorem tax	1 year	(2,896		)	—			(2,896		)
Total regulatory liabilities		(32,467		)	(15,451		)	(47,918		)
Net regulatory assets and liabilities		$	17,726		$	463,272		$	480,998

(a) Included in other deferred credits in our balance sheets.



		December 31, 2013
	Remaining Recovery Period	Current			Noncurrent			Total
		(Thousands of dollars)
Under-recovered purchased-gas costs	1 year	$	12,393		$	—		$	12,393
Pension and other postretirement benefit costs	See Note 12	298			9,556			9,854
Reacquired debt costs	14 years	812			10,541			11,353
Other	1 to 25 years	8,154			3,725			11,879
Total regulatory assets, net of amortization		21,657			23,822			45,479
Accumulated removal costs (a)	up to 50 years	—			(21,375		)	(21,375		)
Over-recovered purchased-gas costs	1 year	(17,796		)	—			(17,796		)
Total regulatory liabilities		(17,796		)	(21,375		)	(39,171		)
Net regulatory assets and liabilities		$	3,861		$	2,447		$	6,308

(a) Included in other deferred credits in our balance sheets.

Regulatory assets on our balance sheets, as authorized by the various regulatory commissions, are probable of recovery. Base rates are designed to provide a recovery of cost during the period rates are in effect but do not generally provide for a return on investment for amounts we have deferred as regulatory assets. All of our regulatory assets recoverable through base rates are subject to review by the respective regulatory commissions during future rate proceedings. We are not aware of any evidence that these costs will not be recoverable through either rate riders or base rates, and we believe that we will be able to recover such costs, consistent with our historical recoveries.

Unrecovered purchased-gas costs represents the costs that have been over- or under-recovered from customers through the purchased-gas cost adjustment mechanisms and includes natural gas utilized in our operations, premiums paid and any cash settlements received from our purchased natural gas call options.

We amortize reacquired debt costs in accordance with the accounting guidelines prescribed by the OCC and KCC.

In December 2013, the KCC approved a settlement agreement between ONEOK, the staff of the KCC, and the Citizens’ Utility Ratepayer Board that authorized the transfer of ONEOK’s Kansas Gas Service natural gas distribution assets to us. As a result, Kansas Gas Service expensed certain transition costs associated with ONEOK’s acquisition of Kansas Gas Service in 1997 that previously had been recorded as a regulatory asset and amortized and recovered in rates over a 40-year period. As such, we recorded a noncash charge to income of approximately $10.2 million before taxes during 2013 in depreciation and amortization.

Weather normalization represents revenue over- or under-recovered through the weather normalization adjustment rider in Kansas. This amount is deferred as a regulatory asset or liability for a 12-month period. Kansas Gas Service then applies an adjustment to the customers’ bills for 12 months to refund the over-collected revenue or bill the under-collected revenue.

Ad valorem tax represents an increase or decrease in Kansas Gas Service’s taxes above or below the amount approved in a rate case. This amount is deferred as a regulatory asset or liability for a 12-month period. Kansas Gas Service then applies an adjustment to the customers’ bills for 12 months to refund the over-collected revenue or bill the under-collected revenue.

Recovery through rates resulted in amortization of regulatory assets of approximately $6.4 million for the year ended December 31, 2014. Amortization of regulatory assets of approximately $32.0 million for the year ended December 31, 2013, included amounts recovered through rates totaling $21.8 million and $10.2 million related to certain transition costs as described above. Recovery through rates resulted in amortization of regulatory assets of approximately $18.3 million for the year ended December 31, 2012.

We collect, through our rates, the estimated costs of removal on certain regulated properties through depreciation expense, with a corresponding credit to accumulated depreciation and amortization. These removal costs are nonlegal obligations; however, the amounts collected that are in excess of these nonlegal asset-removal costs incurred are accounted for as a regulatory liability. We have made an estimate of our regulatory liability using current rates since the last general rate order in each of our jurisdictions. We record the estimated nonlegal asset removal obligation in noncurrent liabilities in other deferred credits on our balance sheets.