NOTE 5 – OTHER DEFERRED CHARGES

We make expenditures for preliminary surveys and investigations for the purpose of determining the feasibility of contemplated generation and transmission projects. If construction results, the preliminary survey and investigation expenditures will be reclassified to electric plant ‑ construction work in progress. If the work is abandoned, the related preliminary survey and investigation expenditures will be charged to the appropriate operating expense account or the expense could be deferred as a regulatory asset to be recovered from our Members in rates subject to approval by our Board, which has budgetary and rate-setting authority. Preliminary surveys and investigations was primarily comprised of expenditures for the Holcomb Expansion of $91.3 million as of December 31, 2016. There was no balance for the Holcomb Expansion as of September 30, 2017 as a result of our determination during the second quarter of 2017 that the costs incurred for the Holcomb Expansion were impaired. The impairment loss was deferred at the discretion of our Board. See Note 2 – Accounting for Rate Regulation.

We make advance payments to the operating agents of jointly owned facilities to fund our share of costs expected to be incurred under each project including MBPP – Laramie River Station, Yampa Project – Craig Generating Station Units 1 and 2, and San Juan Project – San Juan Unit 3. We also make advance payments to the operating agent of Springerville Unit 3.

In 2016, we entered into forward starting interest rate swaps to hedge a portion of our future long-term debt interest rate exposure. The unrealized gain on these interest rate swaps, as of September 30, 2017, was deferred in accordance with the accounting requirements related to regulated operations. See Note 2 – Accounting for Rate Regulation.

Other deferred charges are as follows (dollars in thousands):


	September 30,		December 31,
	2017		2016
Preliminary surveys and investigations	$	20,135	$	111,592
Advances to operating agents of jointly owned facilities		12,238		11,871
Interest rate swaps		9,056		12,140
Other		3,715		3,775
Total other deferred charges	$	45,144	$	139,378