Regulatory assets and liabilities are as follows (dollars in thousands):


	March 31,		December 31,
	2020		2019
Regulatory assets
Deferred income tax expense (1)	$	33,970	$	58,937
Deferred prepaid lease expense – Springerville Unit 3 Lease (2)		83,142		83,714
Goodwill – J.M. Shafer (3)		48,433		49,145
Goodwill – Colowyo Coal (4)		36,936		37,194
Deferred debt prepayment transaction costs (5)		138,774		140,931
Deferred Holcomb expansion impairment loss (6)		92,325		93,494
Unrecovered plant (7)		299,204		33,864
Total regulatory assets		732,784		497,279

Regulatory liabilities
Interest rate swap - realized gain (8)		3,626		3,744
Deferred revenues (9)		75,853		75,853
Membership withdrawal (10)		42,572		42,572
Total regulatory liabilities		122,051		122,169
Net regulatory asset	$	610,733	$	375,110

(1)

A regulatory asset or liability associated with deferred income taxes generally represents the future increase or decrease in income taxes payable that will be received or settled through future rate revenues.

(2)

Represents deferral of the loss on acquisition related to the Springerville Generating Station Unit 3 (“Springerville Unit 3”) prepaid lease expense upon acquiring a controlling interest in the Springerville Unit 3 Partnership LP (“Springerville Partnership”) in 2009. The regulatory asset for the deferred prepaid lease expense is being amortized to depreciation, amortization and depletion expense in the amount of $2.3 million annually through the 47-year period ending in 2056 and recovered from our Utility Members through rates.

(3)

Represents goodwill related to our acquisition of Thermo Cogeneration Partnership, LP in December 2011. Goodwill is being amortized to depreciation, amortization and depletion expense in the amount of $2.8 million annually through the 25-year period ending in 2036 and recovered from our Utility Members through rates.

(4)

Represents goodwill related to our acquisition of Colowyo Coal Company LP (“Colowyo Coal”) in December 2011. Goodwill is being amortized to depreciation, amortization and depletion expense in the amount of $1.0 million annually through the 44-year period ending in 2056 and recovered from our Utility Members through rates.

(5)

Represents transaction costs that we incurred related to the prepayment of our long-term debt in 2014. These costs are being amortized to depreciation, amortization and depletion expense in the amount of $8.6 million annually over the 21.4-year period ending in 2036 and recovered from our Utility Members through rates.

(6)

Represents deferral of the impairment loss related to development costs, including costs for the option to purchase development rights for the expansion of the Holcomb Generating Station. Beginning January 2020, the deferred impairment loss is being amortized to other operating expenses in the amount of $4.7 million annually over the 20-year period ending in 2039 and recovered from our Utility Members through rates.

(7)

Represents deferral of the impairment losses related to the early retirement of the Nucla and Escalante Generating Stations. In July 2019, our Board took action for the early retirement of the Nucla Generating Station and the deferral of any impairment loss in accordance with accounting for rate regulation. In conjunction with the early retirement of the Nucla Generating Station, we recognized an impairment loss of $37.1 million during the third quarter of 2019. On September 19, 2019, the Nucla Generating Station was officially retired from service. The deferred impairment loss for Nucla Generating Station is being amortized to depreciation, amortization and depletion expense over the 3.3-year period ending in December 2022 and recovered from our Utility Members through rates. In January 2020, our Board approved the early retirement of the Escalante Generating Station and the deferral of any impairment loss in accordance with accounting for rate regulation. In conjunction with the early retirement, we recognized an impairment loss of $268.2 million during the first quarter of 2020. The deferred impairment loss for Escalante Generating Station will be amortized to depreciation, amortization and depletion expense beginning in 2021 through the end of 2045, which was the depreciable life of Escalante Generating Station, and is expected to be recovered from our Utility Members through rates. In May 2020, we filed an accounting filing with FERC to request regulatory treatment for the Escalante Generating Station impaired loss and believe it is probable that FERC will allow us to recover the costs in our rates. If required, we will make a Section 205 filing under the Federal Power Act in connection with any future rate change resulting from the decommission of the Escalante Generating Station. The annual amortization is expected to approximate the former annual Escalante Generating Station depreciation for the remaining life of the asset.

(8)

Represents deferral of a realized gain of $4.6 million related to the October 2017 settlement of a forward starting interest rate swap. This realized gain was deferred as a regulatory liability and is being amortized to interest expense over the 12-year term of the First Mortgage Obligations, Series 2017A and refunded to Utility Members through reduced rates when recognized in future periods.

(9)

Represents deferral of the recognition of non-member electric sales revenues. These deferred non-member electric sales revenues will be refunded to Utility Members through reduced rates when recognized in non-member electric sales revenue in future periods.

Represents the deferral of the recognition of other income recorded in connection with the withdrawal of a former Utility Member from membership in us. This deferred membership withdrawal income will be refunded to Utility Members through reduced rates when recognized in other income in future periods.