XML 39 R27.htm IDEA: XBRL DOCUMENT v3.24.1.u1
ACCOUNTING FOR RATE REGULATION (Tables)
 3 Months Ended
Mar. 31, 2024
Regulatory Assets and Liabilities Disclosure [Abstract]  
Schedule of Regulatory Assets and Liabilities
Regulatory assets and liabilities are as follows (dollars in thousands):
March 31,
2024		December 31,
2023
Regulatory assets
Deferred income tax expense (1)$15,223 $15,223 
Deferred prepaid lease expense – Springerville Unit 3 Lease (2)73,979 74,551 
Acquisition costs – J.M. Shafer (3)37,037 37,749 
Acquisition costs – Colowyo Coal (4)32,803 33,062 
Deferred debt prepayment transaction costs (5)104,260 106,417 
Deferred Holcomb expansion impairment loss (6)73,626 74,795 
New Horizon Mine environmental obligation (7)44,869 44,869 
Unrecovered plant (8)529,621 532,817 
Total regulatory assets911,418 919,483 
Regulatory liabilities
Interest rate swap - realized gain (9) and other1,736 1,854 
Membership withdrawal (10)463 463 
Total regulatory liabilities2,199 2,317 
Net regulatory asset$909,219 $917,166 
(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 acquisition costs related to our acquisition of an entity that owned J.M. Shafer Generating Station in December 2011. Acquisition costs are 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 acquisition costs related to our acquisition of Colowyo Coal Company LP (“Colowyo Coal”) in December 2011. Acquisition costs are 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. The regulatory asset for the deferred impairment loss is being amortized to depreciation, amortization and depletion expense 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 $44.9 million of New Horizon Mine environmental obligation expense that was recognized as a regulatory item in 2023. The regulatory asset for the deferred environmental obligation expense will be amortized to expense in the amount of $1.8 million annually over 25 years.
(8)Represents deferral of the impairment losses and other closure costs related to the early retirement of the Escalante, Rifle and Craig Generating Station Units 2 and 3. The deferred impairment loss for Escalante Generating Station is being amortized to depreciation, amortization and depletion expense in the amount of $12.2 million annually over the 25-year period ending in December 2045, which was the depreciable life of the Escalante Generating Station, and recovered from our Utility Members through rates. The annual amortization approximates the former annual Escalante Generating Station depreciation for the remaining life of the asset. The deferred impairment loss for Rifle Generating Station is being amortized to depreciation, amortization and depletion expense in the amount of $0.6 million annually through December 2028, which was the depreciable life of the Rifle Generating Station, and recovered from our Utility Members in rates. We recognized the early retirement of Craig Generating Station Units 2 and 3 and concluded the impairment of incurred costs is probable of recovery through future rates. We recognized an impairment loss of $261.6 million and deferred the loss in accordance with accounting for rate regulation. The deferred impairment loss will be amortized to depreciation, amortization and depletion expense beginning in October 2028 through 2039 for Craig Generating Station Unit 2 and
January 2030 through 2043 for Craig Generating Station Unit 3. These amortization periods are the depreciable lives of Craig Generating Station Unit 2 and 3. The annual amortization is expected to approximate the former annual Craig Generation Station Unit 2 and 3 depreciation for the remaining life of the asset.
(9)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.
(10) Represents the remaining balance of the deferred recognition of other operating revenues related to the withdrawal of former Utility Members from membership in us. The deferred membership withdrawal income will be refunded to Utility Members through reduced rates when recognized in operating revenues in future periods with the oldest vintage year used first.