At December 31, 2017 and 2016, our regulated utility operations had recorded the following regulatory assets and liabilities included in our consolidated balance sheets. These assets and liabilities will be recognized as revenues and expenses in future periods as they are reflected in customers’ rates.



	As of December 31,
	2017		2016
(in thousands)
Regulatory Assets
Under-recovered purchased fuel and conservation cost recovery ⁽¹⁾	$	9,869	$	5,703
Under-recovered GRIP revenue ⁽²⁾	164		1,469
Deferred postretirement benefits ⁽³⁾	15,498		18,379
Deferred conversion and development costs ⁽¹⁾	11,735		8,051
Environmental regulatory assets and expenditures ⁽⁴⁾	3,222		3,694
Acquisition adjustment ⁽⁵⁾	39,992		41,864
Loss on reacquired debt ⁽⁶⁾	1,031		1,145
Other	4,994		4,192
Total Regulatory Assets	$	86,505	$	84,497


Regulatory Liabilities
Self-insurance ⁽⁷⁾	$	1,013	$	987
Over-recovered purchased fuel and conservation cost recovery ⁽¹⁾	2,048		808
Under-recovered GRIP revenue ⁽²⁾	2,245		—
Storm reserve ⁽⁷⁾	669		2,310
Accrued asset removal cost ⁽⁸⁾	40,948		39,826
Deferred income taxes due to rate change ⁽⁹⁾	98,492		—
Other	2,048		424
Total Regulatory Liabilities	$	147,463	$	44,355


⁽¹⁾	We are allowed to recover the asset or are required to pay the liability in rates. We do not earn an overall rate of return on these assets.

⁽²⁾

The Florida PSC allowed us to recover through a surcharge, capital and other program-related-costs, inclusive of an appropriate return on investment, associated with accelerating the replacement of qualifying distribution mains and services (defined as any material other than coated steel or plastic) in FPU’s natural gas distribution, Fort Meade and Chesapeake Utilities’ Florida Division. We are allowed to recover the asset or are required to pay the liability in rates related to GRIP.


⁽³⁾	The Florida PSC allowed FPU to treat as a regulatory asset the portion of the unrecognized costs pursuant to ASC Topic 715, Compensation - Retirement Benefits, related to its regulated operations. See Note 16, Employee Benefit Plans, for additional information.


⁽⁴⁾	All of our environmental expenditures incurred to date and our current estimate of future environmental expenditures have been approved by various PSCs for recovery. See Note 19, Environmental Commitments and Contingencies, for additional information on our environmental contingencies.

⁽⁵⁾

We are allowed to include the premiums paid in various natural gas utility acquisitions in Florida in our rate bases and recover them over a specific time period pursuant to the Florida PSC approvals. Included in these amounts are $1.3 million of the premium paid by FPU, $34.2 million of the premium paid by us in 2009, including the gross up of the amount for income tax, because it is not tax deductible, and $746,000 of the premium paid by FPU in 2010.


⁽⁶⁾	Gains and losses resulting from the reacquisition of long-term debt are amortized over future periods as adjustments to interest expense in accordance with established regulatory practice.


⁽⁷⁾	We have self-insurance and storm reserves in our Florida regulated energy operations that allow us to collect through rates amounts to be used against general claims, storm restoration costs and other losses as they are incurred.


⁽⁸⁾	See Note 1, Summary of Significant Accounting Policies, for additional information on our asset removal cost policies.