Regulatory Assets and Liabilities

12 Months Ended

Dec. 31, 2023

Regulatory Assets and Liabilities Disclosure [Abstract]

The following table summarizes the individual components of unamortized regulatory assets and liabilities as of December 31:


	Estimated Recovery or Refund Period	*	2023		2022
			(In thousands)
Regulatory assets:
Current:
Natural gas costs recoverable through rate adjustments	Up to 1 year		$	98,844	$	141,306
Electric fuel and purchased power deferral	Up to 1 year		33,918		2,656
Conservation programs	Up to 1 year		14,425		8,544
Cost recovery mechanisms	Up to 1 year		9,153		4,019
Environmental compliance programs	Up to 1 year		5,525		—
Other	Up to 1 year		10,627		8,567
			172,492		165,092
Noncurrent:
Pension and postretirement benefits	**		142,511		143,349
Cost recovery mechanisms	Up to 25 years		85,944		67,171
Environmental compliance programs	-		66,806		—
Natural gas costs recoverable through rate adjustments	Up to 2 years		55,493		—
Plant costs/asset retirement obligations	Over plant lives		46,009		44,462
Manufactured gas plant site remediation	-		26,127		26,624
Taxes recoverable from customers	Over plant lives		12,249		12,330
Long-term debt refinancing costs	Up to 37 years		2,600		3,188
Plant to be retired	-		772		21,525
Other	Up to 15 years		8,588		11,010
			447,099		329,659
Total regulatory assets			$	619,591	$	494,751
Regulatory liabilities:
Current:
Natural gas costs refundable through rate adjustments	Up to 1 year		$	43,161	$	955
Provision for rate refund	Up to 1 year		6,866		1,147
Cost recovery mechanisms	Up to 1 year		6,284		1,977
Margin sharing	Up to 1 year		5,243		—
Taxes refundable to customers	Up to 1 year		2,149		3,937
Conservation programs	Up to 1 year		2,130		4,126
Refundable fuel & electric costs	Up to 1 year		263		3,253
Electric fuel and purchased power deferral	Up to 1 year		—		4,929
Other	Up to 1 year		4,665		6,116
			70,761		26,440
Noncurrent:
Plant removal and decommissioning costs	Over plant lives		220,147		208,650
Taxes refundable to customers	Over plant lives		193,578		203,222
Environmental compliance programs	-		61,941		—
Cost recovery mechanisms	Up to 18 years		21,791		14,025
Accumulated deferred investment tax credit	Over plant lives		15,740		13,594
Pension and postretirement benefits	**		6,044		7,376
Other	Up to 14 years		1,809		1,587
			521,050		448,454
Total regulatory liabilities			$	591,811	$	474,894
Net regulatory position			$	27,780	$	19,857

*Estimated recovery or refund period for amounts currently being recovered or refunded in rates to customers.

** Recovered as expense is incurred or cash contributions are made.

As of December 31, 2023 and 2022, approximately $194.3 million and $242.5 million, respectively, of regulatory assets were not earning a rate of return but are expected to be recovered from customers in future rates. These assets are largely comprised of the unfunded portion of pension and postretirement benefits, asset retirement obligations, certain pipeline integrity costs, the estimated future cost of manufactured gas plant site remediation and the costs associated with environmental compliance.

The Company is subject to environmental compliance regulations in certain states which require natural gas distribution companies to reduce overall GHG emissions to certain thresholds as established by each applicable state. Compliance with these standards may be achieved through increased energy efficiency and conservation measures, purchased emission allowances and offsets and purchases of low carbon fuels. Emission allowances are allocated by the respective states to the Company at no cost, of which a portion is required to be sold at auction. The Company expects the compliance costs for these regulations and the revenues from the sale of the allocated emissions allowances will be passed through to customers in rates and has, accordingly, deferred the environmental compliance costs as a regulatory asset and proceeds from the sale of allowances as a regulatory liability.

In the last half of 2021 through 2022, the Company experienced high natural gas costs due to increase in demand outpacing the supply along with the impact of global events. Additionally, in December 2022 and January 2023, natural gas prices significantly increased across the Pacific Northwest from multiple price-pressuring events including wide-spread below-normal temperatures and higher natural gas consumption; reduced natural gas flows due to pipeline constraints, including maintenance in West Texas; and historically low regional natural gas storage levels.

For a discussion of the Company's most recent cases by jurisdiction, see Note 20.

In February 2019, the Company announced the retirement of three aging coal-fired electric generating units. The Company accelerated the depreciation related to these facilities in property, plant and equipment and recorded the difference between the accelerated depreciation, in accordance with GAAP, and the depreciation approved for rate-making purposes as regulatory assets. Requests were filed with the NDPSC, MTPSC and SDPUC, and subsequently approved, to offset the savings associated with the cessation of operations of these units with the amortization of the deferred regulatory assets. The Company ceased operations of Lewis & Clark Station in March 2021 and Units 1 and 2 at Heskett Station in February 2022. The Company subsequently reclassified the costs being recovered for these facilities from plant retirement to cost recovery mechanisms in the previous table and began amortizing the associated plant retirement and closure costs.

If, for any reason, the Company's regulated businesses cease to meet the criteria for application of regulatory accounting for all or part of their operations, the regulatory assets and liabilities relating to those portions ceasing to meet such criteria would be removed from the balance sheet and included in the statement of income or accumulated other comprehensive loss in the period in which the discontinuance of regulatory accounting occurs.