
15.	Regulatory Assets and Liabilities

Xcel Energy prepares its consolidated financial statements in accordance with the applicable accounting guidance, as discussed in Note 1. Under this guidance, regulatory assets and liabilities are created for amounts that regulators may allow to be collected, or may require to be paid back to customers in future electric and natural gas rates. Any portion of Xcel Energy’s business that is not regulated cannot establish regulatory assets and liabilities. If changes in the utility industry or the business of Xcel Energy no longer allow for the application of regulatory accounting guidance under GAAP, Xcel Energy would be required to recognize the write-off of regulatory assets and liabilities in net income or OCI.

The components of regulatory assets shown on the consolidated balance sheets at Dec. 31, 2016 and 2015 are:



(Thousands of Dollars)	See Note(s)	Remaining Amortization Period	Dec. 31, 2016				Dec. 31, 2015
Regulatory Assets			Current		Noncurrent		Current		Noncurrent
Pension and retiree medical obligations ^(a)	9	Various	$	89,413	$	1,548,966	$	90,249	$	1,368,115
Recoverable deferred taxes on AFUDC recorded in plant	1	Plant lives	—		424,354		—		408,994
Net AROs ^(b)	1, 13, 14	Plant lives	—		379,375		—		306,671
Environmental remediation costs	1, 13	Various	10,863		165,190		6,702		166,883
Contract valuation adjustments ^(c)	1, 11	Term of related contract	17,710		111,102		26,379		128,780
Depreciation differences	1	Pending rate case	15,363		90,426		14,221		99,835
Purchased power contract costs	13	Term of related contract	1,762		70,107		1,587		70,411
PI EPU	12	Eighteen years	3,288		61,772		2,967		65,060
Conservation programs ^(d)	1	One to three years	47,609		48,451		31,793		50,047
State commission adjustments	1	Plant lives	970		27,310		988		26,708
Renewable resources and environmental initiatives	13	One to four years	34,381		23,392		33,014		23,565
Losses on reacquired debt	4	Term of related debt	4,058		22,576		5,008		26,268
Deferred purchased natural gas and electric energy costs	1	One to four years	18,313		16,317		11,783		12,762
Nuclear refueling outage costs	1	One to two years	48,750		16,196		67,545		28,913
Gas pipeline inspection and remediation costs	12	One to three years	7,042		13,513		6,858		13,662
Property tax		Various	9,393		1,653		21,757		14,428
CACJA recovery rider		Less than one year	24,260		—		—		20,020
Other		Various	30,480		60,167		23,779		27,619
Total regulatory assets			$	363,655	$	3,080,867	$	344,630	$	2,858,741

^(a)

Includes $241.0 million and $257.5 million for the regulatory recognition of the NSP-Minnesota pension expense of which $15.3 million and $21.3 million is included in the current asset at Dec. 31, 2016 and 2015, respectively. Also included are $11.1 million and $12.5 million of regulatory assets related to the nonqualified pension plan of which $2.6 million and $4.0 million is included in the current asset at Dec. 31, 2016 and 2015, respectively.


^(b)	Includes amounts recorded for future recovery of AROs, less amounts recovered through nuclear decommissioning accruals and gains from decommissioning investments.


^(c)	Includes the fair value of certain long-term PPAs used to meet energy capacity requirements and valuation adjustments on natural gas commodity purchases.


^(d)	Includes costs for conservation programs, as well as incentives allowed in certain jurisdictions.

The components of regulatory liabilities shown on the consolidated balance sheets at Dec. 31, 2016 and 2015 are:



(Thousands of Dollars)	See Note(s)	Remaining Amortization Period	Dec. 31, 2016				Dec. 31, 2015
Regulatory Liabilities			Current		Noncurrent		Current		Noncurrent
Plant removal costs	1, 13	Plant lives	$	—	$	1,134,583	$	—	$	1,131,023
Renewable resources and environmental initiatives	12, 13	Various	4,674		71,098		6,271		41,869
Deferred income tax adjustment	1, 6	Various	—		48,054		—		46,737
Investment tax credit deferrals	1, 6	Various	—		45,334		—		48,985
Gain from asset sales	12	Various	—		4,000		2,640		2,584
Contract valuation adjustments ^(a)	1, 11	Term of related contract	22,077		1,652		21,661		—
PSCo earnings test	12	One to two years	8,300		914		42,868		9,472
Deferred electric, natural gas and steam production costs	1	Less than one year	97,823		—		146,235		—
Conservation programs ^(b)	1, 12	Less than one year	25,200		—		34,444		—
DOE settlement	12	Less than one year	19,668		—		16,139		—
Gas pipeline inspection costs		Less than one year	5,108		—		1,140		4,273
Low income discount program		Less than one year	2,025		—		2,475		—
Other		Various	36,019		77,577		32,957		47,946
Total regulatory liabilities ^(c)			$	220,894	$	1,383,212	$	306,830	$	1,332,889


^(a)	Includes the fair value of certain long-term PPAs used to meet energy capacity requirements and valuation adjustments on natural gas commodity purchases.


^(b)	Includes costs for conservation programs, as well as incentives allowed in certain jurisdictions.


^(c)	Revenue subject to refund of $46.0 million and $75.0 million for 2016 and 2015, respectively, is included in other current liabilities.

At Dec. 31, 2016 and 2015, approximately $166 million and $169 million of Xcel Energy’s regulatory assets represented past expenditures not currently earning a return, respectively. This amount primarily includes recoverable purchased natural gas and electric energy costs and certain expenditures associated with renewable resources and environmental initiatives.