Note 11 - Rate Regulation

The following table details regulatory assets and liabilities:



	December 31, 2013				December 31, 2012
	Current		Noncurrent		Current		Noncurrent
	(in millions)
Regulatory assets:
Questar Gas
Purchased-gas adjustment	$	—	$	—	$	15.2	$	—
DSM	11.2		—		11.0		—
Deferred production taxes	5.7		—		5.0		—
Deferred royalties	5.2		—		6.3		—
Contract withholding	8.1		—		3.5		—
Cost of reacquired debt	—		4.8		—		5.3
Pipeline integrity costs	—		9.3		—		8.7
ARO cost-of-service gas wells	—		2.0		—		2.4
Total Questar Gas regulatory assets	30.2		16.1		41.0		16.4
Questar Pipeline
Gas imbalance	5.3		—		4.4		—
Revenue sharing	0.3		—		1.3		—
Cost of reacquired debt	—		2.6		—		3.0
Income taxes recoverable from customers	—		0.6		—		0.9
Other	—		1.2		—		1.3
Total Questar Pipeline regulatory assets	5.6		4.4		5.7		5.2
Total regulatory assets	$	35.8	$	20.5	$	46.7	$	21.6

Regulatory liabilities:
Questar Gas
Purchased-gas adjustment	$	7.4	$	—	$	—	$	—
CET	3.3		—		4.2		—
Cost of plant removal	—		52.7		—		46.2
Income taxes refundable to customers	—		0.3		—		0.5
Other	0.4		—		0.1		—
Total Questar Gas regulatory liabilities	11.1		53.0		4.3		46.7
Questar Pipeline
Gas imbalance	3.0		—		1.4		—
Revenue sharing	—		—		0.1		—
Postretirement medical	—		8.2		—		7.7
Total Questar Pipeline regulatory liabilities	3.0		8.2		1.5		7.7
Total regulatory liabilities	$	14.1	$	61.2	$	5.8	$	54.4

Questar Gas and Questar Pipeline record regulatory assets and liabilities. They recover the costs of assets but do not generally receive a return on these assets.

Following is a description of Questar Gas's regulatory assets and liabilities:


-	Purchased-gas costs that are different from those provided for in present rates are accumulated and recovered or credited through future rate changes.


-	The DSM program asset represents funds expended for promoting the conservation of natural gas through advertising, rebates for efficient homes and appliances, and home energy audits. These costs are deferred and recovered from customers through periodic rate adjustments.


-	Production taxes and royalties on cost-of-service gas production are recorded when the gas is produced and recovered from customers when taxes and royalties are paid, generally within 12 months.

- Questar Gas recorded a regulatory asset for a disputed amount withheld from a supplier of gathering services. The amount withheld will be recovered from customers if it is determined that Questar Gas is required to pay the supplier.


-	Gains and losses on the reacquisition of debt by rate-regulated companies are deferred and amortized as interest expense over the would-be remaining life of the reacquired debt. The reacquired debt costs had a weighted-average life of approximately 9 years as of December 31, 2013.


-	The costs of complying with pipeline-integrity regulations are recovered in rates subject to a PSCU order. Questar Gas is allowed to recover $4.4 million per year. Costs incurred in excess of this amount will be recovered in future rate changes.


-	A regulatory asset that represents future expenses related to abandonment of Wexpro-operated gas and oil wells. The regulatory asset will be reduced over an 18-year period following an amortization schedule that commenced January 1, 2003, or as cash is paid to plug and abandon wells.


-	The CET liability represents actual revenues received that are in excess of the allowed revenues. These amounts are refunded through periodic rate adjustments.

- Cost of plant removal represents asset retirement costs recovered from customers for other than legal obligations.


-	Income taxes refundable to customers arise from adjustments to deferred taxes, refunded over the life of the related property, plant and equipment.

Following is a description of Questar Pipeline's regulatory assets and liabilities:


-	Regulatory assets and liabilities for gas imbalances, fuel over- or under-recovered and sharing interruptible revenues with customers.


-	Gains and losses on the reacquisition of debt are deferred and amortized as interest expense over the would-be remaining life of the reacquired debt. The reacquired debt costs had a weighted-average life of approximately 7 years as of December 31, 2013.


-	Income taxes recoverable from customers arise from adjustments to deferred taxes, recovered over the life of the related property, plant and equipment.


-	A regulatory liability for the collection of postretirement medical costs allowed in rates in excess of actual charges.

Rate Changes

Questar Gas has an allowed return on equity of 10.35% in Utah. Questar Gas filed a general rate case in Utah in July 2013, requesting a $19 million increase in revenues and a continuation of its 10.35% authorized return on equity. Hearings were held in January 2014 and a decision in the case was received on February 21, 2014, which authorized an allowed return on equity of 9.85% and an annual increase in revenues of $7.6 million effective March 1, 2014. Questar Gas filed a general rate case in Wyoming in December 2011 and received an order in 2012, which increased rates by $0.6 million per year and authorized a return on equity of 9.16%.