NOTE 3: REGULATORY ASSETS, LIABILITIES, AND BALANCING ACCOUNTS

Regulatory Assets and Liabilities

Current Regulatory Assets

At September 30, 2017, the Utility had current regulatory assets of $573 million, which included $392 million of costs related to CEMA fire prevention and vegetation management. In 2014, the CPUC directed the Utility to perform additional vegetation management work in response to the severe drought in California.

Long-Term Regulatory Assets

Long-term regulatory assets are comprised of the following:

	Asset Balance at
(in millions)	September 30, 2017			December 31, 2016
Deferred income taxes	$	4,373	$		3,859
Pension benefits		2,487			2,429
Environmental compliance costs		779			778
Utility retained generation		331			364
Price risk management		77			92
Unamortized loss, net of gain, on reacquired debt		65			76
Other		434			353
Total long-term regulatory assets	$	8,546	$		7,951

At September 30, 2017, other long-term regulatory assets included $189 million of catastrophic event-related costs incurred 2012 through 2017 that the Utility believes is recoverable through CEMA based on historical experience in recovering costs for these types of events.

Long-Term Regulatory Liabilities

Long-term regulatory liabilities are comprised of the following:

	Liability Balance at
(in millions)	September 30, 2017		December 31, 2016
Cost of removal obligations	$	5,456	$	5,060
Recoveries in excess of AROs		622		626
Public purpose programs		573		567
Other		614		552
Total long-term regulatory liabilities	$	7,265	$	6,805

For more information, see Note 3 of the Notes to the Consolidated Financial Statements in Item 8 of the 2016 Form 10-K.

Regulatory Balancing Accounts

Current regulatory balancing accounts receivable and payable are comprised of the following:

	Receivable
	Balance at
(in millions)	September 30, 2017		December 31, 2016
Electric distribution	$	-	$	132
Electric transmission		182		244
Utility generation		-		48
Gas distribution and transmission		654		541
Energy procurement		135		132
Public purpose programs		116		106
Other		391		297
Total regulatory balancing accounts receivable	$	1,478	$	1,500

	Payable
	Balance at
(in millions)	September 30, 2017		December 31, 2016
Electric distribution	$	197	$	-
Utility generation		150		-
Electric transmission		142		99
Gas distribution and transmission		-		48
Energy procurement		131		13
Public purpose programs		426		264
Other		282		221
Total regulatory balancing accounts payable	$	1,328	$	645

For more information, see Note 3 of the Notes to the Consolidated Financial Statements in Item 8 of the 2016 Form 10-K.