
(I)	Regulatory Assets and Liabilities. We apply the accounting guidance for regulated operations. Regulatory assets represent certain costs that are probable of recovery from our members in future revenues through rates under the wholesale power contracts with our members extending through December 31, 2050. Regulatory liabilities represent certain items of income that we are retaining and that will be applied in the future to reduce revenues required to be recovered from our members.

The following regulatory assets and liabilities are reflected on the unaudited consolidated balance sheet as of June 30, 2015 and December 31, 2014.


		2015		2014
		(dollars in thousands)

Regulatory Assets:
Premium and loss on reacquired debt(a)	$	66,823	$	71,731
Amortization on capital leases(b)		29,041		27,829
Outage costs(c)		41,616		45,795
Interest rate swap termination fees(d)		7,350		9,345
Depreciation expense(e)		46,226		46,938
Deferred charges related to Vogtle Units No. 3 and No. 4 training costs(f)		35,083		32,501
Interest rate options cost(g)		98,577		98,671
Deferral of effects on net margin—Smith Energy Facility(h)		169,188		128,666
Other regulatory assets(m)		19,122		22,573

Total Regulatory Assets	$	513,026	$	484,049
Regulatory Liabilities:
Accumulated retirement costs for other obligations(i)	$	14,332	$	18,559
Deferral of effects on net margin—Hawk Road Energy Facility(h)		28,622		29,867
Major maintenance reserve(j)		19,133		23,427
Amortization on capital leases(b)		26,198		21,693
Deferred debt service adder(k)		71,527		66,754
Asset retirement obligations(l)		28,277		28,870
Other regulatory liabilities(m)		4,881		4,903

Total Regulatory Liabilities	$	192,970	$	194,073

Net Regulatory Assets	$	320,056	$	289,976


(a)	Represents premiums paid, together with unamortized transaction costs related to reacquired debt that are being amortized over the lives of the refunding debt, which range up to 30 years.
(b)	Represents the difference between lease payments and the aggregate of the amortization on the capital lease assets and the interest on the capital lease obligations for rate-making purposes.
(c)	Consists of both coal-fired maintenance and nuclear refueling outage costs. Coal-fired outage costs are amortized on a straight-line basis to expense over a 24-month period. Nuclear refueling outage costs are amortized on a straight-line basis to expense over the 18 to 24-month operating cycles of each unit.
(d)	Represents losses on settled interest rate swap arrangements that are being amortized through 2016 and 2019.
(e)	Prior to Nuclear Regulatory Commission (NRC) approval of a 20-year license extension for Plant Vogtle, we deferred the difference between Plant Vogtle depreciation expense based on the then 40-year operating license and depreciation expense assuming an expected 20-year license extension. Amortization commenced upon NRC approval of the license extension in 2009 and is being amortized over the remaining life of the plant.
(f)	Deferred charges related to Vogtle Units No. 3 and No. 4 training and interest related carrying costs of such training. Amortization will commence effective with the commercial operation date of each unit and amortized to expense over the life of the units.
(g)	Deferral of net loss associated with the change in fair value and expired cost of interest rate options purchased to hedge interest rates on certain borrowings related to Vogtle Units No. 3 and No. 4 construction. Amortization will commence in February 2020 and will be amortized through February 2044, the life of the DOE-guaranteed loan which is financing a portion of the construction project.
(h)	Effects on net margin for Smith and Hawk Road Energy Facilities are deferred until the end of 2015 and will be amortized over the remaining life of each respective plant.
(i)	Represents difference in timing of recognition of retirement costs associated with long-lived assets in which there are no legal obligations to retire for financial statement purposes and for ratemaking purposes.
(j)	Represents collections for future major maintenance costs; revenues are recognized as major maintenance costs are incurred.
(k)	Represents collections to fund certain debt payments to be made through the end of 2025 which will be in excess of amounts collected through depreciation expense; the deferred credits will be amortized over the remaining useful life of the plants.
(l)	Represents difference in timing of recognition of the costs of decommissioning for financial statement purposes and for ratemaking purposes.
(m)	The amortization period for other regulatory assets range up to 35 years and the amortization period of other regulatory liabilities range up to 18 years.