Regulatory Assets and Liabilities

6 Months Ended

Jun. 30, 2023

Regulatory Assets and Liabilities Disclosure [Abstract]

Regulatory Assets and Liabilities. We apply the accounting guidance for regulated operations. Regulatory assets represent certain costs that are probable of recovery through future rates. We expect to recover such costs from our members in future revenues through rates under the wholesale power contracts we have with each of our members. The wholesale power contracts extend 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 consolidated balance sheets as of June 30, 2023 and December 31, 2022.


	2023		2022
	(dollars in thousands)
Regulatory Assets:
Premium and loss on reacquired debt(a)	$	27,485	$	29,494
Amortization of financing leases(b)	30,344		31,908
Outage costs(c)	36,043		29,317
Asset retirement obligations—Ashpond and other(l)	376,122		353,212
Asset retirement obligations—Nuclear(l)	—		32,192
Depreciation expense - Plant Vogtle(d)	34,838		35,549
Depreciation expense - Plant Wansley(e)	351,734		361,784
Deferred charges related to Vogtle Units No. 3 and No. 4 training costs(f)	55,669		54,701
Interest rate options cost(g)	139,539		136,827
Deferral of effects on net margin—Smith Energy Facility(h)	133,758		136,730
Other regulatory assets(o)	13,287		10,591
Total Regulatory Assets	$	1,198,819	$	1,212,305
Regulatory Liabilities:
Accumulated retirement costs for other obligations(i)	$	34,296	$	35,580
Deferral of effects on net margin—Hawk Road Energy Facility(h)	16,328		16,636
Deferral of effects on net margin—Bobby C. Smith Jr. Energy Facility(p)	6,941		14,825
Major maintenance reserve(j)	94,395		74,584
Amortization of financing leases(b)	4,108		5,557
Deferred debt service adder(k)	162,516		154,514
Asset retirement obligations—Nuclear(l)	19,520		—
Revenue deferral plan(m)	330,949		357,460
Natural gas hedges(n)	49,235		131,804
Other regulatory liabilities(o)	1,076		1,230
Total Regulatory Liabilities	$	719,364	$	792,190
Net Regulatory Assets	$	479,455	$	420,115

(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 21 years.

(b)Represents the difference between expense recognized for rate-making purposes versus financial statement purposes related to finance lease payments and the aggregate of the amortization of the asset and interest on the obligation.

(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 periods up to 60 months, depending on the operating cycle of each unit. Nuclear refueling outage costs are amortized on a straight-line basis to expense over the 18 or 24-month operating cycles of each unit.

(d)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.

(e)Represents the deferral of accelerated depreciation associated with the early retirement of Plant Wansley, which occurred on August 31, 2022. Amortization commenced upon the retirement of Plant Wansley and will end no later than December 31, 2040.

(f)Deferred charges consist of training related costs, including interest and 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 premiums paid to purchase interest rate options used to hedge interest rates on certain borrowings, related carrying costs and other incidentals associated with construction of Vogtle Units No. 3 and No. 4. Amortization commenced in August 2023 after Vogtle Unit No. 3 was placed in service on July 31, 2023.

(h)Effects on net margin for Smith and Hawk Road Energy Facilities were deferred through the end of 2015 and are being amortized over the remaining life of each respective plant.

(i)Represents the accrual of retirement costs associated with long-lived assets for which there are no legal obligations to retire the assets.

(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 the difference in the timing of recognition of decommissioning costs for financial statement purposes versus ratemaking purposes, as well as the deferral of unrealized gains and losses of funds set aside for decommissioning.

(m)Deferred revenues under a rate management program that allowed for additional collections over a five-year period which began in 2018. These amounts will be amortized to income and applied to member billings, per each members' election, over the subsequent five-year period.

(n)Represents the deferral of unrealized gains on natural gas contracts.

(o)The amortization periods for other regulatory assets range up to 27 years and the amortization periods of other regulatory liabilities range up to 4 years.

(p)Effects on net margin for the Bobby C. Smith Jr. Energy Facility that are being deferred until on or before January 2026 and will be amortized over the remaining life of the plant.