Regulatory Assets and Liabilities

12 Months Ended

Dec. 31, 2020

Regulatory Assets and Liabilities Disclosure [Abstract]

Regulatory Assets and Liabilities

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 rates. SPS would be required to recognize the write-off of regulatory assets and liabilities in net income or other comprehensive income if changes in the utility industry no longer allow for the application of regulatory accounting guidance under GAAP.

Components of regulatory assets:

(Millions of Dollars)	See Note(s)	Remaining Amortization Period	Dec. 31, 2020				Dec. 31, 2019
Regulatory Assets			Current		Noncurrent		Current		Noncurrent
Pension and retiree medical obligations	9	Various	$	12	$	178	$	11	$	204
Excess deferred taxes — TCJA	7	Various	3		51		2		52
Recoverable deferred taxes on AFUDC		Plant lives	—		42		—		34
Net AROs (a)	1, 10	Various	—		33		—		27
Losses on reacquired debt		Term of related debt	1		20		1		21
Texas revenue surcharge		One to two years	54		17		2		—
Conservation programs (b)	1	One to two years	1		2		1		1
Other		Various	5		14		3		25
Total regulatory assets			$	76	$	357	$	20	$	364

(a)Includes amounts recorded for future recovery of AROs.

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

Components of regulatory liabilities:

(Millions of Dollars)	See Note(s)	Remaining Amortization Period	Dec. 31, 2020				Dec. 31, 2019
Regulatory Liabilities			Current		Noncurrent		Current		Noncurrent
Deferred income tax adjustments and TCJA refunds (a)	7	Various	$	6	$	513	$	7	$	535
Plant removal costs	1, 10	Various	—		177		—		175
Revenue subject to refund		One to two years	4		4		14		1
Gain from asset sales		Various	—		2		—		2
Deferred electric energy costs		Less than one year	35		—		82		—
Contract valuation adjustments (b)	1, 8	Less than one year	7		—		12		—
Other		Various	5		22		3		19
Total regulatory liabilities (c)			$	57	$	718	$	118	$	732

(a)Includes the revaluation of recoverable/regulated plant ADIT and revaluation impact of non-plant ADIT due to the TCJA.

(b)Includes the fair value of certain long-term PPAs used to meet energy capacity requirements.

(c)Revenue subject to refund of $4 million for 2019 was included in other current liabilities and none for 2020.

At Dec. 31, 2020 and 2019, SPS’ regulatory assets not earning a return primarily included the unfunded portion of pension and retiree medical obligations and net AROs. In addition, SPS’ regulatory assets included $114 million and $57 million at Dec. 31, 2020 and 2019, respectively, of past expenditures not earning a return. Amounts are related to formula rates, losses on reacquired debt and certain rate case expenditures.