Regulatory Assets and Liabilities

12 Months Ended

Dec. 31, 2024

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, 2024				Dec. 31, 2023
Regulatory Assets			Current		Noncurrent		Current		Noncurrent
Pension and retiree medical obligations	9	Various	$	4	$	156	$	2	$	147
Net AROs (a)	1, 10	Various	—		70		—		59
Recoverable deferred taxes on AFUDC		Plant lives	—		46		—		44
Excess deferred taxes — TCJA	7	Various	1		45		1		47
Losses on reacquired debt		Term of related debt	1		17		1		18
Texas revenue surcharges		Less than one year	30		—		21		—
Other		Various	7		25		5		34
Total regulatory assets			$	43	$	359	$	30	$	349

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

Components of regulatory liabilities:

(Millions of Dollars)	See Note(s)	Remaining Amortization Period	Dec. 31, 2024				Dec. 31, 2023
Regulatory Liabilities			Current		Noncurrent		Current		Noncurrent
Deferred income tax adjustments and TCJA refunds (a)	7	Various	$	—	$	436	$	—	$	458
Plant removal costs	1, 10	Various	—		267		—		223
LP&L departure payment		Various	4		29		33		33
Effects of regulation on employee benefit costs		Various	—		18		—		19
Formula rates		One to two years	16		2		13		10
Contract valuation adjustments (b)	1, 8	Less than one year	67		—		41		—
Deferred electric energy costs		Less than one year	41		—		15		—
Other		Various	14		16		14		18
Total regulatory liabilities			$	142	$	768	$	116	$	761

(a)Includes the revaluation of recoverable/regulated plant accumulated deferred income taxes and revaluation impact of non-plant accumulated deferred income taxes due to the TCJA.

(b)Includes the fair value of FTR instruments utilized/intended to offset the impacts of transmission system congestion.

SPS’ regulatory assets not earning a return include past expenditures of $126 million and $123 million at Dec. 31, 2024 and 2023, respectively, which predominately relate to rate case expenses, losses on reacquired debt and transmission-related deferrals and amortizations. Additionally, the unfunded portion of pension and retiree medical obligations and net AROs (i.e. deferrals for which cash has not been disbursed) do not earn a return.