Asset Retirement Obligations (MEC) (MidAmerican Energy Company and Subsidiaries [Member])

12 Months Ended

Dec. 31, 2011

MidAmerican Energy Company and Subsidiaries [Member]

Notes to Consolidated Financial Statements [Line Items]

Asset Retirement Obligation Disclosure [Text Block]

(11) Asset Retirement Obligations

MidAmerican Energy estimates its ARO liabilities based upon detailed engineering calculations of the amount and timing of the future cash spending for a third party to perform the required work. Spending estimates are escalated for inflation and then discounted at a credit-adjusted, risk-free rate. Changes in estimates could occur for a number of reasons, including plan revisions, inflation and changes in the amount and timing of the expected work.

MidAmerican Energy does not recognize liabilities for AROs for which the fair value cannot be reasonably estimated. Due to the indeterminate removal date, the fair value of the associated liabilities on certain transmission, distribution and other assets cannot currently be estimated, and no amounts are recognized on the Consolidated Financial Statements other than those included in the cost of removal regulatory liability established via approved depreciation rates in accordance with accepted regulatory practices. These accruals totaled $603 million and $578 million as of December 31, 2011 and 2010, respectively.

The following table reconciles the beginning and ending balances of MidAmerican Energy's ARO liabilities for the years ended December 31, (in millions):

	2011		2010
Beginning balance	$	220	$	212
Change in estimated costs	50		(2		)
Additions	10		—
Retirements	—		(2		)
Accretion	13		12
Ending balance	$	293	$	220
Reflected as:
Other current liabilities	$	—	$	4
Asset retirement obligations	293		216
	$	293	$	220
Investment in trust funds	$	306	$	295

MidAmerican Energy's most significant ARO liabilities relate to the decommissioning of Quad Cities Station. The 2011 change in estimated costs is primarily the result of a new valuation study conducted by the operator of Quad Cities Station, consistent with its practice of periodically performing such studies. The revision decreased regulatory liabilities and did not impact net income. As of December 31, 2011 and 2010, $230 million and $178 million, respectively, of the total ARO liability pertained to the decommissioning of Quad Cities Station. The fair value of the assets held in the trust is reflected in investments and nonregulated property, net, on the Consolidated Balance Sheets, and funds are restricted for satisfying the Quad Cities Station ARO liability.