Regulatory (Tables)

12 Months Ended

Dec. 31, 2024

Schedule of Regulatory Assets and Regulatory Liabilities

Details of the regulatory assets and liabilities are presented in the following table:

Regulatory Assets and Liabilities


	December 31,		December 31,
(millions)	2024		2023
Regulatory assets:
Regulatory tax asset (1)	$	117	$	112
Cost-recovery clauses (2)		20		94
Capital cost recovery for early retired assets (3)		513		507
Capital cost recovery for retired Polk Unit 1 components (4)		142		0
Postretirement benefits (5)		243		236
Storm reserve (6)		377		7
Other		29		32
Total regulatory assets		1,441		988
Less: Current portion		343		161
Long-term regulatory assets	$	1,098	$	827
Regulatory liabilities:
Regulatory tax liability (7)	$	456	$	477
Cost-recovery clauses - deferred balances (2)		80		20
Accumulated reserve—cost of removal (8)		304		271
Deferred production tax credits (9)		57		23
Other		7		4
Total regulatory liabilities		904		795
Less: Current portion		146		94
Long-term regulatory liabilities	$	758	$	701

(1)

The regulatory tax asset is primarily associated with the depreciation and recovery of AFUDC-equity. This asset does not earn a return but rather is included in the capital structure, which is used in the calculation of the weighted cost of capital used to determine revenue requirements. It will be recovered over the expected life of the related assets.

(2)

These assets and liabilities are related to FPSC clauses and riders. They are recovered or refunded through cost-recovery mechanisms approved by the FPSC on a dollar-for-dollar basis in a subsequent period.

(3)

This regulatory asset is related to the remaining net book value of Big Bend Units 1 through 3 and smart meter assets that were retired. The balance earns a rate of return as permitted by the FPSC and will be recovered as a separate line item on customer bills for a period of 15 years, beginning in 2022 through 2036. See “Tampa Electric Big Bend Modernization Project” above for further information.

(4)

This regulatory asset is related to the remaining net book value of certain components of Polk Unit 1 that were early retired on December 31, 2024. The balance earns a rate of return as permitted by the FPSC and will be recovered through base rates over an 11-year recovery period beginning on January 1, 2025.

(5)

This asset is related to the deferred costs of postretirement benefits and it is amortized over the remaining service life of plan participants. Deferred costs of postretirement benefits that are included in expense are recognized as cost of service for rate-making purposes as permitted by the FPSC.

(6)

See "Tampa Electric Storm Restoration Cost Recovery" above for information regarding this reserve. The regulatory asset is included in rate base and earns a rate of return as permitted by the FPSC.

(7)

The regulatory tax liability is primarily related to the revaluation of TEC’s deferred income tax balances recorded on December 31, 2017 at the lower corporate income tax rate due to U.S. tax reform. The liability related to the revaluation of the deferred

income tax balances is amortized and returned to customers through rate reductions or other revenue offsets based on IRS regulations and the settlement agreement for tax reform benefits approved by the FPSC.

(8)

This item represents the non-ARO cost of removal in the accumulated reserve for depreciation. AROs are costs for legally required removal of property, plant and equipment. Non-ARO cost of removal represents estimated funds received from customers through depreciation rates to cover future non-legally required cost of removal of property, plant and equipment, net of salvage value upon retirement, which reduces rate base for ratemaking purposes. This liability is reduced as costs of removal are incurred.

(9) This regulatory liability represents the deferred benefit for production tax credits (PTC) available for qualifying solar facilities

placed in service on or after January 1, 2022, which reduced income tax expense. Following the recommendation of the FPSC, these PTC deferrals will be amortized over a three-year period.