REGULATORY ASSETS, LIABILITIES, AND BALANCING ACCOUNTS

9 Months Ended

Sep. 30, 2019

REGULATORY ASSETS, LIABILITIES, AND BALANCING ACCOUNTS

Regulatory Assets and Liabilities

Long-Term Regulatory Assets

Long-term regulatory assets are comprised of the following:


	Asset Balance at
(in millions)	September 30, 2019		December 31, 2018
Pension benefits⁽¹⁾	$	1,918	$	1,947
Environmental compliance costs	1,067		1,013
Utility retained generation⁽²⁾	239		274
Price risk management	140		90
Unamortized loss, net of gain, on reacquired debt	66		76
Catastrophic event memorandum account ⁽³⁾	954		790
Wildfire expense memorandum account ⁽⁴⁾	143		94
Fire hazard prevention memorandum account ⁽⁵⁾	294		263
Fire risk mitigation memorandum account⁽⁶⁾	109		—
Wildfire mitigation plan memorandum account ⁽⁷⁾	160		—
Deferred income taxes ⁽⁸⁾	94		—
Other ⁽⁹⁾	527		417
Total long-term regulatory assets	$	5,711	$	4,964

⁽¹⁾Payments into the pension and other benefits plans are based on annual contribution requirements. As these annual requirements continue indefinitely into the future, the Utility expects to continuously recover pension benefits.

⁽²⁾In connection with the settlement agreement entered into among PG&E Corporation, the Utility, and the CPUC in 2003 to resolve the Utility’s 2001 proceeding under Chapter 11, the CPUC authorized the Utility to recover $1.2 billion of costs related to the Utility’s retained generation assets. The individual components of these regulatory assets are being amortized over the respective lives of the underlying generation facilities, consistent with the period over which the related revenues are recognized.

⁽³⁾Includes costs of responding to catastrophic events that have been declared a disaster or state of emergency by competent federal or state authorities. Recovery of CEMA costs are subject to CPUC review and approval.

⁽⁴⁾Includes specific incremental wildfire-related liability costs the CPUC approved for tracking in June 2018. Recovery of WEMA costs are subject to CPUC review and approval.

⁽⁵⁾Includes costs associated with the implementation of regulations and requirements adopted to protect the public from potential fire hazards associated with overhead power line facilities and nearby aerial communication facilities that have not been previously authorized in another proceeding. Recovery of FHPMA costs are subject to CPUC review and approval.

⁽⁶⁾Includes costs associated with the 2019 Wildfire Mitigation Plan for the period January 1, 2019 through June 4, 2019. Recovery of FRMMA costs are subject to CPUC review and approval.

⁽⁷⁾ Includes costs associated with the 2019 Wildfire Mitigation Plan for the period June 5, 2019 through September 30, 2019. Recovery of WMPMA costs are subject to CPUC review and approval.

⁽⁸⁾ Represents cumulative differences between amounts recognized for ratemaking purposes and expense recognized in accordance with GAAP.

⁽⁹⁾ September 30, 2019 balance includes $178 million of unamortized debt issuance costs and debt discount that was written off in March 2019 to present the debt subject to compromise at the outstanding face value.

Long-Term Regulatory Liabilities

Long-term regulatory liabilities are comprised of the following:


	Liability Balance at
(in millions)	September 30, 2019		December 31, 2018
Cost of removal obligations⁽¹⁾	$	6,341	$	5,981
Deferred income taxes	—		283
Recoveries in excess of AROs⁽³⁾	462		356
Public purpose programs⁽⁴⁾	802		674
Employee benefit plans⁽⁵⁾	428		421
Other	1,303		824
Total long-term regulatory liabilities	$	9,336	$	8,539

⁽¹⁾Represents the cumulative differences between the recorded costs to remove assets and amounts collected in rates for expected costs to remove assets.

⁽²⁾Represents the cumulative differences between ARO expenses and amounts collected in rates. Decommissioning costs related to the Utility’s nuclear facilities are recovered through rates and are placed in nuclear decommissioning trusts. This regulatory liability also represents the deferral of realized and unrealized gains and losses on these nuclear decommissioning trust investments. (See Note 9 below.)

⁽³⁾ Represents amounts received from customers designated for public purpose program costs expected to be incurred beyond the next 12 months, primarily related to energy efficiency programs.

⁽⁴⁾ Represents cumulative differences between incurred costs and amounts collected in rates for Post-Retirement Medical, Post-Retirement Life and Long Term Disability Plans.

For more information, see Note 3 of the Notes to the Consolidated Financial Statements in Item 8 of the 2018 Form 10-K.

Regulatory Balancing Accounts

Current regulatory balancing accounts receivable and payable are comprised of the following:


	Receivable Balance at
(in millions)	September 30, 2019		December 31, 2018
Electric distribution	$	148	$	160
Electric transmission	43		128
Utility generation	93		79
Gas distribution and transmission	454		462
Energy procurement	739		168
Public purpose programs	137		111
Other	305		327
Total regulatory balancing accounts receivable	$	1,919	$	1,435


	Payable Balance at
(in millions)	September 30, 2019		December 31, 2018
Electric transmission	$	125	$	134
Gas distribution and transmission	24		9
Energy procurement	545		59
Public purpose programs	612		587
Other	349		287
Total regulatory balancing accounts payable	$	1,655	$	1,076

For more information, see Note 3 of the Notes to the Consolidated Financial Statements in Item 8 of the 2018 Form 10-K.