
(13)	Asset Retirement Obligations

The Company 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.

The Company 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 $1.404 billion and $1.376 billion as of December 31, 2011 and 2010, respectively.

As a result of the deconsolidation of Bridger Coal on January 1, 2010, the Company deconsolidated $79 million of ARO liabilities and mine reclamation trust funds. The following table reconciles the beginning and ending balances of the Company's ARO liabilities for the years ended December 31, (in millions):



	2011			2010

Beginning balance	$	390		$	463
Deconsolidation of Bridger Coal	—			(79		)
Change in estimated costs	38			(1		)
Additions	39			2
Retirements	(19		)	(17		)
Accretion	23			22
Foreign currency exchange rate changes	(1		)	—
Ending balance	$	470		$	390

Reflected as:
Other current liabilities	$	20		$	8
Other long-term liabilities	450			382
	$	470		$	390

Nuclear decommissioning trust funds	$	308		$	297

The Company's most significant ARO liabilities relate to the decommissioning of nuclear power plants and obligations associated with its other generating facilities and offshore natural gas pipelines. The Nuclear Regulatory Commission ("NRC") regulates the decommissioning of nuclear power plants, which includes the planning and funding for the decommissioning. In accordance with these regulations, MidAmerican Energy submits a biennial report to the NRC providing reasonable assurance that funds will be available to pay for its share of the Quad Cities Station decommissioning. The decommissioning costs are included in base rates in MidAmerican Energy's Iowa tariffs. MidAmerican Energy's share of estimated Quad Cities Station decommissioning costs was $230 million and $178 million as of December 31, 2011 and 2010, respectively. MidAmerican Energy has established trusts for the investment of decommissioning funds. The fair value of the assets held in the trusts was $306 million and $295 million as of December 31, 2011 and 2010, respectively, and is reflected in noncurrent investments and restricted cash and investments on the Consolidated Balance Sheets.

The change in estimated costs in 2011 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. Additionally, Northern Natural Gas revised its offshore pipeline removal estimates based on a May 2011 letter order received from the Galveston District Corps of Engineers. The revision increased property, plant and equipment, net and did not impact net income.

Certain of the Company's decommissioning and reclamation obligations relate to jointly-owned facilities and mine sites, and as such, each subsidiary is committed to pay a proportionate share of the decommissioning or reclamation costs. In the event of a default by any of the other joint participants, the respective subsidiary may be obligated to absorb, directly or by paying additional sums to the entity, a proportionate share of the defaulting party's liability. The Company's estimated share of the decommissioning and reclamation obligations are primarily recorded as ARO liabilities.