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Asset Retirement Obligations

12 Months Ended

Dec. 31, 2023

Asset Retirement Obligations Disclosure [Line Items]

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 changes in laws and regulations, 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 generation, 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 $2.7 billion and $2.6 billion as of December 31, 2023 and 2022, respectively.

The following table presents the Company's ARO liabilities by asset type as of December 31 (in millions):


	2023		2022

Wind-powered generating facilities	$	452	$	353
Quad Cities Station	407		417
Fossil-fueled generating facilities	402		396
Solar-powered generating facilities	36		30
Offshore pipeline facilities	15		14
Other	116		118
Total asset retirement obligations	$	1,428	$	1,328

Quad Cities Station nuclear decommissioning trust funds	$	767	$	664

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


	2023		2022

Beginning balance	$	1,328	$	1,340
Change in estimated costs	54		2
Acquisitions	—		29
Additions	56		32
Retirements	(64)		(122)
Accretion	54		47
Ending balance	$	1,428	$	1,328

Reflected as:
Other current liabilities	$	34	$	76
Other long-term liabilities	1,394		1,252
Total ARO liability	$	1,428	$	1,328

The Nuclear Regulatory Commission regulates the decommissioning of nuclear generating facilities, which includes the planning and funding for the decommissioning. In accordance with these regulations, MidAmerican Energy submits a biennial report to the Nuclear Regulatory Commission providing reasonable assurance that funds will be available to pay for its share of the Quad Cities Station decommissioning.

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.

PAC

Asset Retirement Obligations Disclosure [Line Items]

Asset Retirement Obligations

PacifiCorp 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 changes in laws and regulations, plan revisions, inflation and changes in the amount and timing of the expected work.

PacifiCorp 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. Cost of removal regulatory liabilities totaled $1,456 million and $1,332 million as of December 31, 2023 and 2022, respectively.

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


	2023		2022

Beginning balance	$	331	$	304
Change in estimated costs	(4)		20
Additions	27		3
Retirements	(9)		(6)
Accretion	11		10
Ending balance	$	356	$	331

Reflected as:
Other current liabilities	$	9	$	11
Other long-term liabilities	347		320
	$	356	$	331

Certain of PacifiCorp's decommissioning and reclamation obligations relate to jointly owned facilities and mine sites. PacifiCorp 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, PacifiCorp may be obligated to absorb, directly or by paying additional sums to the entity, a proportionate share of the defaulting party's liability. PacifiCorp's estimated share of the decommissioning and reclamation obligations are primarily recorded as ARO liabilities.

MEC

Asset Retirement Obligations Disclosure [Line Items]

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 changes in laws and regulations, plan revisions, inflation and changes in the amount and timing of the expected work. The change in estimated costs for 2023 was primarily the result of an updated decommissioning estimate for its wind-powered generating facilities, which is a non-cash investing activity and reflects changes in the projected removal costs per turbine.

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 generation, transmission, distribution and other assets cannot currently be estimated, and no amounts are recognized on the 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 $411 million and $392 million as of December 31, 2023 and 2022, respectively.

The following table presents MidAmerican Energy's ARO liabilities by asset type as of December 31 (in millions):


	2023		2022

Quad Cities Station	$	407	$	417
Fossil-fueled generating facilities	62		76
Wind-powered generating facilities	305		210
Solar-powered generating facilities and other	4		4
Total asset retirement obligations	$	778	$	707

Quad Cities Station nuclear decommissioning trust funds(1)	$	767	$	664

(1)Refer to Note 6 for a discussion of the Quad Cities Station nuclear decommissioning trust funds.

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


	2023		2022

Beginning balance	$	707	$	787
Change in estimated costs	56		(27)
Additions	3		2
Retirements	(21)		(85)
Accretion	33		30
Ending balance	$	778	$	707

Reflected as:
Other current liabilities	$	10	$	24
Asset retirement obligations	768		683
	$	778	$	707

Retirements in 2023 and 2022 relate to settlements of MidAmerican Energy's coal combustion residuals ARO liabilities.

MidAmerican Funding, LLC

Asset Retirement Obligations Disclosure [Line Items]

Asset Retirement Obligations

Refer to Note 11 of MidAmerican Energy's Notes to Financial Statements.

NPC

Asset Retirement Obligations Disclosure [Line Items]

Asset Retirement Obligations

Nevada Power 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 changes in laws and regulations, plan revisions, inflation and changes in the amount and timing of the expected work.

Nevada Power 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 generation, 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 $368 million and $358 million as of December 31, 2023 and 2022, respectively.

The following table presents Nevada Power's ARO liabilities by asset type as of December 31 (in millions):


	2023		2022

Waste water remediation	$	33	$	31
Evaporative ponds and dry ash landfills	12		14

Solar-powered generating facilities	6		3
Other	11		11
Total asset retirement obligations	$	62	$	59

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


	2023		2022

Beginning balance	$	59	$	68
Change in estimated costs	6		5
Additions	3		—
Retirements	(9)		(16)
Accretion	3		2
Ending balance	$	62	$	59

Reflected as:
Other current liabilities	$	9	$	16
Other long-term liabilities	53		43
	$	62	$	59

In 2008, Nevada Power signed an administrative order of consent as owner and operator of Reid Gardner Generating Station Unit Nos. 1, 2 and 3 and as co-owner and operating agent of Unit No. 4. Based on the administrative order of consent, Nevada Power recorded estimated AROs and capital remediation costs. However, actual costs of work under the administrative order of consent may vary significantly once the scope of work is defined and additional site characterization has been completed. In connection with the termination of the co-ownership arrangement, effective October 22, 2013, between Nevada Power and California Department of Water Resources ("CDWR") for the Reid Gardner Generating Station Unit No. 4, Nevada Power and CDWR entered into a cost-sharing agreement that sets forth how the parties will jointly share in costs associated with all investigation, characterization and, if necessary, remedial activities as required under the administrative order of consent.

Certain of Nevada Power's decommissioning and reclamation obligations relate to jointly-owned facilities, and as such, Nevada Power 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. Management has identified legal obligations to retire generation plant assets specified in land leases for Nevada Power's jointly-owned Navajo Generating Station, retired in November 2019, and the Higgins Generating Station. Provisions of the lease require the lessees to remove the facilities upon request of the lessors at the expiration of the leases. Nevada Power's estimated share of the decommissioning and reclamation obligations are primarily recorded as ARO liabilities in other long-term liabilities on the Consolidated Balance Sheets.

SPPC

Asset Retirement Obligations Disclosure [Line Items]

Asset Retirement Obligations

Sierra Pacific 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 changes in laws and regulations, plan revisions, inflation and changes in the amount and timing of the expected work.

Sierra Pacific 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 generation, 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 $211 million and $200 million as of December 31, 2023 and 2022, respectively.

The following table presents Sierra Pacific's ARO liabilities by asset type as of December 31 (in millions):


	2023		2022

Asbestos	$	5	$	5
Evaporative ponds and dry ash landfills	3		3
Solar-powered generating facilities	1		—
Other	3		3
Total asset retirement obligations	$	12	$	11

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


	2023		2022

Beginning balance	$	11	$	11

Additions	1		—


Ending balance	$	12	$	11

Reflected as -

Other long-term liabilities	$	12	$	11

Certain of Sierra Pacific's decommissioning and reclamation obligations relate to jointly-owned facilities, and as such, Sierra Pacific 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. Sierra Pacific's estimated share of the decommissioning and reclamation obligations are primarily recorded as ARO liabilities in other long-term liabilities on the Consolidated Balance Sheets.

EEGH

Asset Retirement Obligations Disclosure [Line Items]

Asset Retirement Obligations

Eastern Energy Gas 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 changes in laws and regulations, plan revisions, inflation and changes in the amount and timing of the expected work.

Eastern Energy Gas 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 the Cove Point LNG facility, interim removal of natural gas pipelines and certain storage wells in EGTS' underground natural gas storage network 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. Cost of removal regulatory liabilities totaled $85 million and $82 million as of December 31, 2023 and 2022, respectively. Eastern Energy Gas will continue to monitor operational and strategic developments to identify if sufficient information exists to reasonably estimate a retirement date for these assets.

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


	2023		2022

Beginning balance	$	48	$	55

Additions	—		4
Retirements	(19)		(12)

Accretion	1		1
Ending balance	$	30	$	48

Reflected as:
Other current liabilities	$	5	$	25
Other long-term liabilities	25		23
Total ARO liability	$	30	$	48

EGTS

Asset Retirement Obligations Disclosure [Line Items]

Asset Retirement Obligations

EGTS 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 changes in laws and regulations, plan revisions, inflation and changes in the amount and timing of the expected work.

EGTS 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 interim removal of natural gas pipelines and certain storage wells in EGTS' underground natural gas storage network 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. Cost of removal regulatory liabilities totaled $28 million and $24 million as of December 31, 2023 and 2022, respectively. EGTS will continue to monitor operational and strategic developments to identify if sufficient information exists to reasonably estimate a retirement date for these assets.

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


	2023		2022

Beginning balance	$	48	$	55

Additions	—		4
Retirements	(19)		(12)
Accretion	1		1
Ending balance	$	30	$	48

Reflected as:
Current liabilities	$	5	$	25
Other long-term liabilities	25		23
Total ARO liability	$	30	$	48