Regulatory Matters

Regulatory assets represent costs that are expected to be recovered in future regulated rates. MidAmerican Energy's regulatory assets reflected on the Balance Sheets consist of the following as of December 31 (in millions):



	Average
	Remaining Life	2013		2012

Deferred income taxes, net⁽¹⁾	24 years	$	649	$	640
Asset retirement obligations⁽²⁾	19 years	34		24
Employee benefit plans⁽³⁾	10 years	26		121
Unrealized loss on regulated derivative contracts	1 year	10		50
Other	Various	29		41
Total		$	748	$	876


(1)	Amounts primarily represent income tax benefits related to state accelerated tax depreciation and certain property-related basis differences that were previously flowed through to customers and will be included in regulated rates when the temporary differences reverse.


(2)	Amount predominantly relates to asset retirement obligations for fossil-fueled and wind-powered generating facilities. Refer to Note 12 for a discussion of asset retirement obligations.


(3)	Represents amounts not yet recognized as a component of net periodic benefit cost that are expected to be included in regulated rates when recognized.

MidAmerican Energy had regulatory assets not earning a return on investment of $743 million and $871 million as of December 31, 2013 and 2012, respectively.

Regulatory liabilities represent income to be recognized or amounts to be returned to customers in future periods. MidAmerican Energy's regulatory liabilities reflected on the Balance Sheets consist of the following as of December 31 (in millions):



	Average
	Remaining Life	2013		2012

Cost of removal accrual⁽¹⁾	24 years	$	649	$	629
Asset retirement obligations⁽²⁾	24 years	140		94
Employee benefit plans⁽³⁾	10 years	55		—
Other	Various	31		27
Total		$	875	$	750


(1)	Amounts represent estimated costs, as accrued through depreciation rates and exclusive of ARO liabilities, of removing utility plant in accordance with accepted regulatory practices. Amounts are deducted from rate base or otherwise accrue a carrying cost.


(2)	Amount predominantly represents the excess of nuclear decommission trust assets over the related asset retirement obligation. Refer to Note 12 for a discussion of asset retirement obligations.


(3)	Represents amounts not yet recognized as a component of net periodic benefit cost that are to be returned to customers in future periods when recognized.