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Regulatory Assets and Liabilities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Matters | Regulatory Matters We had the following regulatory assets and liabilities (in thousands):
__________ (a) Timing of Winter Storm Uri incremental cost recovery and associated carrying costs are subject to pending applications with our utility commissions. See further information below. (b) Recovery of costs, but we are not allowed a rate of return. (c) In addition to recovery of costs, we are allowed a rate of return. (d) In addition to recovery or repayment of costs, we are allowed a return on a portion of this amount or a reduction in rate base. Regulatory Activity Except as discussed below, there have been no other significant changes to our Regulatory Matters from those previously disclosed in Note 2 of the Notes to the Consolidated Financial Statements in our 2020 Annual Report on Form 10-K. Winter Storm Uri In February 2021, a prolonged period of historic cold temperatures across the central United States, which covered all of our Utilities’ service territories, caused a substantial increase in heating and energy demand and contributed to unforeseeable and unprecedented market prices for natural gas and electricity. As a result of Winter Storm Uri, we incurred significant incremental fuel, purchased power and natural gas costs. In the first quarter of 2021, $559 million of incremental costs from Winter Storm Uri were recorded to a regulatory asset. Our Utilities submitted cost recovery applications in our state jurisdictions seeking to recover $546 million in total of these incremental costs through separate tracking mechanisms over a weighted-average recovery period of 3.7 years. These incremental cost estimates are subject to adjustments as final decisions are issued by the respective utility commissions. As part of these applications, we seek approval to recover carrying costs. We are also seeking recovery of $13 million of previously disclosed Winter Storm Uri incremental costs through our existing regulatory mechanisms. In the second quarter of 2021, Nebraska Gas and South Dakota Electric received commission approval on their Winter Storm Uri cost recovery applications. Additionally, Arkansas Gas and Iowa Gas received approval for interim recovery subject to a final decision on carrying costs and recovery periods at a later date. For the three and six months ended June 30, 2021, our Utilities recovered $4.6 million of Winter Storm Uri incremental and carrying costs from customers. TCJA On December 30, 2020, an administrative law judge approved a settlement of Colorado Electric’s plan to provide $9.3 million of TCJA-related bill credits to its customers. The bill credits, which represent a disposition of excess deferred income tax benefits resulting from the TCJA, were delivered to customers in February 2021. The settlement agreement further provided for Colorado Electric to deliver annual bill credits to customers, starting in April 2021, until remaining excess deferred income tax regulatory liabilities associated with the TCJA are fully amortized. In April 2021, Colorado Electric delivered $0.9 million of TCJA-related bill credits to customers. On January 26, 2021, the NPSC approved Nebraska Gas’s plan to provide $2.9 million of TCJA-related bill credits to its customers. The bill credits, which represent a disposition of excess deferred income tax benefits resulting from the TCJA, were delivered to customers in June 2021. These Colorado Electric and Nebraska Gas bill credits, which resulted in a reduction in revenue, were offset by a reduction in income tax expense and resulted in a minimal impact to Net income for the three and six months ended June 30, 2021. Colorado Gas Rate Review On June 1, 2021, Colorado Gas filed a rate review with the CPUC seeking recovery of significant infrastructure investments in its 7,000-mile natural gas pipeline system. The rate review requests $14.6 million in new annual revenue with a capital structure of 50% equity and 50% debt and a return on equity of 9.95%. The request seeks to implement new rates in the first quarter of 2022. On September 11, 2020, in accordance with the final Order from an earlier rate review filed February 1, 2019, Colorado Gas filed a SSIR proposal with the CPUC that would recover safety and integrity focused investments in its system for five years. On July 6, 2021, Colorado Gas received approval from the CPUC for its SSIR proposal that will recover safety and integrity focused investments in its system for three years. The return on SSIR investments will be the current weighted-average cost of long-term debt. Iowa Gas Rate Review On June 1, 2021, Iowa Gas filed a rate review with the IUB seeking recovery of significant infrastructure investments in its 5,000-mile natural gas pipeline system. Additionally, Iowa Gas is seeking to implement a year SSIR that would recover safety and integrity focused investments. The rate review requests shifting $2.2 million of rider revenue to base rates and $8.3 million in additional new annual revenue with a capital structure of 50% equity and 50% debt and a return on equity of 10.15%. Iowa statute allows implementation of interim rates 10 days after filing a rate review and Iowa Gas implemented interim rates effective on June 11, 2021. The request seeks to finalize rates in the first quarter of 2022. Kansas Gas Rate Review On May 7, 2021, Kansas Gas filed a rate review and rider renewal with the KCC seeking recovery of significant infrastructure investments in its 4,600-mile natural gas pipeline system. Additionally, Kansas Gas is seeking renewal of its SSIR. The rate review requests shifting $4.9 million of rider revenue to base rates and $5.3 million in new annual revenue with a capital structure of 50% equity and 50% debt and a return on equity of 10.15%. The request seeks to implement new rates in the first quarter of 2022. Nebraska Gas Jurisdictional Consolidation and Rate Review On January 26, 2021, Nebraska Gas received approval from the NPSC to consolidate rate schedules into a new, single statewide structure and recover infrastructure investments in its 13,000-mile natural gas pipeline system. Final rates were enacted on March 1, 2021, which replaced interim rates effective September 1, 2020. The approval shifted $4.6 million of SSIR revenue to base rates and is expected to generate $6.5 million in new annual revenue with a capital structure of 50% equity and 50% debt and an authorized return on equity of 9.5%. The approval also includes an extension of the SSIR for five years and an expansion of this mechanism across the consolidated jurisdictions.
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