Accounts Receivable

6 Months Ended

Jun. 30, 2017

Receivables [Abstract]

Accounts Receivable

Note 14. Accounts Receivable

Accounts receivable include amounts due under deferred payment arrangements (DPA). A DPA allows the account balance to be paid in installments over an extended period of time, which generally exceeds one year, by negotiating mutually acceptable payment terms and not bearing interest. The utility company generally must continue to serve a customer who cannot pay an account balance in full if the customer (i) pays a reasonable portion of the balance; (ii) agrees to pay the balance in installments; and (iii) agrees to pay future bills within 30 days until the DPA is paid in full. Failure to make payments on a DPA results in the full amount of a receivable under a DPA being due. These accounts are part of the regular operating cycle and are classified as current.

We establish provisions for uncollectible accounts for DPAs by using both historical average loss percentages to project future losses and by establishing specific provisions for known credit issues. Amounts are written off when reasonable collection efforts have been exhausted. DPA receivable balances were $62 million and $54 million at June 30, 2017 and December 31, 2016, respectively. The allowance for doubtful accounts for DPAs at June 30, 2017 and December 31, 2016, was $33 million and $30 million, respectively. Furthermore, the provision for bad debts associated with the DPAs for the three months ended June 30, 2017 and 2016 was $2 million and $0, respectively, and for the six months ended June 30, 2017 and 2016 was $3 million and $(1) million, respectively.