Note 3 — Regulatory Assets and Liabilities

Cleco Power capitalizes or defers certain costs for recovery from customers and recognizes a liability for amounts expected to be returned to customers based on regulatory approval and management’s ongoing assessment that it is probable these items will be recovered or refunded through the ratemaking process.

Under the current regulatory environment, Cleco Power believes these regulatory assets will be fully recoverable; however, if in the future, as a result of regulatory changes or competition, Cleco Power’s ability to recover these regulatory assets would no longer be probable, then to the extent that such regulatory assets were determined not to be recoverable, Cleco Power would be required to write-down such assets. In addition, potential deregulation of the industry or possible future changes in the method of rate regulation of Cleco Power could require discontinuance of the application of these authoritative guidelines.

The following table summarizes Cleco Power’s regulatory assets and liabilities:



(THOUSANDS)	AT MAR. 31, 2016			AT DEC. 31, 2015
Regulatory assets – deferred taxes, net	$	237,030		$	236,941
Mining costs	8,284			8,921
Interest costs	5,131			5,221
AROs	1,639			2,462
Postretirement costs	147,823			150,274
Tree trimming costs	5,639			6,318
Training costs	6,824			6,863
Surcredits, net	8,754			9,661
Amended lignite mining agreement contingency	3,781			3,781
AMI deferred revenue requirement	5,181			5,318
Production operations and maintenance expenses	11,088			12,436
AFUDC equity gross-up	71,061			71,444
Acadia Unit 1 acquisition costs	2,521			2,548
Financing costs	8,940			9,032
Biomass costs	42			50
MISO integration costs	2,106			2,340
Coughlin transaction costs	1,022			1,030
Corporate franchise tax	90			373
Acadia FRP true-up	189			377
MATS costs	6,405			—
Other	298			357
Total regulatory assets	296,818			298,806
PPA true-up	(156		)	(312		)
Fuel and purchased power	13,654			12,910
Total regulatory assets, net	$	547,346		$	548,345

MATS Costs

On February 1, 2016, the LPSC approved Cleco Power’s request to recover the revenue requirements associated with the installation of MATS equipment. The MATS rule, finalized in February 2012, required affected EGUs to meet specific emission standards and work practice standards to address hazardous air pollutants by April 16, 2015. The LPSC approval also allowed Cleco Power to record a regulatory asset of $7.1 million representing the unrecovered revenue requirements of the MATS equipment placed into service in the years prior to the LPSC review and approval. This amount is being amortized over three years.