Note 4 — Regulatory Assets and Liabilities

Cleco 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 believes these regulatory assets will be fully recoverable; however, if in the future, as a result of regulatory changes or competition, Cleco’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 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 could require discontinuance of the application of the authoritative guidance on regulated operations.

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



(THOUSANDS)	AT MAR. 31, 2018			AT DEC. 31, 2017
Regulatory liabilities - deferred taxes, net	$	(138,329	)	$	(140,426	)
Mining costs	3,186			3,823
Interest costs	4,410			4,499
AROs	2,689			2,762
Postretirement costs	139,822			142,764
Tree trimming costs	7,579			7,193
Training costs	6,513			6,552
Surcredits, net	1,195			2,173
AMI deferred revenue requirement	4,090			4,227
Emergency declarations	4,004			4,131
Production operations and maintenance expenses	7,226			8,625
AFUDC equity gross-up	71,245			71,205
Acadia Unit 1 acquisition costs	2,310			2,336
Financing costs	8,201			8,293
MISO integration costs	234			468
Coughlin transaction costs	961			968
Corporate franchise tax, net	—			153
MATS costs	1,282			2,564
Non-service cost of postretirement benefits	1,037			—
Other	255			484
Total regulatory assets	266,239			273,220
Corporate franchise tax, net	(169		)	—
Accumulated deferred fuel	23,053			13,980
Total regulatory assets, net	$	150,794		$	146,774

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



(THOUSANDS)	AT MAR. 31, 2018		AT DEC. 31, 2017
Total Cleco Power regulatory assets, net	$	150,794	$	146,774
Cleco Merger adjustments ⁽¹⁾
Fair value of long-term debt	145,033		147,145
Postretirement costs	20,878		21,375
Financing costs	8,536		8,623
Debt issuance costs	6,562		6,665
Total Cleco regulatory assets, net	$	331,803	$	330,582

⁽¹⁾Cleco regulatory assets include acquisition accounting adjustments as a result of the Merger.

Non-service Cost of Postretirement Benefits

On January 1, 2018, FASB’s amended guidance related to defined benefit pension and other postretirement plans became effective. The amendment allows only the service cost component of net benefit cost to be eligible for capitalization within property, plant, and equipment. The non-service costs will continue to be capitalized and recovered from ratepayers as approved by FERC. Beginning January 1, 2018, the non-service cost previously eligible for capitalization into property, plant, and equipment will be deferred to a regulatory asset and amortized over the estimated lives of the respective assets. For more information on FASB’s guidance related to defined benefit pension and other postretirement plans, see Note 3 — “Recent Authoritative Guidance.”