ASSET RETIREMENT OBLIGATIONS

9 Months Ended

Sep. 30, 2014

Asset Retirement Obligation Disclosure [Abstract]

The Company recognizes conditional obligations if such obligations can be reasonably estimated and a legal requirement to perform an asset retirement activity exists. The Company accrues removal costs on certain gas distribution assets over the useful lives of its property, plant and equipment through depreciation expense in accordance with rates approved by the APSC. The Company recorded a conditional asset retirement obligation, on a discounted basis, of $27.7 and $27.5 to purge and cap its gas pipelines upon abandonment and to remediate other related obligations, as a regulatory liability as of September 30, 2014 and December 31, 2013, respectively. Regulatory assets for rate recovery of accumulated asset removal costs of $2.8 and $4.6 as of September 30, 2014 and December 31, 2013, respectively, are included as regulatory assets in noncurrent assets on the balance sheets. The costs associated with asset retirement obligations are either currently being recovered in rates or are probable of recovery in future rates.

The following table presents a reconciliation of the beginning and ending balances of asset retirement obligations at September 30, 2014 and December 31, 2013 as reported in the Balance Sheet:



($ Millions)	September 30, 2014			December 31, 2013
Asset retirement obligations, beginning of year	$	27.5		$	24.9
Liabilities incurred during the period	0.5			0.8
Liabilities settled during the period	(0.1		)	(0.1		)
Accretion	0.7			1.3
Revisions in estimated cash flows	(0.9		)	0.6
Asset retirement obligations, end of year	$	27.7		$	27.5