Regulatory Assets and Liabilities

The Company's operations are regulated by the PUCT, the NMPRC and the FERC. Regulatory assets represent probable future recovery of previously incurred costs, which will be collected from customers through the ratemaking process. Regulatory liabilities represent probable future reductions in revenues associated with amounts that are to be credited to customers through the ratemaking process. Regulatory assets and liabilities reflected in the Company's consolidated balance sheets are presented below (in thousands):



	Amortization Period Ends	December 31, 2011		December 31, 2010
Regulatory assets
Regulatory tax assets (a)	(b)	$	52,281	$	37,230
Loss on reacquired debt (c)	May 2035	20,044		20,897
Final coal reclamation (a)	July 2016	6,655		10,282
Nuclear fuel postload daily financing charge	(d)	3,470		2,007
Unrecovered issuance costs due to reissuance of PCBs (c)	April 2040	578		599
Texas energy efficiency	(e)	4,497		5,460
Texas 2009 rate case costs (f)	June 2012	1,146		3,298
Texas 2012 rate case costs	(g)	648		—
Texas military base discount and recovery factor	(h)	2,526		761
New Mexico 2009 rate case procurement plan costs (f)	December 2011	—		232
New Mexico procurement plan costs	(g)	139		122
New Mexico 2009 rate case renewable energy credits (f)	December 2011	—		1,139
New Mexico renewable energy credits	(g)	2,884		930
New Mexico 2009 rate case costs (f)	December 2012	253		506
New Mexico 2010 FPPCAC audit	(g)	427		—
New Mexico Palo Verde deferred depreciation	(b)	5,176		4,773
New Mexico energy efficiency	(e)	303		321
Total regulatory assets		$	101,027	$	88,557
Regulatory liabilities
Regulatory tax liabilities (a)	(b)	$	16,138	$	9,326
Accumulated deferred investment tax credit (i)	(b)	4,911		5,163
Total regulatory liabilities		$	21,049	$	14,489

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(a)	No specific return on investment is required since related assets and liabilities, including accumulated deferred income taxes and reclamation liability, offset.


(b)	The amortization period for this asset is based upon the life of the associated assets.


(c)	This item is recovered as a component of the weighted cost of debt and amortized over 30 years beginning in 2005.


(d)	This item is recovered through fuel recovery mechanisms.


(e)	This asset is recovered through an annual recovery factor.


(f)	This item is included in rate base which earns a return on investment.


(g)	Amortization period is anticipated to be established in next general rate case.


(h)	This item represents the net asset related to the military discount which is recovered from non-military customers through a recovery factor.


(i)	This item is excluded from rate base.