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, 2012		December 31, 2011
Regulatory assets
Regulatory tax assets (a)	(b)	$	57,551	$	52,281
Loss on reacquired debt (c)	May 2035	19,191		20,044
Final coal reclamation (a)	July 2016	5,473		6,655
Nuclear fuel postload daily financing charge	(d)	3,833		3,470
Unrecovered issuance costs due to reissuance of PCBs (c)	August 2042	926		578
Texas energy efficiency	(e)	536		4,497
Texas 2009 rate case costs (f)	June 2012	—		1,146
Texas 2012 rate case costs (f)	April 2014	2,335		648
Texas military base discount and recovery factor	(h)	2,116		2,526
New Mexico procurement plan costs	(g)	139		139
New Mexico renewable energy credits	(g)	4,033		2,884
New Mexico 2009 rate case costs (f)	December 2012	—		253
New Mexico 2010 FPPCAC audit	(g)	433		427
New Mexico Palo Verde deferred depreciation	(b)	5,024		5,176
New Mexico energy efficiency	(e)	—		303
Total regulatory assets		$	101,590	$	101,027
Regulatory liabilities
Regulatory tax liabilities (a)	(b)	$	16,666	$	16,138
Accumulated deferred investment tax credit (i)	(b)	4,587		4,911
New Mexico energy efficiency	(e)	926		—
Total regulatory liabilities		$	22,179	$	21,049

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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 the life of the related debt issuance.


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


(e)	This item is recovered or credited 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.