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 balance sheet are presented below (in thousands):



	Amortization Period Ends	December 31, 2016		December 31, 2015
Regulatory assets
Regulatory tax assets (a)	(b)	$	66,670	$	69,359
Loss on reacquired debt (c)	May 2035	15,780		16,632
Final coal reclamation (d)	(e)	9,581		9,520
Nuclear fuel postload daily financing charge	(e)	3,831		4,195
Unrecovered issuance costs due to reissuance of PCBs (c)	August 2042	794		827
Texas energy efficiency	(f)	—		25
Texas 2015 rate case costs	September 2018	2,670		1,882
Texas 2017 rate case costs	(g)	246		—
Texas relate back surcharge	(h)	6,455		—
New Mexico renewable energy credits and related costs (i)	June 2022	6,937		6,397
New Mexico 2010 FPPCAC audit	June 2019	398		434
New Mexico Palo Verde deferred depreciation	(b)	4,415		4,568
New Mexico 2015 rate case costs	June 2019	1,074		1,288
New Mexico 2017 rate case costs	(g)	10		—
Total regulatory assets		$	118,861	$	115,127
Regulatory liabilities
Regulatory tax liabilities (a)	(b)	$	10,648	$	17,266
Accumulated deferred investment tax credit (j)	(b)	3,328		4,011
Texas energy efficiency	(f)	1,288		—
New Mexico energy efficiency	(f)	2,159		2,238
Texas military base discount and recovery factor	(k)	184		788
New Mexico gain on sale of assets (l)	June 2019	828		—
Total regulatory liabilities		$	18,435	$	24,303

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(a)	We do not earn a return on these items since the related accumulated deferred income tax assets and liabilities offset.


(b)	The amortization periods for these assets and liabilities are based upon the life of the associated assets or liabilities.


(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 relates to coal reclamation costs associated with Four Corners. See Part II, Item 8, Financial Statements and Supplementary Data, Note C.


(e)	This item is recovered through fuel recovery mechanisms established by tariffs.


(f)	This item is recovered or credited through a recovery factor that is set annually.


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


(h)	This item relates to the recovery of revenues through a separate surcharge beginning October 1, 2016 and ending September 30, 2017. See Part II, Item 8, Financial Statements and Supplementary Data, Note C.


(i)	This item relates to renewable energy credits and procurement plan costs, components approved for recovery in the New Mexico 2015 rate case.


(j)	This item is excluded from rate base.


(k)	This item represents the net asset/net liability related to the military discount which is recovered from non-military customers through a recovery factor that is set annually.


(l)	This item relates to the gains on the sales of assets the Company shares with its New Mexico customers over a three year period.