Effects of Regulation

12 Months Ended

Dec. 31, 2021

Effects of Regulation

EFFECTS OF REGULATION

The disclosures in this note apply to all Registrants unless indicated otherwise.

Coal-Fired Generation Plants (Applies to AEP, PSO and SWEPCo)

Compliance with extensive environmental regulations requires significant capital investment in environmental monitoring, installation of pollution control equipment, emission fees, disposal costs and permits. Management continuously evaluates cost estimates of complying with these regulations which has resulted in, and in the future may result in, a decision to retire coal-fired generating facilities earlier than their currently estimated useful lives.

Management is seeking or will seek regulatory recovery, as necessary, for any net book value remaining when the plants are retired. To the extent the net book value of these generation assets are not deemed recoverable, it could materially reduce future net income and cash flows and impact financial condition.

Regulated Generating Units that have been Retired

PSO

The Oklaunion Power Station was retired in September 2020 and sold to a nonaffiliated third-party in October 2020. As part of the 2021 Oklahoma Base Rate Case, PSO received approval from the OCC to recover the Oklaunion Power Station as a regulatory asset through 2046. See “2021 Oklahoma Base Rate Case” section of Note 4 for additional information.

SWEPCo

In April 2016, Welsh Plant, Unit 2 was retired. As part of the 2016 Texas Base Rate Case, the PUCT authorized recovery of SWEPCo’s Texas jurisdictional share of Welsh Plant, Unit 2, but denied SWEPCo the ability to earn a return on this investment resulting in a disallowance of $7 million in 2017. See “2016 Texas Base Rate Case” section of Note 4 for additional information. As part of the 2019 Arkansas Base Rate Case, SWEPCo received approval from the APSC to recover the Arkansas jurisdictional share of Welsh Plant, Unit 2. In December 2020, SWEPCo filed a request with the LPSC to recover the Louisiana jurisdictional share of Welsh Plant, Unit 2. See “2020 Louisiana Base Rate Case” section of Note 4 for additional information. As of December 31, 2021, SWEPCo has a regulatory asset for plant retirement costs pending approval recorded on its balance sheet of $35 million related to the Louisiana jurisdictional share of Welsh Plant, Unit 2.

In December 2021, the Dolet Hills Power Station was retired. As part of the 2020 Texas Base Rate Case, the PUCT authorized recovery of SWEPCo’s Texas jurisdictional share of the Dolet Hills Power Station, but denied SWEPCo the ability to earn a return on this investment resulting in a disallowance of $12 million in December 2021. SWEPCo has also requested recovery of the Dolet Hills Power Station in the Arkansas and Louisiana jurisdictions through base rate cases. See “2020 Texas Base Rate Case”, “2020 Louisiana Base Rate Case” and “2021 Arkansas Base Rate Case” sections of Note 4 for additional information. The Dolet Hills Power Station is currently being recovered through 2026 in the Louisiana jurisdiction and through 2046 in the Arkansas and Texas jurisdictions. As of December 31, 2021, SWEPCo has a regulatory asset for the Dolet Hills Power Station pending approval recorded on its balance sheet of $72 million related to the Arkansas and Louisiana jurisdictional shares.

Regulated Generating Units to be Retired

PSO

In 2014, PSO received final approval from the Federal EPA to close Northeastern Plant, Unit 3, in 2026. The plant was originally scheduled to close in 2040. As a result of the early retirement date, PSO revised the useful life of Northeastern Plant, Unit 3, to the projected retirement date of 2026 and the incremental depreciation is being deferred as a regulatory asset. As part of the 2021 Oklahoma Base Rate Case, PSO will continue to recover Northeastern Plant, Unit 3 through 2040. See “2021 Oklahoma Base Rate Case” section of Note 4 for additional information.

SWEPCo

In November 2020, management announced plans to retire Pirkey Power Plant in 2023 and that it will cease using coal at the Welsh Plant in 2028. As a result of the announcement, SWEPCo began recording a regulatory asset for accelerated depreciation.

The table below summarizes the net book value including CWIP, before cost of removal and materials and supplies, as of December 31, 2021, of generating facilities planned for early retirement:

Plant	Net Book Value		Accelerated Depreciation Regulatory Asset		Cost of Removal Regulatory Liability			Projected Retirement Date	Current Authorized Recovery Period	Annual Depreciation (a)
	(dollars in millions)
Northeastern Plant, Unit 3	$	167.2	$	128.1	$	20.0	(b)	2026	(c)	$	14.9
Pirkey Power Plant	120.0		87.0		39.3			2023	(d)	13.5
Welsh Plant, Units 1 and 3	475.2		45.9		58.4		(e)	2028	(f)	36.4

(a)Represents the amount of annual depreciation that has been collected from customers over the prior 12-month period.

(b)Includes Northeastern Plant, Unit 4, which was retired in 2016. Removal of Northeastern Plant, Unit 4, will be performed with Northeastern Plant, Unit 3, after retirement.

(c)Northeastern Plant, Unit 3 is currently being recovered through 2040.

(d)Pirkey Power Plant is currently being recovered through 2025 in the Louisiana jurisdiction and through 2045 in the Arkansas and Texas jurisdictions.

(e)Includes Welsh Plant, Unit 2, which was retired in 2016. Removal of Welsh Plant, Unit 2, will be performed with Welsh Plant, Units 1 and 3, after retirement.

(f)Unit 1 is being recovered through 2027 in the Louisiana jurisdiction and through 2037 in the Arkansas and Texas jurisdictions. Unit 3 is being recovered through 2032 in the Louisiana jurisdiction and through 2042 in the Arkansas and Texas jurisdictions.

Dolet Hills Power Station and Related Fuel Operations (Applies to AEP and SWEPCo)

In 2020, management of SWEPCo and CLECO determined DHLC would not proceed developing additional Oxbow Lignite Company (Oxbow) mining areas for future lignite extraction and ceased extraction of lignite at the mine in May 2020. In April 2020, SWEPCo and CLECO jointly filed a notification letter to the LPSC providing notice of the cessation of lignite mining. In December 2021, the Dolet Hills Power Station was retired.

The Dolet Hills Power Station non-fuel costs are recoverable by SWEPCo through base rates. As of December 31, 2021, SWEPCo’s share of the net investment in the Dolet Hills Power Station is $108 million, including materials and supplies, net of cost of removal collected in rates.

Fuel costs incurred by the Dolet Hills Power Station are recoverable by SWEPCo through active fuel clauses. As of December 31, 2021, SWEPCo had a net under-recovered fuel balance of $144 million, excluding impacts of the February 2021 severe winter weather event, which includes fuel consumed at the Dolet Hills Power Station. Additional reclamation and other land-related costs incurred by DHLC and Oxbow will be billed to SWEPCo and included in existing fuel clauses.

In June 2020, SWEPCo filed a fuel reconciliation with the PUCT for its retail operations in Texas, including Dolet Hills, for the reconciliation period of March 1, 2017 to December 31, 2019. See “2020 Texas Fuel Reconciliation” below for additional information.

In March 2021, the LPSC issued an order allowing SWEPCo to recover up to $20 million of fuel costs in 2021 and defer approximately $30 million of additional costs with a recovery period to be determined at a later date. In November 2021, the LPSC issued a directive which deferred the issues regarding modification of the level and timing of recovery of the Dolet Hills Power Station from SWEPCo’s pending rate case to a separate existing docket. In addition, the recovery of the deferred fuel costs are planned to be addressed.

In March 2021, the APSC approved fuel rates that provide recovery of the Arkansas share of the 2021 Dolet Hills Power Station fuel costs over five years through the existing fuel clause. In the Arkansas base case, Staff proposed an extension of the recovery period to 25 years. See “2021 Arkansas Base Rate Case” section of Note 4 for additional information.

If any of these costs are not recoverable, it could reduce future net income and cash flows and impact financial condition.

Pirkey Power Plant and Related Fuel Operations (Applies to AEP and SWEPCo)

In 2020, management announced plans to retire the Pirkey Power Plant in 2023. The Pirkey Power Plant non-fuel costs are recoverable by SWEPCo through base rates and fuel costs are recovered through active fuel clauses. As of December 31, 2021, SWEPCo’s share of the net investment in the Pirkey Power Plant is $207 million, including CWIP, before cost of removal. Sabine is a mining operator providing mining services to the Pirkey Power Plant. Under the provisions of the mining agreement, SWEPCo is required to pay, as part of the cost of lignite delivered, an amount equal to mining costs plus a management fee. SWEPCo expects fuel deliveries, including billings of all fixed and operating costs, from Sabine to cease during the first quarter of 2023. Under the fuel agreements, SWEPCo’s fuel inventory and unbilled fuel costs from mining related activities were $91 million as of December 31, 2021. Also, as of December 31, 2021, SWEPCo had a net under-recovered fuel balance of $144 million, excluding impacts of the February 2021 severe winter weather event, which includes fuel consumed at the Pirkey Power Plant. Additional operational, reclamation and other land-related costs incurred by Sabine will be billed to SWEPCo and included in existing fuel clauses. If any of these costs are not recoverable, it could reduce future net income and cash flows and impact financial condition.

2020 Texas Fuel Reconciliation (Applies to AEP and SWEPCo)

In June 2020, SWEPCo filed a fuel reconciliation with the PUCT for its retail operations in Texas for the reconciliation period of March 1, 2017 to December 31, 2019. The fuel reconciliation included total fuel costs of $1.7 billion ($616 million of which is related to the Texas jurisdiction). In January 2021, various parties filed testimony recommending fuel cost disallowances totaling $125 million relating to the Texas jurisdiction. Also in January 2021, SWEPCo filed rebuttal testimony disputing the recommended disallowances. In February 2021, SWEPCo and various parties reached a settlement in principle which resulted in a $10 million reduction in recoverable fuel costs for the reconciliation period, which was recognized in SWEPCo’s 2020 financial statements. In November 2021, the settlement was approved by the PUCT.

Regulatory Assets and Liabilities

Regulatory assets and liabilities are comprised of the following items:

	AEP
	December 31,				Remaining Recovery Period
	2021 (a)		2020
Current Regulatory Assets	(in millions)
Under-recovered Fuel Costs - earns a return	$	409.4	$	41.4	1 year
Under-recovered Fuel Costs - does not earn a return	175.7		49.3		1 year
Unrecovered Winter Storm Fuel Costs - earns a return (b)	62.7		—		1 year
Total Current Regulatory Assets	$	647.8	$	90.7
Noncurrent Regulatory Assets
Regulatory assets pending final regulatory approval:
Regulatory Assets Currently Earning a Return
Unrecovered Winter Storm Fuel Costs	$	367.5	$	—
Pirkey Power Plant Accelerated Depreciation	87.0		12.2
Dolet Hills Power Station Accelerated Depreciation	72.3		71.2
Welsh Plant, Units 1 and 3 Accelerated Depreciation	45.9		3.6
Plant Retirement Costs - Unrecovered Plant, Louisiana	35.2		35.2
Dolet Hills Power Station Fuel Costs - Louisiana	30.9		—
Kentucky Deferred Purchased Power Expenses	—		41.3
Oklaunion Power Station Accelerated Depreciation	—		34.4
Other Regulatory Assets Pending Final Regulatory Approval	9.2		22.8
Total Regulatory Assets Currently Earning a Return	648.0		220.7
Regulatory Assets Currently Not Earning a Return
Storm-Related Costs	256.9		134.2
Plant Retirement Costs - Asset Retirement Obligation Costs	25.9		25.9
COVID-19	11.2		24.9
Other Regulatory Assets Pending Final Regulatory Approval	43.9		36.5
Total Regulatory Assets Currently Not Earning a Return	337.9		221.5
Total Regulatory Assets Pending Final Regulatory Approval	985.9		442.2
Regulatory assets approved for recovery:
Regulatory Assets Currently Earning a Return
Unrecovered Winter Storm Fuel Costs	679.3		—		(c)
Plant Retirement Costs - Unrecovered Plant (d)	522.2		713.1		25 years
Rockport Plant Dry Sorbent Injection System and Selective Catalytic Reduction	66.6		34.4		7 years
Meter Replacement Costs	44.9		55.5		6 years
Ohio Distribution Decoupling	41.6		46.6		2 years
Environmental Control Projects	36.2		38.6		19 years
Cook Plant Uprate Project	27.7		30.2		12 years
Storm-Related Costs	17.4		11.5		3 years
Plant Retirement Costs - Asset Retirement Obligation Costs	—		107.1
Other Regulatory Assets Approved for Recovery	99.2		94.4		various
Total Regulatory Assets Currently Earning a Return	1,535.1		1,131.4
Regulatory Assets Currently Not Earning a Return
Pension and OPEB Funded Status	677.0		1,088.6		12 years
Plant Retirement Costs - Asset Retirement Obligation Costs	293.2		212.7		21 years
Unamortized Loss on Reacquired Debt	111.2		120.0		27 years
Unrealized Loss on Forward Commitments	100.8		111.3		11 years
Plant Retirement Costs - Unrecovered Plant, Texas	51.9		16.1		25 years
Peak Demand Reduction/Energy Efficiency	40.8		27.0		5 years
Virginia Transmission Rate Adjustment Clause	37.2		18.8		2 years
Cook Plant Nuclear Refueling Outage Levelization	32.0		39.5		3 years
Texas Transmission Cost Recovery Factor	30.6		4.6		2 years
Vegetation Management	29.3		67.8		4 years
Postemployment Benefits	29.1		29.1		3 years
PJM/SPP Annual Formula Rate True-up	17.6		33.0		2 years
Fuel and Purchased Power Adjustment Rider	12.1		24.0		2 years
OVEC Purchased Power	—		27.4
Other Regulatory Assets Approved for Recovery	158.5		133.5		various
Total Regulatory Assets Currently Not Earning a Return	1,621.3		1,953.4
Total Regulatory Assets Approved for Recovery	3,156.4		3,084.8
Total Noncurrent Regulatory Assets	$	4,142.3	$	3,527.0

(a)2021 amounts exclude $485 million of regulatory assets classified as Assets Held for Sale on the balance sheet. See “Disposition of KPCo and KTCo” section of Note 7 for additional information.

(b)Unrecovered Winter Storm Fuel Costs are pending final regulatory approval as of December 31, 2021. The current asset balance represents amounts expected to be recovered in the Arkansas and Louisiana jurisdictions over the next 12 months. See “February 2021 Severe Winter Weather Impacts in SPP” section of SWEPCo Rate Matters in Note 4 for additional information.

(c)In February 2022, the OCC approved PSO’s securitization of the Unrecovered Winter Storm Fuel Costs. The timing of securitization is to be determined. See ”February 2021 Severe Winter Weather Impacts in SPP” section of PSO Rate Matters in Note 4 for additional information.

(d)Northeastern Plant, Unit 3 is approved for recovery through 2040, but expected to retire in 2026. PSO records a regulatory asset for accelerated depreciation. See “Regulated Generating Units to be Retired” section above for additional information.

	AEP
	December 31,				Remaining
	2021 (a)		2020		Refund Period
Current Regulatory Liabilities	(in millions)
Over-recovered Fuel Costs - pays a return	$	—	$	27.6
Over-recovered Fuel Costs - does not pay a return	1.5		25.0		1 year
Total Current Regulatory Liabilities	$	1.5	$	52.6
Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits
Regulatory liabilities pending final regulatory determination:
Regulatory Liabilities Currently Paying a Return
Other Regulatory Liabilities Pending Final Regulatory Determination	$	—	$	2.5
Total Regulatory Liabilities Currently Paying a Return	—		2.5
Regulatory Liabilities Currently Not Paying a Return
Other Regulatory Liabilities Pending Final Regulatory Determination	0.2		1.5
Total Regulatory Liabilities Currently Not Paying a Return	0.2		1.5
Income Tax Related Regulatory Liabilities (b)
Excess ADIT Associated with Certain Depreciable Property	—		291.6
Excess ADIT that is Not Subject to Rate Normalization Requirements (c) (d)	262.2		193.3
Total Income Tax Related Regulatory Liabilities	262.2		484.9
Total Regulatory Liabilities Pending Final Regulatory Determination	262.4		488.9
Regulatory liabilities approved for payment:
Regulatory Liabilities Currently Paying a Return
Asset Removal Costs	3,172.1		3,061.9		(e)
Deferred Investment Tax Credits	2.1		4.1		32 years
Other Regulatory Liabilities Approved for Payment	33.1		25.2		various
Total Regulatory Liabilities Currently Paying a Return	3,207.3		3,091.2
Regulatory Liabilities Currently Not Paying a Return
Excess Nuclear Decommissioning Funding	1,939.7		1,476.6		(f)
Deferred Investment Tax Credits	248.5		216.7		35 years
Spent Nuclear Fuel	49.5		43.1		(f)
PJM Transmission Enhancement Refund	42.9		56.2		4 years
2017-2019 Virginia Triennial Revenue Provision	41.6		44.2		27 years
Unrealized Gain on Forward Commitments	37.2		11.7		3 years
Peak Demand Reduction/Energy Efficiency	28.6		26.3		2 years
Transition and Restoration Charges - Texas	26.3		48.2		8 years
Other Regulatory Liabilities Approved for Payment	90.9		82.9		various
Total Regulatory Liabilities Currently Not Paying a Return	2,505.2		2,005.9
Income Tax Related Regulatory Liabilities (b)
Excess ADIT Associated with Certain Depreciable Property	3,556.7		3,485.7		(g)
Excess ADIT that is Not Subject to Rate Normalization Requirements	386.5		714.9		7 years
Income Taxes Subject to Flow Through	(1,231.8)		(1,407.9)		52 years
Total Income Tax Related Regulatory Liabilities	2,711.4		2,792.7
Total Regulatory Liabilities Approved for Payment	8,423.9		7,889.8
Total Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits	$	8,686.3	$	8,378.7

(a)2021 amounts exclude $148 million of regulatory liabilities classified as Liabilities Held for Sale on the balance sheet. See “Disposition of KPCo and KTCo” section of Note 7 for additional information.

(b)Predominately pays a return due to the inclusion of Excess ADIT in rate base.

(c)2021 and 2020 amounts include approximately $173 million and $173 million, respectively, related to AEP Transmission Holdco’s investment in ETT and Transource Energy.  AEP Transmission Holdco expects to amortize the balance commensurate with the return of Excess ADIT to ETT and Transource Energy’s customers.

(d)2021 amount includes $70 million for Excess ADIT as a result of changes in various state income tax rates. See the “Federal and State Tax Legislation” section of Note 12 for additional information.

(e)Relieved as removal costs are incurred.

(f)Relieved when plant is decommissioned.

(g)Refunded using ARAM.

	AEP Texas
	December 31,				Remaining Recovery Period
Regulatory Assets:	2021		2020
	(in millions)
Noncurrent Regulatory Assets
Regulatory assets pending final regulatory approval:
Regulatory Assets Currently Earning a Return
Advanced Metering System	$	—	$	16.3
Total Regulatory Assets Currently Earning a Return	—		16.3
Regulatory Assets Currently Not Earning a Return
Storm-Related Costs	22.4		0.8
Vegetation Management Program	5.2		3.8
Texas Retail Electric Provider Bad Debt Expense	4.1		—
COVID-19	2.1		10.5
Other Regulatory Assets Pending Final Regulatory Approval	7.4		1.5
Total Regulatory Assets Currently Not Earning a Return	41.2		16.6
Total Regulatory Assets Pending Final Regulatory Approval	41.2		32.9
Regulatory assets approved for recovery:
Regulatory Assets Currently Earning a Return
Meter Replacement Costs	22.7		29.3		5 years
Advanced Metering System	10.6		—		1 year
Other Regulatory Assets Approved for Recovery	2.1		—		various
Total Regulatory Assets Currently Earning a Return	35.4		29.3
Regulatory Assets Currently Not Earning a Return
Pension and OPEB Funded Status	119.0		145.0		12 years
Texas Transmission Cost Recovery Factor	30.6		4.6		2 years
Vegetation Management Program	17.4		22.4		4 years
Peak Demand Reduction/Energy Efficiency	14.5		7.7		2 years
Storm-Related Costs	12.8		17.1		3 years
Other Regulatory Assets Approved for Recovery	4.3		7.8		various
Total Regulatory Assets Currently Not Earning a Return	198.6		204.6
Total Regulatory Assets Approved for Recovery	234.0		233.9
Total Noncurrent Regulatory Assets	$	275.2	$	266.8

	AEP Texas
	December 31,				Remaining Refund Period
Regulatory Liabilities:	2021		2020
	(in millions)
Noncurrent Regulatory Liabilities and
Deferred Investment Tax Credits
Regulatory liabilities pending final regulatory determination:
Regulatory Liabilities Currently Paying a Return
Other Regulatory Liabilities Pending Final Regulatory Determination	$	—	$	2.5
Total Regulatory Liabilities Currently Paying a Return	—		2.5
Income Tax Related Regulatory Liabilities (a)
Excess ADIT that is Not Subject to Rate Normalization Requirements	13.0		(8.2)
Total Income Tax Related Regulatory Liabilities	13.0		(8.2)
Total Regulatory Liabilities Pending Final Regulatory Determination	13.0		(5.7)
Regulatory liabilities approved for payment:
Regulatory Liabilities Currently Paying a Return
Asset Removal Costs	744.7		718.3		(b)
Other Regulatory Liabilities Approved for Payment	4.8		5.3		various
Total Regulatory Liabilities Currently Paying a Return	749.5		723.6
Regulatory Liabilities Currently Not Paying a Return
Transition and Restoration Charges	26.3		48.2		8 years
Deferred Investment Tax Credits	6.8		8.5		12 years
Other Regulatory Liabilities Approved for Payment	1.1		1.2		various
Total Regulatory Liabilities Currently Not Paying a Return	34.2		57.9
Income Tax Related Regulatory Liabilities (a)
Excess ADIT Associated with Certain Depreciable Property	498.8		506.0		(c)
Excess ADIT that is Not Subject to Rate Normalization Requirements	—		41.7
Income Taxes Subject to Flow Through	(53.5)		(52.7)		35 years
Total Income Tax Related Regulatory Liabilities	445.3		495.0
Total Regulatory Liabilities Approved for Payment	1,229.0		1,276.5
Total Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits	$	1,242.0	$	1,270.8

(a)Predominately pays a return due to the inclusion of Excess ADIT in rate base.

(b)Relieved as removal costs are incurred.

(c)Refunded using ARAM.

	AEPTCo
	December 31,				Remaining Recovery Period
Regulatory Assets:	2021		2020
	(in millions)
Noncurrent Regulatory Assets
Regulatory assets approved for recovery:
Regulatory Assets Currently Not Earning a Return
PJM/SPP Annual Formula Rate True-up	$	8.5	$	15.1	2 years
Total Regulatory Assets Approved for Recovery	8.5		15.1
Total Noncurrent Regulatory Assets	$	8.5	$	15.1

	AEPTCo
	December 31,				Remaining Refund Period
Regulatory Liabilities:	2021 (a)		2020
	(in millions)
Noncurrent Regulatory Liabilities
Regulatory liabilities pending final regulatory determination:
Income Tax Related Regulatory Liabilities (b)
Excess ADIT that is Not Subject to Rate Normalization Requirements (c)	$	8.7	$	—
Total Regulatory Liabilities Pending Final Regulatory Determination	8.7		—
Regulatory liabilities approved for payment:
Regulatory Liabilities Currently Paying a Return
Asset Removal Costs	271.4		198.6		(d)
Total Regulatory Liabilities Currently Paying a Return	271.4		198.6
Income Tax Related Regulatory Liabilities (b)
Excess ADIT Associated with Certain Depreciable Property	522.6		531.5		(e)
Excess ADIT that is Not Subject to Rate Normalization Requirements	(26.2)		(30.6)		7 years
Income Taxes Subject to Flow Through	(132.4)		(117.7)		36 years
Total Income Tax Related Regulatory Liabilities	364.0		383.2
Total Regulatory Liabilities Approved for Payment	635.4		581.8
Total Noncurrent Regulatory Liabilities	$	644.1	$	581.8

(a)2021 amounts exclude $8 million of regulatory liabilities classified as Liabilities Held for Sale on the balance sheet. See “Disposition of KPCo and KTCo” section of Note 7 for additional information.

(b)Predominately pays a return due to the inclusion of Excess ADIT in rate base.

(c)Amount represents regulatory liabilities for Excess ADIT as a result of changes in various state income tax rates. See the “Federal and State Tax Legislation” section of Note 12 for additional information.

(d)Relieved as removal costs are incurred.

(e)Refunded using ARAM.

	APCo
	December 31,				Remaining Recovery Period
Regulatory Assets:	2021		2020
	(in millions)
Current Regulatory Assets
Under-recovered Fuel Costs - earns a return	$	127.2	$	3.3	1 year
Under-recovered Fuel Costs - does not earn a return	74.1		2.0		1 year
Total Current Regulatory Assets	$	201.3	$	5.3
Noncurrent Regulatory Assets
Regulatory assets pending final regulatory approval:
Regulatory Assets Currently Earning a Return
COVID-19 - Virginia	$	6.8	$	3.7
Total Regulatory Assets Currently Earning a Return	6.8		3.7
Regulatory Assets Currently Not Earning a Return
Storm-Related Costs	68.8		3.4
Plant Retirement Costs - Asset Retirement Obligation Costs	25.9		25.9
Environmental Expense Deferral - Virginia	—		9.3
Other Regulatory Assets Pending Final Regulatory Approval	3.6		1.5
Total Regulatory Assets Currently Not Earning a Return	98.3		40.1
Total Regulatory Assets Pending Final Regulatory Approval	105.1		43.8
Regulatory assets approved for recovery:
Regulatory Assets Currently Earning a Return
Plant Retirement Costs - Unrecovered Plant	110.0		122.4		22 years
Other Regulatory Assets Approved for Recovery	0.4		1.0		various
Total Regulatory Assets Currently Earning a Return	110.4		123.4
Regulatory Assets Currently Not Earning a Return
Plant Retirement Costs - Asset Retirement Obligation Costs	293.1		202.7		15 years
Unamortized Loss on Reacquired Debt	78.2		82.1		24 years
Pension and OPEB Funded Status	62.7		114.4		12 years
Virginia Transmission Rate Adjustment Clause	37.2		18.8		2 years
Peak Demand Reduction/Energy Efficiency	17.8		16.8		5 years
Environmental Compliance Costs	13.7		—		2 years
Postemployment Benefits	13.3		13.5		3 years
Vegetation Management Program - West Virginia	11.9		45.4		2 years
PJM Annual Formula Rate True-up	3.5		12.7		2 years
Other Regulatory Assets Approved for Recovery	10.7		12.7		various
Total Regulatory Assets Currently Not Earning a Return	542.1		519.1
Total Regulatory Assets Approved for Recovery	652.5		642.5
Total Noncurrent Regulatory Assets	$	757.6	$	686.3

	APCo
	December 31,				Remaining Refund Period
Regulatory Liabilities:	2021		2020
	(in millions)
Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits
Regulatory liabilities pending final regulatory determination:
Income Tax Related Regulatory Liabilities (a)
Excess ADIT that is Not Subject to Rate Normalization Requirements (b)	$	4.5	$	—
Total Regulatory Liabilities Pending Final Regulatory Determination	4.5		—
Regulatory liabilities approved for payment:
Regulatory Liabilities Currently Paying a Return
Asset Removal Costs	703.3		678.9		(c)
Deferred Investment Tax Credits	0.3		0.3		32 years
Total Regulatory Liabilities Currently Paying a Return	703.6		679.2
Regulatory Liabilities Currently Not Paying a Return
2017-2019 Virginia Triennial Revenue Provision	41.6		44.2		27 years
Unrealized Gain on Forward Commitments	28.2		5.5		3 years
PJM Transmission Enhancement Refund	13.0		16.3		4 years
Other Regulatory Liabilities Approved for Payment	15.0		6.8		various
Total Regulatory Liabilities Currently Not Paying a Return	97.8		72.8
Income Tax Related Regulatory Liabilities (a)
Excess ADIT Associated with Certain Depreciable Property	663.6		690.0		(d)
Excess ADIT that is Not Subject to Rate Normalization Requirements	83.6		139.1		7 years
Income Taxes Subject to Flow Through	(314.3)		(356.4)		23 years
Total Income Tax Related Regulatory Liabilities	432.9		472.7
Total Regulatory Liabilities Approved for Payment	1,234.3		1,224.7
Total Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits	$	1,238.8	$	1,224.7

(a)Predominately pays a return due to the inclusion of Excess ADIT in rate base.

(b)Amount represents regulatory liabilities for Excess ADIT as a result of a change in the state income tax apportionment formula in West Virginia. See the “Federal and State Tax Legislation” section of Note 12 for additional information.

(c)Relieved as removal costs are incurred.

(d)Refunded using ARAM.

	I&M
	December 31,				Remaining Recovery Period
Regulatory Assets:	2021		2020
	(in millions)
Current Regulatory Assets
Under-recovered Fuel Costs, Michigan - earns a return	$	6.4	$	5.4	1 year
Total Current Regulatory Assets	$	6.4	$	5.4
Noncurrent Regulatory Assets
Regulatory assets pending final regulatory approval:
Regulatory Assets Currently Earning a Return
Other Regulatory Assets Pending Final Regulatory Approval	$	0.1	$	0.5
Total Regulatory Assets Currently Earning a Return	0.1		0.5
Regulatory Assets Currently Not Earning a Return
COVID-19	1.7		3.8
Other Regulatory Assets Pending Final Regulatory Approval	1.9		—
Total Regulatory Assets Currently Not Earning a Return (a)	3.6		3.8
Total Regulatory Assets Pending Final Regulatory Approval	3.7		4.3
Regulatory assets approved for recovery:
Regulatory Assets Currently Earning a Return
Plant Retirement Costs - Unrecovered Plant	170.8		191.5		7 years
Rockport Plant Dry Sorbent Injection System and Selective Catalytic Reduction	66.6		34.4		7 years
Cook Plant Uprate Project	27.7		30.2		12 years
Deferred Cook Plant Life Cycle Management Project Costs	13.1		14.1		13 years
Cook Plant Turbine	9.7		11.1		17 years
Cook Plant Study Costs - Indiana	9.4		10.1		14 years
Other Regulatory Assets Approved for Recovery	6.0		7.0		various
Total Regulatory Assets Currently Earning a Return	303.3		298.4
Regulatory Assets Currently Not Earning a Return
Cook Plant Nuclear Refueling Outage Levelization	32.0		39.5		3 years
PJM Costs and Off-system Sales Margin Sharing - Indiana	15.1		—		2 years
Unamortized Loss on Reacquired Debt	14.2		15.7		27 years
Storm-Related Costs - Indiana	12.6		0.3		2 years
Postemployment Benefits	9.0		4.9		3 years
Unrealized Loss on Forward Commitments	7.2		—		3 years
Pension and OPEB Funded Status	—		25.7
Other Regulatory Assets Approved for Recovery	13.8		16.0		various
Total Regulatory Assets Currently Not Earning a Return	103.9		102.1
Total Regulatory Assets Approved for Recovery	407.2		400.5
Total Noncurrent Regulatory Assets	$	410.9	$	404.8

(a)In February 2022, the IURC issued an order approving Indiana jurisdictional COVID-19 costs and certain other regulatory assets totaling $3 million. See “2021 Indiana Base Rate Case” section of Note 4 for additional information.

	I&M
	December 31,				Remaining Refund Period
Regulatory Liabilities:	2021		2020
	(in millions)
Current Regulatory Liabilities
Over-recovered Fuel Costs, Indiana - does not pay a return	$	1.5	$	20.8	1 year
Total Current Regulatory Liabilities	$	1.5	$	20.8
Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits
Regulatory liabilities approved for payment:
Regulatory Liabilities Currently Paying a Return
Asset Removal Costs	$	179.7	$	168.2	(a)
Other Regulatory Liabilities Approved for Payment	21.9		17.4		various
Total Regulatory Liabilities Currently Paying a Return	201.6		185.6
Regulatory Liabilities Currently Not Paying a Return
Excess Nuclear Decommissioning Funding	1,939.7		1,476.6		(b)
Spent Nuclear Fuel	49.5		43.1		(b)
Pension OPEB Funded Status	27.6		—		12 years
Deferred Investment Tax Credits	22.4		21.3		29 years
Rockport Plant, Unit 2 Selective Catalytic Reduction	10.6		8.9		2 years
PJM Transmission Enhancement Refund	7.9		9.9		4 years
PJM Costs and Off-system Sales Margin Sharing - Indiana	—		13.3
Other Regulatory Liabilities Approved for Payment	6.0		28.4		various
Total Regulatory Liabilities Currently Not Paying a Return	2,063.7		1,601.5
Income Tax Related Regulatory Liabilities (c)
Excess ADIT Associated with Certain Depreciable Property	433.6		450.6		(d)
Excess ADIT that is Not Subject to Rate Normalization Requirements	90.2		136.2		3 years
Income Taxes Subject to Flow Through	(341.2)		(332.0)		20 years
Total Income Tax Related Regulatory Liabilities	182.6		254.8
Total Regulatory Liabilities Approved for Payment	2,447.9		2,041.9
Total Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits	$	2,447.9	$	2,041.9

(a)Relieved as removal costs are incurred.

(b)Relieved when plant is decommissioned.

(c)Predominately pays a return due to the inclusion of Excess ADIT in rate base.

(d)Refunded using ARAM.

	OPCo
	December 31,				Remaining Recovery Period
Regulatory Assets:	2021		2020
	(in millions)
Noncurrent Regulatory Assets
Regulatory assets pending final regulatory approval:
Regulatory Assets Currently Not Earning a Return
Storm-Related Costs	$	3.8	$	4.0
COVID-19	—		4.4
Total Regulatory Assets Pending Final Regulatory Approval	3.8		8.4
Regulatory assets approved for recovery:
Regulatory Assets Currently Earning a Return
Ohio Distribution Decoupling	41.6		46.6		2 years
Ohio Economic Development Rider	10.1		1.3		2 years
Ohio Basic Transmission Cost Rider	5.2		12.3		2 years
Total Regulatory Assets Currently Earning a Return	56.9		60.2
Regulatory Assets Currently Not Earning a Return
Unrealized Loss on Forward Commitments	92.1		110.0		11 years
Pension and OPEB Funded Status	83.3		130.7		12 years
Smart Grid Costs	19.3		19.2		2 years
Ohio Enhanced Service Reliability Plan	9.5		—		2 years
PJM Load Service Entity Formula Rate True-up	7.5		—		2 years
Postemployment Benefits	6.2		6.7		3 years
Distribution Investment Rider	2.1		7.4		2 years
OVEC Purchased Power	—		27.4
Other Regulatory Assets Approved for Recovery	12.3		15.8		various
Total Regulatory Assets Currently Not Earning a Return	232.3		317.2
Total Regulatory Assets Approved for Recovery	289.2		377.4
Total Noncurrent Regulatory Assets	$	293.0	$	385.8

	OPCo
	December 31,				Remaining Refund Period
	2021		2020
Regulatory Liabilities:	(in millions)
Current Regulatory Liabilities
Over-recovered Fuel Costs - does not pay a return	$	—	$	3.9
Total Current Regulatory Liabilities	$	—	$	3.9
Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits
Regulatory liabilities pending final regulatory determination:
Regulatory Liabilities Currently Not Paying a Return
Other Regulatory Liabilities Pending Final Regulatory Determination	$	0.2	$	0.2
Total Regulatory Liabilities Pending Final Regulatory Determination	0.2		0.2
Regulatory liabilities approved for payment:
Regulatory Liabilities Currently Paying a Return
Asset Removal Costs	467.6		458.4		(a)
Total Regulatory Liabilities Currently Paying a Return	467.6		458.4
Regulatory Liabilities Currently Not Paying a Return
Peak Demand Reduction/Energy Efficiency	22.5		19.9		2 years
PJM Transmission Enhancement Refund	19.6		24.5		4 years
Over-recovered Fuel Costs	15.2		—		11 years
OVEC Purchased Power	14.8		—		2 years
Ohio Enhanced Service Reliability Plan	—		5.7
Other Regulatory Liabilities Approved for Payment	0.4		0.7		various
Total Regulatory Liabilities Currently Not Paying a Return	72.5		50.8
Income Tax Related Regulatory Liabilities (b)
Excess ADIT Associated with Certain Depreciable Property	325.0		334.6		(c)
Excess ADIT that is Not Subject to Rate Normalization Requirements	190.8		223.9		7 years
Income Taxes Subject to Flow Through	(35.2)		(62.7)		30 years
Total Income Tax Related Regulatory Liabilities	480.6		495.8
Total Regulatory Liabilities Approved for Payment	1,020.7		1,005.0
Total Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits	$	1,020.9	$	1,005.2

(a)Relieved as removal costs are incurred.

(b)Predominately pays a return due to the inclusion of Excess ADIT in rate base.

(c)Refunded using ARAM.

	PSO
	December 31,				Remaining Recovery Period
	2021		2020
Regulatory Assets:	(in millions)
Current Regulatory Assets
Under-recovered Fuel Costs - earns a return	$	194.6	$	30.1	1 year
Total Current Regulatory Assets	$	194.6	$	30.1
Noncurrent Regulatory Assets
Regulatory assets pending final regulatory approval:
Regulatory Assets Currently Earning a Return
Oklaunion Power Station Accelerated Depreciation	$	—	$	34.4
Total Regulatory Assets Currently Earning a Return	—		34.4
Regulatory Assets Currently Not Earning a Return
Storm-Related Costs	13.9		15.8
COVID-19	0.3		0.3
Total Regulatory Assets Currently Not Earning a Return	14.2		16.1
Total Regulatory Assets Pending Final Regulatory Approval	14.2		50.5
Regulatory assets approved for recovery:
Regulatory Assets Currently Earning a Return
Unrecovered Winter Storm Fuel Costs	679.3		—		(a)
Plant Retirement Costs - Unrecovered Plant (b)	227.6		180.8		25 years
Environmental Control Projects	25.2		26.5		19 years
Meter Replacement Costs	22.2		26.2		6 years
Storm-Related Costs	17.4		11.5		3 years
Red Rock Generating Facility	7.9		8.2		35 years
Other Regulatory Assets Approved for Recovery	1.9		0.5		various
Total Regulatory Assets Currently Earning a Return	981.5		253.7
Regulatory Assets Currently Not Earning a Return
Pension and OPEB Funded Status	22.9		52.3		12 years
Unamortized Loss on Reacquired Debt	5.7		6.1		17 years
Other Regulatory Assets Approved for Recovery	13.1		12.4		various
Total Regulatory Assets Currently Not Earning a Return	41.7		70.8
Total Regulatory Assets Approved for Recovery	1,023.2		324.5
Total Noncurrent Regulatory Assets	$	1,037.4	$	375.0

(a)In February 2022, the OCC approved PSO’s securitization of the Unrecovered Winter Storm Fuel Costs. The timing of securitization is to be determined. See ”February 2021 Severe Winter Weather Impacts in SPP” section of PSO Rate Matters in Note 4 for additional information.

(b)Northeastern Plant, Unit 3 is approved for recovery through 2040, but expected to retire in 2026. PSO records a regulatory asset for accelerated depreciation. See “Regulated Generating Units to be Retired” section above for additional information.

	PSO
	December 31,				Remaining Refund Period
	2021		2020
Regulatory Liabilities:	(in millions)
Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits
Regulatory liabilities pending final regulatory determination:
Income Tax Related Regulatory Liabilities (a)
Excess ADIT that is Not Subject to Rate Normalization Requirements (b)	$	56.2	$	—
Total Regulatory Liabilities Pending Final Regulatory Determination	$	56.2	$	—
Regulatory liabilities approved for payment:
Regulatory Liabilities Currently Paying a Return
Asset Removal Costs	$	300.2	$	289.9	(c)
Total Regulatory Liabilities Currently Paying a Return	300.2		289.9
Regulatory Liabilities Currently Not Paying a Return
Deferred Investment Tax Credits	50.8		51.0		23 years
Other Regulatory Liabilities Approved for Payment	4.3		1.3		various
Total Regulatory Liabilities Currently Not Paying a Return	55.1		52.3
Income Tax Related Regulatory Liabilities (a)
Excess ADIT Associated with Certain Depreciable Property	389.3		397.0		(d)
Excess ADIT that is Not Subject to Rate Normalization Requirements	46.4		71.3		3 years
Income Taxes Subject to Flow Through	(11.9)		(8.3)		28 years
Total Income Tax Related Regulatory Liabilities	423.8		460.0
Total Regulatory Liabilities Approved for Payment	779.1		802.2
Total Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits	$	835.3	$	802.2

(a)Predominately pays a return due to the inclusion of Excess ADIT in rate base.

(b)Amount represents regulatory liabilities for Excess ADIT as a result of a change in the state income tax rate. See the “Federal and State Tax Legislation” section of Note 12 for additional information.

(c)Relieved as removal costs are incurred.

(d)Refunded using ARAM.

	SWEPCo
	December 31,				Remaining Recovery Period
	2021		2020
Regulatory Assets:	(in millions)
Current Regulatory Assets
Under-recovered Fuel Costs - earns a return (a)	$	81.2	$	2.6	1 year
Unrecovered Winter Storm Fuel Costs - earns a return (b)	62.7		—		1 year
Total Current Regulatory Assets	$	143.9	$	2.6
Noncurrent Regulatory Assets
Regulatory assets pending final regulatory approval:
Regulatory Assets Currently Earning a Return
Unrecovered Winter Storm Fuel Costs	$	367.5	$	—
Pirkey Power Plant Accelerated Depreciation	87.0		12.2
Dolet Hills Power Station Accelerated Depreciation (c)	72.3		71.2
Welsh Plant, Units 1 and 3 Accelerated Depreciation	45.9		3.6
Plant Retirement Costs - Unrecovered Plant, Louisiana	35.2		35.2
Dolet Hills Power Station Fuel Costs - Louisiana	30.9		—
Other Regulatory Assets Pending Final Regulatory Approval	2.4		2.2
Total Regulatory Assets Currently Earning a Return	641.2		124.4
Regulatory Assets Currently Not Earning a Return
Storm-Related Costs	148.0		99.3
Asset Retirement Obligation - Louisiana	10.3		9.1
Other Regulatory Assets Pending Final Regulatory Approval	18.4		14.5
Total Regulatory Assets Currently Not Earning a Return	176.7		122.9
Total Regulatory Assets Pending Final Regulatory Approval	817.9		247.3
Regulatory assets approved for recovery:
Regulatory Assets Currently Earning a Return
Plant Retirement Costs - Unrecovered Plant, Arkansas	13.7		14.4		21 years
Environmental Controls Projects	11.0		12.1		11 years
Other Regulatory Assets Approved for Recovery	5.2		7.1		various
Total Regulatory Assets Currently Earning a Return	29.9		33.6
Regulatory Assets Currently Not Earning a Return
Pension and OPEB Funded Status	73.8		89.1		12 years
Plant Retirement Costs - Unrecovered Plant, Texas	51.9		16.1		25 years
Dolet Hills Power Station Fuel Costs - Arkansas	13.0		—		5 years
Other Regulatory Assets Approved for Recovery	18.8		17.0		various
Total Regulatory Assets Currently Not Earning a Return	157.5		122.2
Total Regulatory Assets Approved for Recovery	187.4		155.8
Total Noncurrent Regulatory Assets	$	1,005.3	$	403.1

(a)2021 amount includes Arkansas, Louisiana and Texas jurisdictions. 2020 amount includes Louisiana jurisdiction.

(b)Unrecovered Winter Storm Fuel Costs are pending final regulatory approval as of December 31, 2021. The current asset balance represents amounts expected to be recovered in the Arkansas and Louisiana jurisdictions over the next 12 months. See “February 2021 Severe Winter Weather Impacts in SPP” section of SWEPCo Rate Matters in Note 4 for additional information.

(c)2021 amount includes Arkansas and Louisiana jurisdictions. 2020 amount includes Arkansas, Louisiana and Texas jurisdictions.

	SWEPCo
	December 31,				Remaining Refund Period
	2021		2020
Regulatory Liabilities:	(in millions)
Current Regulatory Liabilities
Over-recovered Fuel Costs - pays a return (a)	$	—	$	37.6
Total Current Regulatory Liabilities	$	—	$	37.6
Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits
Regulatory liabilities pending final regulatory determination:
Income Tax Related Regulatory Liabilities (b)
Excess ADIT Associated with Certain Depreciable Property	$	—	$	291.6
Excess ADIT that is Not Subject to Rate Normalization Requirements	—		21.8
Total Regulatory Liabilities Pending Final Regulatory Determination	—		313.4
Regulatory liabilities approved for payment:
Regulatory Liabilities Currently Paying a Return
Asset Removal Costs	461.3		470.9		(c)
Other Regulatory Liabilities Approved for Payment	2.4		2.4		various
Total Regulatory Liabilities Currently Paying a Return	463.7		473.3
Regulatory Liabilities Currently Not Paying a Return
Vegetation Management Costs - Texas	4.8		0.1		2 years
Unrealized Gains on Forward Commitments	3.7		0.2		2 years
Peak Demand Reduction/Energy Efficiency	2.6		5.2		2 years
Other Regulatory Liabilities Approved for Payment	1.9		2.7		various
Total Regulatory Liabilities Currently Not Paying a Return	13.0		8.2
Income Tax Related Regulatory Liabilities (b)
Excess ADIT Associated with Certain Depreciable Property	609.0		332.5		(d)
Excess ADIT that is Not Subject to Rate Normalization Requirements	7.0		11.5		1 year
Income Taxes Subject to Flow Through	(285.8)		(275.5)		27 years
Total Income Tax Related Regulatory Liabilities	330.2		68.5
Total Regulatory Liabilities Approved for Payment	806.9		550.0
Total Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits	$	806.9	$	863.4

(a)2020 amount includes Arkansas and Texas jurisdictions.

(b)Predominately pays a return due to the inclusion of Excess ADIT in rate base.

(c)Relieved as removal costs are incurred.

(d)Refunded using ARAM.