Note 7. Regulatory Assets and Liabilities

Regulatory assets and liabilities include the following:

	June 30,		December 31,
	2018		2017
(millions)
Regulatory assets:
Pipeline integrity costs⁽¹⁾	$	2.0	$	2.0
EEP⁽²⁾		1.9		3.3
Deferred royalties⁽³⁾		1.6		—
Purchased gas adjustment⁽⁴⁾		—		10.7
Other		—		0.6
Regulatory assets-current		5.5		16.6
Deferred production imbalance⁽⁵⁾		4.7		—
Cost of reacquired debt⁽⁶⁾		2.5		2.7
Pipeline integrity costs⁽¹⁾		0.6		0.6
Regulatory assets-noncurrent⁽⁷⁾		7.8		3.3
Total regulatory assets	$	13.3	$	19.9
Regulatory liabilities:
Purchased gas adjustment⁽⁴⁾	$	31.6	$	—
CET⁽⁸⁾		10.5		4.4
Cost-of-service impact of 2017 Tax Reform Act⁽⁹⁾		9.6		—
Cost of plant removal and AROs⁽¹⁰⁾		4.2		4.2
Other		1.7		1.3
Regulatory liabilities-current		57.6		9.9
Income taxes refundable through future rates⁽¹¹⁾		244.7		244.9
Cost of plant removal and AROs⁽¹⁰⁾		196.3		194.0
Other		3.0		2.1
Regulatory liabilities-noncurrent		444.0		441.0
Total regulatory liabilities	$	501.6	$	450.9

(1)	The costs of complying with pipeline-integrity regulations are recovered in rates subject to a Utah Commission order. Questar Gas is allowed to recover $7.0 million per year. Costs incurred in excess of this amount will be recovered in future rate changes.

(2)

The EEP relates to funds expended for promoting the conservation of natural gas through advertising, rebates for efficient homes and appliances and home energy audits. Costs are recovered from customers through periodic rate adjustments. Costs incurred in excess of recoveries result in an asset; recoveries in excess of costs result in a liability.

(3)	Royalties on cost-of-service gas produced are recovered from customers through future rates.

(4)	Purchased gas costs that are different from those provided for in present rates are accumulated and recovered or credited through future rate changes.

(5)	Production imbalances will be recovered from customers at the end of the related gas wells’ useful life.

(6)	Gains and losses on the reacquisition of debt by rate-regulated companies are deferred and amortized as interest expense over the would-be remaining life of the reacquired debt. The reacquired debt costs had a weighted-average life of approximately 4.6 years as of June 30, 2018.

(7)	Noncurrent regulatory assets are presented in the other deferred charges and other assets in the Balance Sheets.

(8)	The CET represents the difference between actual and allowed revenues. Any deficiency or excess in amounts collected is recovered or refunded through periodic rate adjustments.

(9)	Balance refundable to customers related to the decrease in revenue requirements for recovery of income taxes. See Note 8 for more information.

(10)	Cost of plant removal and AROs represent amounts recovered from customers for costs of future activities to remove assets that are expected to be incurred at the time of retirement.

(11)	Amounts recorded to pass the effect of reduced income tax rates from the 2017 Tax Reform Act to customers in future periods, which will reverse at the weighted-average tax rate that was used to build the reserves over the remaining book life of the property.