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Effects of Regulation

12 Months Ended

Dec. 31, 2020

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

In September 2020, the Oklaunion Power Station was retired. As of December 31, 2020, PSO has a regulatory asset for accelerated depreciation pending approval recorded on its balance sheet for $34 million. PSO will seek recovery of the Oklaunion Power Station in its next base rate case. In October 2020, the Oklaunion Power Station site was sold to a nonaffiliated third-party. See “Oklaunion Power Station” section of Note 7 for additional information.

SWEPCo

In April 2016, Welsh Plant, Unit 2 was retired. As part of the 2016 Texas Base Rate Case, SWEPCo received approval from the PUCT to recover the Texas jurisdictional share of Welsh Plant, Unit 2. 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. As of December 31, 2020, SWEPCo has a regulatory asset for plant retirement costs pending approval recorded on its balance sheet for $35 million related to the Louisiana jurisdictional share of Welsh Plant, Unit 2. See “2020 Louisiana Base Rate Case” section of Note 4 for additional information.

Regulated Generating Units to be Retired

PSO

In 2014, PSO received final approval from the 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. In 2016, as part of the 2015 Oklahoma Base Rate Case, the OCC issued an order approving the continued depreciation of Northeastern Plant, Unit 3 through 2040. The order did not approve accelerating the recovery of the incremental depreciation based on the revised retirement date of 2026.

SWEPCo

In January 2020, as part of the 2019 Arkansas Base Rate Case, management announced that the Dolet Hills Power Station was probable of abandonment and was to be retired by December 2026. As a result of the announcement, SWEPCo began recording a regulatory asset for accelerated depreciation. In March 2020, management announced plans to retire the plant in 2021.

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, 2020, of generating facilities planned for early retirement:


Plant	Net Investment		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	$	198.4	$	110.4	$	19.8	(b)	2026	(c)	$	14.9
Dolet Hills Power Station	74.4		71.2		24.0			2021	(d)	60.8
Pirkey Power Plant	199.5		12.2		38.7			2023	(e)	13.8
Welsh Plant, Units 1 and 3	549.8		3.6		57.6		(f)	2028	(g)	33.3

(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)Dolet Hills Power Station is current being recovered through 2026 in the Louisiana jurisdiction and through 2046 in the Arkansas and Texas jurisdictions.

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

(f)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.

(g)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)

During the second quarter of 2019, the Dolet Hills Power Station initiated a seasonal operating schedule. In January 2020, in accordance with the terms of SWEPCo’s settlement of its base rate review filed with the APSC, management announced that SWEPCo will seek regulatory approval to retire the Dolet Hills Power Station by the end of 2026. DHLC provides 100% of the fuel supply to Dolet Hills Power Station. After careful consideration of current economic conditions, and particularly for the benefit of their customers, 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. Based on these actions, management revised the estimated useful life of DHLC’s and Oxbow’s assets to coincide with the date at which extraction was discontinued in the second quarter of 2020 and the date at which delivery of lignite is expected to cease in September 2021. Management also revised the useful life of the Dolet Hills Power Station to 2021 based on the remaining estimated fuel supply available for continued seasonal operation. In March 2020, primarily due to the revision in the useful life of DHLC, SWEPCo recorded a revision to increase estimated ARO liabilities by $21 million. In April 2020, SWEPCo and CLECO jointly filed a notification letter to the LPSC providing notice of the cessation of lignite mining.

The Dolet Hills Power Station costs are recoverable by SWEPCo through base rates. SWEPCo’s share of the net investment in the Dolet Hills Power Station is $151 million, including CWIP and materials and supplies, before cost of removal.

Fuel costs incurred by the Dolet Hills Power Station are recoverable by SWEPCo through active fuel clauses. Under the fuel agreements, SWEPCo’s fuel inventory and unbilled fuel costs from mining related activities were $131 million as of December 31, 2020. Also, as of December 31, 2020, SWEPCo had a net over-recovered fuel balance of $35 million, which includes fuel burned at the Dolet Hills Power Station. Additional operational and land-related costs are expected to be incurred by DHLC and Oxbow and billed to SWEPCo prior to the closure of the Dolet Hills Power Station and recovered through fuel clauses.

In October 2020, SWEPCo filed a request with the LPSC for recovery of the Louisiana share of these additional fuel costs. SWEPCo’s filing proposes to defer $36 million of fuel costs in 2021 and recover the deferral plus carrying costs over five years beginning in 2022.

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 November 2020, management announced plans to retire the Pirkey Power Plant in 2023. The Pirkey Power Plant costs are recoverable by SWEPCo through base rates. SWEPCo’s share of the net investment in the Pirkey Power Plant is $212 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 $193 million as of December 31, 2020. Also, as of December 31, 2020, SWEPCo had a net over-recovered fuel balance of $35 million, which includes fuel burned at the Pirkey Power Plant. Additional operational costs are expected to be incurred by Sabine and billed to SWEPCo, as well as land-related costs incurred by SWEPCo, prior to the closure of the Pirkey Power Plant and recovered through 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 an immaterial impact to SWEPCo’s 2020 financial statements. If additional costs are not recoverable, it could reduce future net income and cash flows and impact financial condition.

Regulatory Assets and Liabilities

Regulatory assets and liabilities are comprised of the following items:


	AEP
	December 31,				Remaining Recovery Period
	2020		2019
Current Regulatory Assets	(in millions)
Under-recovered Fuel Costs - earns a return	$	41.4	$	44.7	1 year
Under-recovered Fuel Costs - does not earn a return	49.3		48.2		1 year
Total Current Regulatory Assets	$	90.7	$	92.9

Noncurrent Regulatory Assets
Regulatory assets pending final regulatory approval:

Regulatory Assets Currently Earning a Return

Dolet Hills Power Station Accelerated Depreciation	$	71.2	$	—
Kentucky Deferred Purchased Power Expenses	41.3		30.2
Plant Retirement Costs - Unrecovered Plant, Louisiana	35.2		35.2
Oklaunion Power Station Accelerated Depreciation	34.4		27.4


Other Regulatory Assets Pending Final Regulatory Approval	38.6		0.7
Total Regulatory Assets Currently Earning a Return	220.7		93.5
Regulatory Assets Currently Not Earning a Return
Storm-Related Costs	134.2		7.2
Plant Retirement Costs - Asset Retirement Obligation Costs	25.9		30.1
COVID-19	24.9		—



Vegetation Management Program - AEP Texas	3.8		29.4



Other Regulatory Assets Pending Final Regulatory Approval	32.7		21.5
Total Regulatory Assets Currently Not Earning a Return	221.5		88.2

Total Regulatory Assets Pending Final Regulatory Approval	442.2		181.7

Regulatory assets approved for recovery:

Regulatory Assets Currently Earning a Return
Plant Retirement Costs - Unrecovered Plant (a)	713.1		690.5		23 years
Plant Retirement Costs - Asset Retirement Obligation Costs	107.1		87.4		20 years
Meter Replacement Costs	55.5		65.4		7 years
Ohio Distribution Decoupling	46.6		31.4		2 years
Environmental Control Projects	38.6		41.0		20 years
Rockport Plant Dry Sorbent Injection System and Selective Catalytic Reduction	34.4		13.5		8 years
Cook Plant Uprate Project	30.2		32.6		13 years
Storm-Related Costs	11.5		21.3		2 years
Advanced Metering System	—		26.5









Other Regulatory Assets Approved for Recovery	94.4		79.6		various
Total Regulatory Assets Currently Earning a Return	1,131.4		1,089.2
Regulatory Assets Currently Not Earning a Return
Pension and OPEB Funded Status	1,088.6		1,309.8		12 years
Plant Retirement Costs - Asset Retirement Obligation Costs	212.7		28.8		22 years
Unamortized Loss on Reacquired Debt	120.0		129.0		28 years
Unrealized Loss on Forward Commitments	111.3		106.8		12 years
Vegetation Management	67.8		43.6		5 years
Cook Plant Nuclear Refueling Outage Levelization	39.5		63.8		2 years
PJM/SPP Annual Formula Rate True-up	33.0		7.3		2 years
Postemployment Benefits	29.1		34.2		3 years
OVEC Purchased Power	27.4		1.5		2 years
Fuel and Purchased Power Adjustment Rider	24.0		7.1		2 years
Medicare Subsidy	18.6		23.2		4 years











Other Regulatory Assets Approved for Recovery	181.4		132.8		various
Total Regulatory Assets Currently Not Earning a Return	1,953.4		1,887.9

Total Regulatory Assets Approved for Recovery	3,084.8		2,977.1

Total Noncurrent Regulatory Assets	$	3,527.0	$	3,158.8

(a)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
	2020		2019		Refund Period
Current Regulatory Liabilities	(in millions)
Over-recovered Fuel Costs - pays a return	$	27.6	$	77.5	1 year
Over-recovered Fuel Costs - does not pay a return	25.0		9.1		1 year
Total Current Regulatory Liabilities	$	52.6	$	86.6

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	1.5		0.2
Total Regulatory Liabilities Currently Not Paying a Return	1.5		0.2
Income Tax Related Regulatory Liabilities (a)
Excess ADIT Associated with Certain Depreciable Property	291.6		571.8
Excess ADIT that is Not Subject to Rate Normalization Requirements	193.3		291.0		(b)

Total Income Tax Related Regulatory Liabilities	484.9		862.8

Total Regulatory Liabilities Pending Final Regulatory Determination	488.9		863.0

Regulatory liabilities approved for payment:

Regulatory Liabilities Currently Paying a Return
Asset Removal Costs	3,061.9		2,876.7		(c)

Deferred Investment Tax Credits	4.1		6.2		33 years
Ohio Basic Transmission Cost Rider	—		37.2


Other Regulatory Liabilities Approved for Payment	25.2		14.4		various
Total Regulatory Liabilities Currently Paying a Return	3,091.2		2,934.5
Regulatory Liabilities Currently Not Paying a Return
Excess Nuclear Decommissioning Funding	1,476.6		1,236.0		(d)
Deferred Investment Tax Credits	216.7		215.3		34 years
PJM Transmission Enhancement Refund	56.2		67.3		5 years
Transition and Restoration Charges - Texas	48.2		50.5		9 years
2017-2019 Virginia Triennial Revenue Provision	44.2		—		28 years
Spent Nuclear Fuel	43.1		43.6		(d)
Peak Demand Reduction/Energy Efficiency	26.3		23.0		2 years
Deferred Gain on Sale of Rockport Unit 2	17.9		27.2		2 years
Ohio Enhanced Service Reliability Plan	5.7		29.7		2 years
Virginia Transmission Rate Adjustment Clause	—		28.1





Other Regulatory Liabilities Approved for Payment	71.0		87.7		various
Total Regulatory Liabilities Currently Not Paying a Return	2,005.9		1,808.4
Income Tax Related Regulatory Liabilities (a)
Excess ADIT Associated with Certain Depreciable Property	3,485.7		3,303.0		(e)
Excess ADIT that is Not Subject to Rate Normalization Requirements	714.9		890.5		10 years
Income Taxes Subject to Flow Through	(1,407.9)		(1,341.8)		54 years
Total Income Tax Related Regulatory Liabilities	2,792.7		2,851.7

Total Regulatory Liabilities Approved for Payment	7,889.8		7,594.6

Total Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits	$	8,378.7	$	8,457.6

(a)This balance primarily represents regulatory liabilities for Excess ADIT as a result of the reduction in the corporate federal income tax rate from 35% to 21% related to the enactment of Tax Reform. The regulatory liability balance predominately pays a return due to the inclusion of Excess ADIT in rate base.

(b)2020 and 2019 amounts include approximately $173 million and $172 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.

(c)Relieved as removal costs are incurred.

(d)Relieved when plant is decommissioned.

(e)Refunded using ARAM.


	AEP Texas
	December 31,				Remaining Recovery Period
Regulatory Assets:	2020		2019
	(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
COVID-19	10.5		—
Vegetation Management Program	3.8		29.4

Other Regulatory Assets Pending Final Regulatory Approval	2.3		1.4
Total Regulatory Assets Currently Not Earning a Return	16.6		30.8

Total Regulatory Assets Pending Final Regulatory Approval	32.9		30.8

Regulatory assets approved for recovery:

Regulatory Assets Currently Earning a Return
Meter Replacement Costs	29.3		35.2		6 years
Advanced Metering System	—		26.5
Total Regulatory Assets Currently Earning a Return	29.3		61.7
Regulatory Assets Currently Not Earning a Return
Pension and OPEB Funded Status	145.0		172.0		12 years
Vegetation Management Program	22.4		—		5 years
Storm-Related Costs	17.1		—		4 years
Peak Demand Reduction/Energy Efficiency	7.7		3.5		2 years





Other Regulatory Assets Approved for Recovery	12.4		12.6		various
Total Regulatory Assets Currently Not Earning a Return	204.6		188.1

Total Regulatory Assets Approved for Recovery	233.9		249.8

Total Noncurrent Regulatory Assets	$	266.8	$	280.6


	AEP Texas
	December 31,				Remaining Refund Period
Regulatory Liabilities:	2020		2019
	(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 Associated with Certain Depreciable Property	—		274.9
Excess ADIT that is Not Subject to Rate Normalization Requirements	(8.2)		87.1

Total Income Tax Related Regulatory Liabilities	(8.2)		362.0

Total Regulatory Liabilities Pending Final Regulatory Determination	(5.7)		362.0

Regulatory liabilities approved for payment:

Regulatory Liabilities Currently Paying a Return
Asset Removal Costs	718.3		689.6		(b)


Other Regulatory Liabilities Approved for Payment	5.3		10.1		various
Total Regulatory Liabilities Currently Paying a Return	723.6		699.7
Regulatory Liabilities Currently Not Paying a Return
Transition and Restoration Charges	48.2		50.5		9 years
Deferred Investment Tax Credits	8.5		9.6		20 years

Other Regulatory Liabilities Approved for Payment	1.2		4.8		various
Total Regulatory Liabilities Currently Not Paying a Return	57.9		64.9
Income Tax Related Regulatory Liabilities (a)
Excess ADIT Associated with Certain Depreciable Property	506.0		236.5		(c)
Excess ADIT that is Not Subject to Rate Normalization Requirements	41.7		—		1 years
Income Taxes Subject to Flow Through	(52.7)		(46.2)		28 years
Total Income Tax Related Regulatory Liabilities	495.0		190.3

Total Regulatory Liabilities Approved for Payment	1,276.5		954.9

Total Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits	$	1,270.8	$	1,316.9

(b)Relieved as removal costs are incurred.

(c)Refunded using ARAM.


	AEPTCo
	December 31,				Remaining Recovery Period
Regulatory Assets:	2020		2019
	(in millions)
Noncurrent Regulatory Assets
Regulatory assets approved for recovery:




Regulatory Assets Currently Not Earning a Return
PJM/SPP Annual Formula Rate True-up	$	15.1	$	4.2	2 years
Total Regulatory Assets Approved for Recovery	15.1		4.2

Total Noncurrent Regulatory Assets	$	15.1	$	4.2


	AEPTCo
	December 31,				Remaining Refund Period
Regulatory Liabilities:	2020		2019
	(in millions)
Noncurrent Regulatory Liabilities












Regulatory Liabilities Currently Paying a Return
Asset Removal Costs	$	198.6	$	141.0	(b)


Total Regulatory Liabilities Currently Paying a Return	198.6		141.0
Income Tax Related Regulatory Liabilities (a)
Excess ADIT Associated with Certain Depreciable Property	531.5		535.7		(c)
Excess ADIT that is Not Subject to Rate Normalization Requirements	(30.6)		(35.4)		8 years
Income Taxes Subject to Flow Through	(117.7)		(100.4)		38 years
Total Income Tax Related Regulatory Liabilities	383.2		399.9

Total Regulatory Liabilities Approved for Payment	581.8		540.9

Total Noncurrent Regulatory Liabilities	$	581.8	$	540.9

(b)Relieved as removal costs are incurred.

(c)Refunded using ARAM.


	APCo
	December 31,				Remaining Recovery Period
Regulatory Assets:	2020		2019
	(in millions)
Current Regulatory Assets
Under-recovered Fuel Costs, Virginia - earns a return	$	3.3	$	36.8	1 year
Under-recovered Fuel Costs - does not earn a return	2.0		5.7		1 year
Total Current Regulatory Assets	$	5.3	$	42.5

Noncurrent Regulatory Assets
Regulatory assets pending final regulatory approval:

Regulatory Assets Currently Earning a Return
COVID-19 - Virginia	$	3.7	$	—
Plant Retirement Costs - Materials and Supplies	—		0.5
Total Regulatory Assets Currently Earning a Return	3.7		0.5
Regulatory Assets Currently Not Earning a Return
Plant Retirement Costs - Asset Retirement Obligation Costs	25.9		30.1
Environmental Expense Deferral - Virginia	9.3		—

COVID-19 - West Virginia	1.5		—
Other Regulatory Assets Pending Final Regulatory Approval	3.4		—



Total Regulatory Assets Currently Not Earning a Return	40.1		30.1

Total Regulatory Assets Pending Final Regulatory Approval	43.8		30.6

Regulatory assets approved for recovery:

Regulatory Assets Currently Earning a Return
Plant Retirement Costs - Unrecovered Plant (a)	122.4		86.4		23 years



Other Regulatory Assets Approved for Recovery	1.0		0.5		various
Total Regulatory Assets Currently Earning a Return	123.4		86.9
Regulatory Assets Currently Not Earning a Return
Plant Retirement Costs - Asset Retirement Obligation Costs	202.7		—		15 years
Pension and OPEB Funded Status	114.4		160.8		12 years
Unamortized Loss on Reacquired Debt	82.1		85.5		25 years
Vegetation Management Program - West Virginia	45.4		43.6		2 years
Virginia Transmission Rate Adjustment Clause	18.8		—		2 years
Peak Demand Reduction/Energy Efficiency	16.8		19.5		6 years
Postemployment Benefits	13.5		15.9		3 years
PJM Annual Formula Rate True-up	12.7		—		2 years











Other Regulatory Assets Approved for Recovery	12.7		14.4		various
Total Regulatory Assets Currently Not Earning a Return	519.1		339.7

Total Regulatory Assets Approved for Recovery	642.5		426.6

Total Noncurrent Regulatory Assets	$	686.3	$	457.2

(a)December 31, 2020 amount includes Virginia and West Virginia jurisdictions. December 31, 2019 amount includes West Virginia jurisdiction.


	APCo
	December 31,				Remaining Refund Period
Regulatory Liabilities:	2020		2019
	(in millions)
Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits










Regulatory liabilities approved for payment:

Regulatory Liabilities Currently Paying a Return
Asset Removal Costs	$	678.9	$	635.3	(b)
Deferred Investment Tax Credits	0.3		0.5		33 years
Total Regulatory Liabilities Currently Paying a Return	679.2		635.8
Regulatory Liabilities Currently Not Paying a Return
2017-2019 Virginia Triennial Revenue Provision	44.2		—		28 years
PJM Transmission Enhancement Refund	16.3		19.5		5 years



Virginia Transmission Rate Adjustment Clause	—		28.1
Other Regulatory Liabilities Approved for Payment	12.3		18.0		various
Total Regulatory Liabilities Currently Not Paying a Return	72.8		65.6
Income Tax Related Regulatory Liabilities (a)
Excess ADIT Associated with Certain Depreciable Property	690.0		718.9		(c)
Excess ADIT that is Not Subject to Rate Normalization Requirements	139.1		210.7		8 years
Income Taxes Subject to Flow Through	(356.4)		(362.3)		24 years
Total Income Tax Related Regulatory Liabilities	472.7		567.3

Total Regulatory Liabilities Approved for Payment	1,224.7		1,268.7

Total Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits	$	1,224.7	$	1,268.7

(b)Relieved as removal costs are incurred.

(c)Refunded using ARAM.


	I&M
	December 31,				Remaining Recovery Period
Regulatory Assets:	2020		2019
	(in millions)
Current Regulatory Assets
Under-recovered Fuel Costs - earns a return	$	5.4	$	3.0	1 year

Total Current Regulatory Assets	$	5.4	$	3.0

Noncurrent Regulatory Assets
Regulatory assets pending final regulatory approval:

Regulatory Assets Currently Earning a Return

Other Regulatory Assets Pending Final Regulatory Approval	$	0.5	$	—
Total Regulatory Assets Currently Earning a Return	0.5		—
Regulatory Assets Currently Not Earning a Return






COVID-19	3.8		—
Cook Plant Study Costs	—		7.6
Other Regulatory Assets Pending Final Regulatory Approval	—		0.1
Total Regulatory Assets Currently Not Earning a Return	3.8		7.7

Total Regulatory Assets Pending Final Regulatory Approval	4.3		7.7

Regulatory assets approved for recovery:

Regulatory Assets Currently Earning a Return
Plant Retirement Costs - Unrecovered Plant	191.5		214.9		8 years
Rockport Plant Dry Sorbent Injection System and Selective Catalytic Reduction	34.4		13.5		8 years
Cook Plant Uprate Project	30.2		32.6		13 years
Deferred Cook Plant Life Cycle Management Project Costs	14.1		15.1		14 years
Cook Plant Turbine	11.1		13.4		18 years
Cook Plant Study Costs - Indiana	10.1		—		15 years


Other Regulatory Assets Approved for Recovery	7.0		6.9		various
Total Regulatory Assets Currently Earning a Return	298.4		296.4
Regulatory Assets Currently Not Earning a Return
Cook Plant Nuclear Refueling Outage Levelization	39.5		63.8		2 years
Pension and OPEB Funded Status	25.7		67.5		12 years

Unamortized Loss on Reacquired Debt	15.7		17.2		28 years
Postemployment Benefits	4.9		7.2		3 years











Other Regulatory Assets Approved for Recovery	16.3		22.3		various
Total Regulatory Assets Currently Not Earning a Return	102.1		178.0

Total Regulatory Assets Approved for Recovery	400.5		474.4

Total Noncurrent Regulatory Assets	$	404.8	$	482.1


	I&M
	December 31,				Remaining Refund Period
Regulatory Liabilities:	2020		2019
	(in millions)
Current Regulatory Liabilities

Over-recovered Fuel Costs, Indiana - does not pay a return	$	20.8	$	6.1	1 year
Total Current Regulatory Liabilities	$	20.8	$	6.1

Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits










Regulatory liabilities approved for payment:

Regulatory Liabilities Currently Paying a Return
Asset Removal Costs	$	168.2	$	166.7	(b)
Other Regulatory Liabilities Approved for Payment	17.4		0.3		various
Total Regulatory Liabilities Currently Paying a Return	185.6		167.0
Regulatory Liabilities Currently Not Paying a Return
Excess Nuclear Decommissioning Funding	1,476.6		1,236.0		(c)

Spent Nuclear Fuel	43.1		43.6		(c)
Deferred Investment Tax Credits	21.3		25.8		19 years
PJM Costs and Off-system Sales Margin Sharing - Indiana	13.3		17.0		2 years
PJM Transmission Enhancement Refund	9.9		11.8		5 years
Deferred Gain on Sale of Rockport Unit 2	7.2		10.9		2 years






Other Regulatory Liabilities Approved for Payment	30.1		24.9		various
Total Regulatory Liabilities Currently Not Paying a Return	1,601.5		1,370.0
Income Tax Related Regulatory Liabilities (a)
Excess ADIT Associated with Certain Depreciable Property	450.6		470.9		(d)
Excess ADIT that is Not Subject to Rate Normalization Requirements	136.2		184.5		4 years
Income Taxes Subject to Flow Through	(332.0)		(301.0)		20 years
Total Income Tax Related Regulatory Liabilities	254.8		354.4

Total Regulatory Liabilities Approved for Payment	2,041.9		1,891.4

Total Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits	$	2,041.9	$	1,891.4

(b)Relieved as removal costs are incurred.

(c)Relieved when plant is decommissioned.

(d)Refunded using ARAM.


	OPCo
	December 31,				Remaining Recovery Period
Regulatory Assets:	2020		2019
	(in millions)





Noncurrent Regulatory Assets
Regulatory assets pending final regulatory approval:



Regulatory Assets Currently Not Earning a Return
COVID-19	$	4.4	$	—
Storm-Related Costs	4.0		—
Other Regulatory Assets Pending Final Regulatory Approval	—		0.1
Total Regulatory Assets Pending Final Regulatory Approval	8.4		0.1

Regulatory assets approved for recovery:

Regulatory Assets Currently Earning a Return
Ohio Distribution Decoupling	46.6		31.4		2 years

Ohio Basic Transmission Cost Rider	12.3		—		2 years

Other Regulatory Assets Approved for Recovery	1.3		—		various
Total Regulatory Assets Currently Earning a Return	60.2		31.4
Regulatory Assets Currently Not Earning a Return
Pension and OPEB Funded Status	130.7		167.3		12 years
Unrealized Loss on Forward Commitments	110.0		103.6		12 years
OVEC Purchased Power	27.4		1.5		2 years
Smart Grid Costs	19.2		13.7		2 years
Distribution Investment Rider	7.4		10.9		2 years
Postemployment Benefits	6.7		7.6		3 years



Other Regulatory Assets Approved for Recovery	15.8		15.7		various
Total Regulatory Assets Currently Not Earning a Return	317.2		320.3

Total Regulatory Assets Approved for Recovery	377.4		351.7

Total Noncurrent Regulatory Assets	$	385.8	$	351.8


	OPCo
	December 31,				Remaining Refund Period
	2020		2019
Regulatory Liabilities:	(in millions)

Current Regulatory Liabilities
Over-recovered Fuel Costs - does not pay a return	$	3.9	$	2.8	1 year
Total Current Regulatory Liabilities	$	3.9	$	2.8

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	458.4		446.3		(b)
Ohio Basic Transmission Cost Rider	—		37.2
Other Regulatory Liabilities Approved for Payment	—		1.3
Total Regulatory Liabilities Currently Paying a Return	458.4		484.8
Regulatory Liabilities Currently Not Paying a Return

PJM Transmission Enhancement Refund	24.5		29.4		5 years
Peak Demand Reduction/Energy Efficiency	19.9		19.7		2 years
Ohio Enhanced Service Reliability Plan	5.7		29.7		2 years






Other Regulatory Liabilities Approved for Payment	0.7		2.9		various
Total Regulatory Liabilities Currently Not Paying a Return	50.8		81.7
Income Tax Related Regulatory Liabilities (a)
Excess ADIT Associated with Certain Depreciable Property	334.6		341.6		(c)
Excess ADIT that is Not Subject to Rate Normalization Requirements	223.9		252.3		8 years
Income Taxes Subject to Flow Through	(62.7)		(69.7)		29 years
Total Income Tax Related Regulatory Liabilities	495.8		524.2

Total Regulatory Liabilities Approved for Payment	1,005.0		1,090.7

Total Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits	$	1,005.2	$	1,090.9

(b)Relieved as removal costs are incurred.

(c)Refunded using ARAM.


	PSO
	December 31,				Remaining Recovery Period
	2020		2019
Regulatory Assets:	(in millions)

Current Regulatory Assets
Under-recovered Fuel Costs - earns a return	$	30.1	$	—	1 year
Total Current Regulatory Assets	$	30.1	$	—

Noncurrent Regulatory Assets
Regulatory assets pending final regulatory approval:

Regulatory Assets Currently Earning a Return

Oklaunion Power Station Accelerated Depreciation	$	34.4	$	27.4

Total Regulatory Assets Currently Earning a Return	34.4		27.4
Regulatory Assets Currently Not Earning a Return


Storm-Related Costs	15.8		7.2
COVID-19	0.3		—

Total Regulatory Assets Currently Not Earning a Return	16.1		7.2

Total Regulatory Assets Pending Final Regulatory Approval	50.5		34.6

Regulatory assets approved for recovery:

Regulatory Assets Currently Earning a Return
Plant Retirement Costs - Unrecovered Plant (a)	180.8		167.0		20 years
Environmental Control Projects	26.5		27.8		20 years
Meter Replacement Costs	26.2		30.2		7 years
Storm-Related Costs	11.5		21.3		2 years
Red Rock Generating Facility	8.2		8.4		36 years
Other Regulatory Assets Approved for Recovery	0.5		0.6		various
Total Regulatory Assets Currently Earning a Return	253.7		255.3
Regulatory Assets Currently Not Earning a Return
Pension and OPEB Funded Status	52.3		73.4		12 years
Unamortized Loss on Reacquired Debt	6.1		6.5		18 years







Other Regulatory Assets Approved for Recovery	12.4		5.4		various
Total Regulatory Assets Currently Not Earning a Return	70.8		85.3

Total Regulatory Assets Approved for Recovery	324.5		340.6

Total Noncurrent Regulatory Assets	$	375.0	$	375.2


	PSO
	December 31,				Remaining Refund Period
	2020		2019
Regulatory Liabilities:	(in millions)

Current Regulatory Liabilities
Over-recovered Fuel Costs - pays a return	$	—	$	63.9
Total Current Regulatory Liabilities	$	—	$	63.9

Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits










Regulatory liabilities approved for payment:

Regulatory Liabilities Currently Paying a Return
Asset Removal Costs	$	289.9	$	286.8	(b)
Total Regulatory Liabilities Currently Paying a Return	289.9		286.8
Regulatory Liabilities Currently Not Paying a Return

Deferred Investment Tax Credits	51.0		51.5		24 years

Other Regulatory Liabilities Approved for Payment	1.3		4.7		various
Total Regulatory Liabilities Currently Not Paying a Return	52.3		56.2
Income Tax Related Regulatory Liabilities (a)
Excess ADIT Associated with Certain Depreciable Property	397.0		405.8		(c)
Excess ADIT that is Not Subject to Rate Normalization Requirements	71.3		96.3		4 years
Income Taxes Subject to Flow Through	(8.3)		(7.9)		27 years
Total Income Tax Related Regulatory Liabilities	460.0		494.2

Total Regulatory Liabilities Approved for Payment	802.2		837.2

Total Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits	$	802.2	$	837.2

(b)Relieved as removal costs are incurred.

(c)Refunded using ARAM.


	SWEPCo
	December 31,				Remaining Recovery Period
	2020		2019
Regulatory Assets:	(in millions)

Current Regulatory Assets
Under-recovered Fuel Costs - earns a return (a)	$	2.6	$	4.9	1 year
Total Current Regulatory Assets	$	2.6	$	4.9

Noncurrent Regulatory Assets
Regulatory assets pending final regulatory approval:

Regulatory Assets Currently Earning a Return
Dolet Hills Power Station Accelerated Depreciation	$	71.2	$	—
Plant Retirement Costs - Unrecovered Plant, Louisiana	35.2		35.2
Pirkey Power Plant Accelerated Depreciation	12.2		—
Welsh Plant, Units 1 and 3 Accelerated Depreciation	3.6		—
Other Regulatory Assets Pending Final Regulatory Approval	2.2		0.2
Total Regulatory Assets Currently Earning a Return	124.4		35.4
Regulatory Assets Currently Not Earning a Return
Storm-Related Costs	99.3		—
Asset Retirement Obligation - Louisiana	9.1		7.2



Other Regulatory Assets Pending Final Regulatory Approval	14.5		3.7
Total Regulatory Assets Currently Not Earning a Return	122.9		10.9

Total Regulatory Assets Pending Final Regulatory Approval	247.3		46.3

Regulatory assets approved for recovery:

Regulatory Assets Currently Earning a Return
Plant Retirement Costs - Unrecovered Plant, Arkansas	14.4		15.1		22 years
Environmental Controls Projects	12.1		13.2		12 years
Other Regulatory Assets Approved for Recovery	7.1		8.9		various
Total Regulatory Assets Currently Earning a Return	33.6		37.2
Regulatory Assets Currently Not Earning a Return
Pension and OPEB Funded Status	89.1		102.6		12 years
Plant Retirement Costs - Unrecovered Plant, Texas	16.1		16.6		21 years








Other Regulatory Assets Approved for Recovery	17.0		19.7		various
Total Regulatory Assets Currently Not Earning a Return	122.2		138.9

Total Regulatory Assets Approved for Recovery	155.8		176.1

Total Noncurrent Regulatory Assets	$	403.1	$	222.4

(a)December 31, 2020 amount includes Louisiana jurisdiction. December 31, 2019 amount includes Arkansas jurisdiction.


	SWEPCo
	December 31,				Remaining Refund Period
	2020		2019
Regulatory Liabilities:	(in millions)

Current Regulatory Liabilities
Over-recovered Fuel Costs - pays a return (a)	$	37.6	$	13.6	1 year
Total Current Regulatory Liabilities	$	37.6	$	13.6

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	$	297.0
Excess ADIT that is Not Subject to Rate Normalization Requirements	21.8		22.7

Total Regulatory Liabilities Pending Final Regulatory Determination	313.4		319.7

Regulatory liabilities approved for payment:

Regulatory Liabilities Currently Paying a Return
Asset Removal Costs	470.9		453.4		(c)


Other Regulatory Liabilities Approved for Payment	2.4		2.8		various
Total Regulatory Liabilities Currently Paying a Return	473.3		456.2
Regulatory Liabilities Currently Not Paying a Return

Peak Demand Reduction/Energy Efficiency	5.2		6.0		2 years
Deferred Investment Tax Credits	1.8		3.1		10 years
Other Regulatory Liabilities Approved for Payment	1.2		1.7		various
Total Regulatory Liabilities Currently Not Paying a Return	8.2		10.8
Income Tax Related Regulatory Liabilities (b)
Excess ADIT Associated with Certain Depreciable Property	332.5		339.4		(d)
Excess ADIT that is Not Subject to Rate Normalization Requirements	11.5		27.8		(e)
Income Taxes Subject to Flow Through	(275.5)		(261.6)		28 years
Total Income Tax Related Regulatory Liabilities	68.5		105.6

Total Regulatory Liabilities Approved for Payment	550.0		572.6

Total Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits	$	863.4	$	892.3

(a)December 31, 2020 amount includes Arkansas and Texas jurisdictions. December 31, 2019 amount includes Texas and Louisiana jurisdictions.

(b)This balance primarily represents regulatory liabilities for Excess ADIT as a result of the reduction in the corporate federal income tax rate from 35% to 21% related to the enactment of Tax Reform. The regulatory liability balance 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.

(e)Current balance represents revisions to balances for jurisdictions having previously issued orders on treatment for refund, refund period to be addressed in future proceedings.