Regulatory Assets and Liabilities

Regulatory assets and liabilities include the following:



	June 30, 2012		December 31, 2011
(millions)
Dominion
Regulatory assets:
Deferred cost of fuel used in electric generation⁽¹⁾	$	78	$	249
Deferred rate adjustment clause costs⁽²⁾	70		113
Other	114		179
Regulatory assets-current⁽³⁾	262		541
Unrecognized pension and other postretirement benefit costs⁽⁴⁾	861		887
Income taxes recoverable through future rates⁽⁵⁾	135		121
Derivatives⁽⁶⁾	107		49
Deferred rate adjustment clause costs⁽²⁾	104		72
Other	121		253
Regulatory assets-non-current	1,328		1,382
Total regulatory assets	$	1,590	$	1,923
Regulatory liabilities:
PIPP⁽⁷⁾	$	78	$	58
Provision for rate proceedings⁽⁸⁾	51		150
Other	36		35
Regulatory liabilities-current⁽⁹⁾	165		243
Provision for future cost of removal and AROs⁽¹⁰⁾	939		901
Decommissioning trust⁽¹¹⁾	457		399
Other	40		24
Regulatory liabilities-non-current	1,436		1,324
Total regulatory liabilities	$	1,601	$	1,567
Virginia Power
Regulatory assets:
Deferred cost of fuel used in electric generation⁽¹⁾	$	78	$	249
Deferred rate adjustment clause costs⁽²⁾	70		113
Other	70		117
Regulatory assets-current⁽³⁾	218		479
Income taxes recoverable through future rates⁽⁵⁾	109		100



Derivatives⁽⁶⁾	107		49
Deferred rate adjustment clause costs⁽²⁾	104		70
Other	43		180
Regulatory assets-non-current	363		399
Total regulatory assets	$	581	$	878
Regulatory liabilities:
Provision for rate proceedings⁽⁸⁾	$	51	$	150
Other	28		28
Regulatory liabilities-current⁽⁹⁾	79		178
Provision for future cost of removal⁽¹⁰⁾	720		687
Decommissioning trust⁽¹¹⁾	457		399
Other	27		9
Regulatory liabilities-non-current	1,204		1,095
Total regulatory liabilities	$	1,283	$	1,273


(1)	Primarily reflects deferred fuel expenses for the Virginia jurisdiction of Virginia Power's generation operations. See Note 11 for more information.


(2)	Reflects deferrals under the electric transmission FERC formula rate and the deferral of costs associated with certain riders. See Note 11 for more information.


(3)	Current regulatory assets are presented in other current assets in Dominion's and Virginia Power's Consolidated Balance Sheets.


(4)	Represents unrecognized pension and other postretirement benefit costs expected to be recovered through future rates by certain of Dominion's rate-regulated subsidiaries.


(5)	Amounts to be recovered through future rates to pay income taxes that become payable when rate revenue is provided to recover AFUDC-equity and depreciation of property, plant and equipment for which deferred income taxes were not recognized for ratemaking purposes, including amounts attributable to tax rate changes.


(6)	For jurisdictions subject to cost-based rate regulation, changes in the fair value of derivative instruments result in the recognition of regulatory assets or regulatory liabilities as they are expected to be recovered from or refunded to customers.


(7)	Under PIPP, eligible customers can receive energy assistance based on their ability to pay. The difference between the customer's total bill and the PIPP plan amount is deferred and collected or returned annually under the PIPP rider according to East Ohio tariff provisions. See Note 11 for more information.


(8)	Reflects a reserve associated with the settlement of Virginia Power's 2009 base rate case proceedings and associated with the Biennial Review Order.


(9)	Current regulatory liabilities are presented in other current liabilities in Dominion's and Virginia Power's Consolidated Balance Sheets.


(10)	Rates charged to customers by the Companies' regulated businesses include a provision for the cost of future activities to remove assets that are expected to be incurred at the time of retirement.


(11)	Primarily reflects a regulatory liability representing amounts collected from Virginia jurisdictional customers and placed in external trusts (including income, losses and changes in fair value thereon) for the future decommissioning of Virginia Power's utility nuclear generation stations, in excess of the related ARO.

At June 30, 2012, approximately $262 million of Dominion's and $208 million of Virginia Power's regulatory assets represented past expenditures on which they do not currently earn a return. Dominion's expenditures primarily include deferred cost of fuel used in electric generation. The above expenditures are expected to be recovered within the next two years.