REGULATORY ASSETS AND LIABILITIES

Regulatory assets and liabilities include the following:



At December 31,	2012		2011
(millions)
Dominion
Regulatory assets:
Unrecovered gas costs⁽¹⁾	$	59	$	48
Deferred rate adjustment clause costs⁽²⁾	55		113
Virginia sales taxes⁽³⁾	37		32
Plant retirement⁽⁴⁾	25		27
Deferred cost of fuel used in electric generation⁽⁵⁾	—		249
Derivatives⁽⁶⁾	—		45
Other	27		27
Regulatory assets-current	203		541
Unrecognized pension and other postretirement benefit costs⁽⁷⁾	1,210		887
Deferred rate adjustment clause costs⁽²⁾	173		107
Income taxes recoverable through future rates⁽⁸⁾	140		121
Derivatives⁽⁶⁾	105		49
Other postretirement benefit costs⁽⁹⁾	21		26
Plant retirement⁽⁴⁾	11		25
Deferred cost of fuel used in electric generation⁽⁵⁾	—		122
Other	57		45
Regulatory assets-non-current	1,717		1,382
Total regulatory assets	$	1,920	$	1,923
Regulatory liabilities:
PIPP⁽¹⁰⁾	$	100	$	58
Provision for rate proceedings⁽¹¹⁾	8		150
Other	28		35
Regulatory liabilities-current	136		243
Provision for future cost of removal and AROs⁽¹²⁾	985		901
Decommissioning trust⁽¹³⁾	501		399
Other	28		24
Regulatory liabilities-non-current	1,514		1,324
Total regulatory liabilities	$	1,650	$	1,567
Virginia Power
Regulatory assets:
Deferred rate adjustment clause costs⁽²⁾	$	51	$	113
Virginia sales taxes⁽³⁾	37		32
Plant retirement⁽⁴⁾	25		27
Deferred cost of fuel used in electric generation⁽⁵⁾	—		249
Derivatives⁽⁶⁾	—		45
Other	6		13
Regulatory assets-current	119		479
Deferred rate adjustment clause costs⁽²⁾	127		70
Income taxes recoverable through future rates⁽⁸⁾	110		100
Derivatives⁽⁶⁾	105		49
Plant retirement⁽⁴⁾	11		25
Deferred cost of fuel used in electric generation⁽⁵⁾	—		122
Other	43		33
Regulatory assets-non-current	396		399
Total regulatory assets	$	515	$	878
Regulatory liabilities:
Provision for rate proceedings⁽¹¹⁾	$	7	$	150
Other	25		28
Regulatory liabilities-current	32		178



Provision for future cost of removal⁽¹²⁾	763		687
Decommissioning trust⁽¹³⁾	501		399
Other	21		9
Regulatory liabilities-non-current	1,285		1,095
Total regulatory liabilities	$	1,317	$	1,273


(1)	Reflects unrecovered gas costs at Dominion's regulated gas operations, which are recovered through quarterly or annual filings with the applicable regulatory authority.


(2)	Reflects deferrals under the electric transmission FERC formula rate and the deferral of costs associated with certain current and prospective rider projects. See Note 13 for more information.


(3)	Amounts to be recovered through an annual surcharge to reimburse Virginia Power for incremental sales taxes being incurred due to the repeal of the public service company sales tax exemption in Virginia.


(4)	Reflects costs anticipated to be recovered in base rates for certain coal units expected to be retired.


(5)	Primarily reflects deferred fuel expenses for the Virginia jurisdiction of Virginia Power's generation operations. See Note 13 for more information.


(6)	As discussed under Derivative Instruments in Note 2, 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)	Represents unrecognized pension and other postretirement benefit costs expected to be recovered through future rates generally over the expected remaining service period of plan participants by certain of Dominion's rate-regulated subsidiaries.


(8)	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.


(9)	Primarily reflects costs recognized in excess of amounts included in regulated rates charged by Dominion's regulated gas operations before rates were updated to reflect a change in accounting method for other postretirement benefit costs.


(10)	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 13 for more information regarding PIPP.


(11)	Reflects a reserve associated with the Biennial Review Order. See Note 13 for more information.


(12)	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.


(13)	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 December 31, 2012, approximately $319 million of Dominion's and $240 million of Virginia Power's regulatory assets represented past expenditures on which they do not currently earn a return. These expenditures are expected to be recovered within the next two years.