Regulatory Assets and Liabilities

Regulatory assets and liabilities include the following:



	September 30, 2013		December 31, 2012
(millions)
Dominion
Regulatory assets:
Deferred rate adjustment clause costs⁽¹⁾	$	72	$	55
Derivatives⁽²⁾	18		—
Unrecovered gas cost⁽³⁾	21		59
Plant retirement⁽⁴⁾	6		25
Other	67		64
Regulatory assets-current⁽⁵⁾	184		203
Unrecognized pension and other postretirement benefit costs⁽⁶⁾	934		1,210
Deferred rate adjustment clause costs⁽¹⁾	257		173
Income taxes recoverable through future rates⁽⁷⁾	164		140
Derivatives⁽²⁾	34		105
Other	89		89
Regulatory assets-non-current	1,478		1,717
Total regulatory assets	$	1,662	$	1,920
Regulatory liabilities:
PIPP⁽⁸⁾	$	143	$	100
Other	45		36
Regulatory liabilities-current⁽⁹⁾	188		136
Provision for future cost of removal and AROs⁽¹⁰⁾	1,031		985
Decommissioning trust⁽¹¹⁾	617		501
Other	70		28
Regulatory liabilities-non-current	1,718		1,514
Total regulatory liabilities	$	1,906	$	1,650
Virginia Power
Regulatory assets:
Deferred rate adjustment clause costs⁽¹⁾	$	72	$	51
Derivatives⁽²⁾	18		—
Plant retirement⁽⁴⁾	6		25
Other	50		43
Regulatory assets-current⁽⁵⁾	146		119



Deferred rate adjustment clause costs⁽¹⁾	204		127
Income taxes recoverable through future rates⁽⁷⁾	132		110
Derivatives⁽²⁾	34		105
Other	50		54
Regulatory assets-non-current	420		396
Total regulatory assets	$	566	$	515
Regulatory liabilities:
Other	$	37	$	32
Regulatory liabilities-current⁽⁹⁾	37		32
Provision for future cost of removal⁽¹⁰⁾	799		763
Decommissioning trust⁽¹¹⁾	617		501
Other	55		21
Regulatory liabilities-non-current	1,471		1,285
Total regulatory liabilities	$	1,508	$	1,317


(1)	Reflects deferrals under the electric transmission FERC formula rate and the deferral of costs associated with certain current and prospective rider projects. See Note 12 for more information.


(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.


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


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


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


(6)	Represents unrecognized pension and other postretirement employee 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.


(7)	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.


(8)	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.


(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 AROs.

At September 30, 2013, approximately $102 million of Dominion's and $65 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.