11.	Regulatory Assets and Liabilities

NSP-Wisconsin's consolidated financial statements are prepared in accordance with the applicable accounting guidance, as discussed in Note 1. Under this guidance, regulatory assets and liabilities are created for amounts that regulators may allow to be collected, or may require to be paid back to customers in future electric and natural gas rates. Any portion of the business that is not rate regulated cannot establish regulatory assets and liabilities. If changes in the utility industry or the business of NSP-Wisconsin no longer allow for the application of regulatory accounting guidance under GAAP, NSP-Wisconsin would be required to recognize the write-off of regulatory assets and liabilities in net income or OCI.

The components of regulatory assets and liabilities shown on the consolidated balance sheets of NSP-Wisconsin at Dec. 31, 2011 and Dec. 31, 2010 are:

	See		Remaining
(Thousands of Dollars)	Notes		Amortization Period	Dec. 31, 2011						Dec. 31, 2010
Regulatory Assets				Current		Noncurrent			Current			Noncurrent
Environmental remediation costs		1, 10	Various	$	-		$	108,181		$	543		$	97,466
Pension and retiree medical obligations (a)		6	Various		8,197			98,045			6,234			90,511
Recoverable deferred taxes on AFUDC recorded in plant (b)		1	Plant lives		-			9,630			-			9,887
Losses on reacquired debt		4	Term of related debt		843			7,338			1,048			8,181
State commission adjustments (b)		1	Plant lives		277			4,506			-			4,115
Contract valuation adjustments (c)		1, 8	Term of related contract		2,515			-			1,787			3
Conservation programs		1	Less than one year		2,301			-			1,211			-
Deferred income tax adjustment		1, 5	Typically plant lives		-			1,868			-			3,665
Other			Various		-			342			3,261			574
Total regulatory assets				$	14,133		$	229,910		$	14,084		$	214,402

Regulatory Liabilities
Plant removal costs		10	Plant lives	$	-		$	108,850		$	-		$	106,569
DOE settlement		9	Less than one year		14,484			-			-			-
Investment tax credit deferrals		1, 5	Various		-			9,525			-			10,106
Deferred electric and gas production costs		1	Less than one year		1,869			-			3,514			-
Other			Various		256			812			6,863			643
Total regulatory liabilities				$	16,609		$	119,187		$	10,377		$	117,318

(a)	Includes the non-qualified pension plan.

(b)	Earns a return on investment in the ratemaking process. These amounts are amortized consistent with recovery in rates.

(c)	Includes valuation adjustments on natural gas commodity purchases.