12.	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 shown on the consolidated balance sheets of NSP-Wisconsin at Dec. 31, 2012 and Dec. 31, 2011 are:

	See		Remaining
(Thousands of Dollars)	Notes		Amortization Period	Dec. 31, 2012				Dec. 31, 2011
Regulatory Assets				Current		Noncurrent		Current		Noncurrent
Environmental remediation costs		1, 11	Various	$	2,521	$	109,162	$	-	$	108,181
Pension and retiree medical obligations (a)		7	Various		7,328		104,426		8,197		98,045
Recoverable deferred taxes on AFUDC
recorded in plant		1	Plant lives		-		10,458		-		9,630
Losses on reacquired debt		4	Term of related debt		800		6,538		843		7,338
State commission adjustments		1	Plant lives		339		7,533		277		4,506
Contract valuation adjustments (b)		1, 9	Term of related contract		11		-		2,515		-
Conservation programs		1	Less than one year		691		-		2,301		-
Deferred income tax adjustment		1, 6	Typically plant lives		-		1,974		-		1,868
Recoverable purchased natural gas costs			Less than one year		358		-		-		-
Other			Various		-		368		-		342
Total regulatory assets				$	12,048	$	240,459	$	14,133	$	229,910

(a)	Includes the non-qualified pension plan.

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

The components of regulatory liabilities shown on the consolidated balance sheets of NSP-Wisconsin at Dec. 31, 2012 and Dec. 31, 2011 are:

	See		Remaining
(Thousands of Dollars)	Notes		Amortization Period	Dec. 31, 2012				Dec. 31, 2011
Regulatory Liabilities				Current		Noncurrent		Current		Noncurrent
Plant removal costs		11	Plant lives	$	-	$	113,949	$	-	$	108,850
DOE settlement		11	Less than one year		5,628		-		14,484		-
Investment tax credit deferrals		1, 6	Various		-		9,626		-		9,525
Conservation programs		1	Less than one year		73		-		-		-
Deferred electric energy costs		1	Less than one year		134		-		1,869		-
Other			Various		251		171		256		812
Total regulatory liabilities				$	6,086	$	123,746	$	16,609	$	119,187

At Dec. 31, 2012, approximately $0.4 million of NSP-Wisconsin's regulatory assets represented past expenditures not currently earning a return. This amount primarily includes recoverable purchased natural gas costs.