2. SIGNIFICANT ACCOUNTING POLICIES

Our significant accounting policies are described in Note 2 of the 2012 Form 10-K. There were no material changes to those accounting policies during the three months ended March 31, 2013. The following are current updates to certain critical accounting policy estimates and accounting standards in general.

Regulatory Accounting

In applying regulatory accounting in accordance with generally accepted accounting principles in the United States of America (GAAP), we capitalize or defer certain costs and revenues as regulatory assets and liabilities. At March 31, 2013 and 2012 and at December 31, 2012, the amounts deferred as regulatory assets and liabilities were as follows:



	Regulatory Assets
	March 31,				December 31,
In thousands	2013		2012		2012
Current:
Unrealized loss on derivatives⁽¹⁾	$	3,450	$	53,697	$	10,796
Pension and other postretirement benefit liabilities⁽²⁾	17,247		15,491		17,247
Other⁽³⁾	18,304		21,302		24,405
Total current	$	39,001	$	90,490	$	52,448
Non-current:
Unrealized loss on derivatives⁽¹⁾	$	642	$	3,947	$	578
Pension balancing⁽²⁾	17,322		8,367		14,727
Income tax asset	53,065		63,452		55,879
Pension and other postretirement benefit liabilities⁽²⁾	178,377		166,639		182,688
Environmental costs⁽⁴⁾	125,671		108,007		121,144
Other⁽³⁾	9,376		13,720		7,239
Total non-current	$	384,453	$	364,132	$	382,255



	Regulatory Liabilities
	March 31,				December 31,
In thousands	2013		2012		2012
Current:
Gas costs	$	8,694	$	35,584	$	9,100
Unrealized gain on derivatives⁽¹⁾	8,054		1,824		1,950
Other⁽³⁾	11,491		12,933		9,742
Total current	$	28,239	$	50,341	$	20,792
Non-current:
Gas costs	$	1,407	$	14,462	$	—
Unrealized gain on derivatives⁽¹⁾	2,836		52		3,639
Accrued asset removal costs	285,437		270,837		281,213
Other⁽³⁾	3,455		2,780		3,261
Total non-current	$	293,135	$	288,131	$	288,113


⁽¹⁾	Unrealized gains or losses on derivatives are non-cash items and therefore do not earn a rate of return or a carrying charge. These amounts are recoverable through utility rates as part of the annual Purchased Gas Adjustment (PGA) mechanism when realized at settlement.


⁽²⁾	Certain utility pension costs are approved for regulatory deferral, including amounts recorded to the pension balancing account, to mitigate the effects of higher and lower pension expenses. Pension costs that are deferred include an interest component when recognized in net periodic benefit costs. See Note 7.


⁽³⁾	Other primarily consists of several deferrals and amortizations under other approved regulatory mechanisms. The accounts being amortized typically earn a rate of return or carrying charge.

⁽⁴⁾

Environmental costs relate to specific sites approved for regulatory deferral by the Public Utility Commission of Oregon (OPUC) and Washington Utilities and Transportation Commission (WUTC). In Oregon, we earn a carrying charge on amounts paid, whereas amounts accrued but not yet paid do not earn a carrying charge until expended. In Washington, a carrying charge related to deferred amounts will be determined in a future proceeding. In the 2012 Oregon general rate case, the OPUC authorized a Site Remediation and Recovery Mechanism (SRRM) that allows the Company to recover prudently incurred environmental costs, subject to an earnings test that will be defined in a rate proceeding that is currently underway. See Note 13.

New Accounting Standards

Adopted Standards

BALANCE SHEET OFFSETTING. In December 2011, the Financial Accounting Standards Board (FASB) issued authoritative guidance regarding the offsetting of assets and liabilities on the balance sheet. The standard is intended to provide more comparable guidance between the GAAP and international accounting standards by requiring entities to disclose both gross and net amounts for assets and liabilities offset on the balance sheet as well as other disclosures concerning their enforceable master netting arrangements. This guidance is effective for annual reporting periods beginning on or after January 1, 2013. The adoption of this standard did not have a material effect on our financial statement disclosures. See Note 12 for our full disclosure.

RECLASSIFICATIONS FROM ACCUMULATED OTHER COMPREHENSIVE INCOME. In February 2013, FASB issued authoritative guidance, which requires an entity to present significant amounts reclassified from each component of accumulated other comprehensive income (AOCI). This standard is intended to improve the reporting of these reclassifications by consolidating the information concerning amounts reclassified into net income from AOCI, which has been presented throughout the financial statements. This guidance is effective for reporting periods beginning after December 15, 2012. The adoption of this standard did not have a material effect on our financial statement disclosures. See Note 7 for our full disclosures.

Recent Accounting Pronouncements

There were no significant accounting standards issued during the first quarter of 2013.

Subsequent Events

There are no subsequent events to report for the period ended March 31, 2013.