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 nine months ended September 30, 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. The amounts deferred as regulatory assets and liabilities were as follows:



	Regulatory Assets
	September 30,				December 31,
In thousands	2013		2012		2012
Current:
Unrealized loss on derivatives⁽¹⁾	$	8,275	$	17,156	$	10,796
Other⁽²⁾	18,018		36,735		41,652
Total current	$	26,293	$	53,891	$	52,448
Non-current:
Unrealized loss on derivatives⁽¹⁾	$	1,404	$	615	$	578
Pension balancing⁽³⁾	22,976		12,909		14,727
Income tax asset	53,065		58,437		55,879
Pension and other postretirement benefit liabilities⁽³⁾	187,000		158,894		182,688
Environmental costs⁽⁴⁾	118,029		123,178		121,144
Other⁽²⁾	5,202		8,439		7,239
Total non-current	$	387,676	$	362,472	$	382,255



	Regulatory Liabilities
	September 30,				December 31,
In thousands	2013		2012		2012
Current:
Gas costs	$	3,096	$	10,069	$	9,100
Unrealized gain on derivatives⁽¹⁾	1,386		6,771		1,950
Other⁽²⁾	12,024		7,970		9,742
Total current	$	16,506	$	24,810	$	20,792
Non-current:
Gas costs	$	11	$	596	$	—
Unrealized gain on derivatives⁽¹⁾	1,682		5,608		3,639
Accrued asset removal costs	293,005		278,897		281,213
Other⁽²⁾	3,522		2,996		3,261
Total non-current	$	298,220	$	288,097	$	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⁾	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.


⁽³⁾	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.

⁽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 our 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. For further information on environmental matters, see Note 13 and Note 15.

New Accounting Standards

Recent Accounting Pronouncements

OBLIGATIONS RESULTING FROM JOINT AND SEVERAL LIABILITY ARRANGEMENTS. In February 2013, the Financial Accounting Standards Board (FASB) issued guidance regarding the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date. Under the new guidance, an entity is required to measure fixed obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors plus any additional amount the reporting entity expects to pay on behalf of its co-obligors. In addition, an entity must disclose the nature and amount of the obligation as well as other information about the obligations. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. We are currently assessing the impact, if any, of this guidance on our financial position, results of operations, or disclosures.

PRESENTATION OF UNRECOGNIZED TAX BENEFIT. In July 2013, the FASB issued guidance that requires an unrecognized tax benefit, or a portion of an unrecognized tax benefit, be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except under certain circumstances as outlined in the standard. The new guidance is effective for annual and interim periods within those annual periods, beginning after December 15, 2013, with early adoption permitted. This guidance is not expected to have an impact on our financial position, results of operations, and disclosures.

Subsequent Events

See Note 15 for information regarding the environmental settlement we filed with the OPUC and the regulatory treatment of our Gasco water treatment station.