Regulatory Assets, Liabilities, And Balancing Accounts

9 Months Ended

Sep. 30, 2013

Regulatory Assets, Liabilities, And Balancing Accounts

NOTE 3: REGULATORY ASSETS, LIABILITIES, AND BALANCING ACCOUNTS

Regulatory Assets

Long-Term Regulatory Assets

Long-term regulatory assets are composed of the following:

	Balance at
	September 30,		December 31,
(in millions)	2013		2012
Pension benefits	$	3,356	$	3,275
Deferred income taxes		1,772		1,627
Utility retained generation		515		552
Environmental compliance costs		609		604
Price risk management		144		210
Electromechanical meters		150		194
Unamortized loss, net of gain, on reacquired debt		140		141
Other		141		206
Total long-term regulatory assets	$	6,827	$	6,809

Regulatory Liabilities

Long-Term Regulatory Liabilities

Long-term regulatory liabilities are composed of the following:

	Balance at
	September 30,		December 31,
(in millions)	2013		2012
Cost of removal obligations	$	3,805	$	3,625
Recoveries in excess of asset retirement obligations		674		620
Public purpose programs		594		590
Other		270		253
Total long-term regulatory liabilities	$	5,343	$	5,088

Regulatory Balancing Accounts

                                                The Utility's recovery of a significant portion of revenue requirements and costs is decoupled from the volume of sales.  The Utility records (1) differences between actual customer billings and the Utility's authorized revenue requirement, and (2) differences between incurred costs and customer billings.  To the extent these differences are probable of recovery or refund, the Utility records a regulatory balancing account receivable or payable.  Regulatory balancing accounts receivable and payable will fluctuate during the year based on seasonal electric and gas usage and the timing of when costs are incurred and customer revenues are collected.

Current Regulatory Balancing Accounts, Net

	Receivable (Payable)
	Balance at
	September 30,			December 31,
(in millions)	2013			2012
Distribution revenue adjustment mechanism	$	(3	)	$	219
Utility generation		(22	)		117
Hazardous substance		75			56
Public purpose programs		(100	)		(83	)
Gas fixed cost		179			44
Energy recovery bonds		(170	)		(43	)
Energy procurement		281			77
U.S. Department of Energy Settlement		(279	)		(250	)
GHG allowance auction proceeds (1)		(250	)		-
Other		291			165
Total regulatory balancing accounts, net	$	2		$	302

      ⁽¹⁾ The CARB has adopted regulations that established a state-wide, “cap-and-trade” program (effective January 1, 2013) that sets a

      gradually declining limit on the amount of GHGs that may be emitted each year. This balancing account is used to record proceeds

      collected by the Utility for GHG emission allowances associated with the cap-and-trade program.  These amounts will be refunded

      to customers in future periods.