NOTE 3: REGULATORY ASSETS, LIABILITIES, AND BALANCING ACCOUNTS

Regulatory Assets

Long-term regulatory assets are composed of the following:

	Balance at
	September 30,		December 31,
(in millions)	2016		2015
Pension benefits	$	2,416	$	2,414
Deferred income taxes		3,649		3,054
Utility retained generation		376		411
Environmental compliance costs		760		748
Price risk management		96		138
Unamortized loss, net of gain, on reacquired debt		81		94
Other		156		170
Total long-term regulatory assets	$	7,534	$	7,029

For more information, see Note 3 of the Notes to the Consolidated Financial Statements in Item 8 of the 2015 Form 10-K.

Regulatory Liabilities

Long-term regulatory liabilities are composed of the following:

	Balance at
	September 30,		December 31,
(in millions)	2016		2015
Cost of removal obligations	$	4,939	$	4,605
Recoveries in excess of asset retirement obligations		656		631
Public purpose programs		539		600
Other		479		485
Total long-term regulatory liabilities	$	6,613	$	6,321

For more information, see Note 3 of the Notes to the Consolidated Financial Statements in Item 8 of the 2015 Form 10-K.

Regulatory Balancing Accounts

The Utility tracks (1) differences between the Utility’s authorized revenue requirement and customer billings, and (2) differences between incurred costs and customer billings. To the extent these differences are probable of recovery or refund over the next 12 months, the Utility records a current regulatory balancing account receivable or payable. Regulatory balancing accounts that the Utility expects to collect or refund over a period exceeding 12 months are recorded as other noncurrent assets – regulatory assets or noncurrent liabilities – regulatory liabilities, respectively, in the Condensed Consolidated Balance Sheets. These differences do not have an impact on net income. Balancing accounts 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 receivable and payable are comprised of the following:

	Receivable
	Balance at
	September 30,		December 31,
(in millions)	2016		2015
Electric distribution	$	43	$	380
Utility generation		-		122
Gas distribution		583		493
Energy procurement		174		262
Public purpose programs		122		155
Other		553		348
Total regulatory balancing accounts receivable	$	1,475	$	1,760

	Payable
	Balance at
	September 30,			December 31,
(in millions)	2016			2015
Utility generation	$	47	$		-
Energy procurement		109			112
Public purpose programs		289			244
Other		319			359
Total regulatory balancing accounts payable	$	764	$		715

The electric distribution, utility generation, and gas distribution balancing accounts track the collection of revenue requirements approved in the GRC. Energy procurement balancing accounts track recovery of costs related to the procurement of electricity, including any environmental compliance-related activities. Public purpose programs balancing accounts are primarily used to record and recover authorized revenue requirements for commission-mandated programs such as energy efficiency and low income energy efficiency.