Note 10 - Rate Regulation

The following table details regulatory assets and liabilities:



	December 31, 2011				December 31, 2010
	Current		Noncurrent		Current		Noncurrent
	(in millions)
Regulatory assets:
Questar Pipeline
Gas imbalance	$	2.8	$	—	$	0.8	$	—
Revenue sharing	2.4		—		—		—
Cost of reacquired debt	—		3.3		—		3.7
Income taxes recoverable from customers	—		1.2		—		1.6
Other	—		1.4		—		1.4
Total Questar Pipeline regulatory assets	5.2		5.9		0.8		6.7
Questar Gas
DSM	24.2		—		39.7		—
Purchased-gas adjustment	—		—		10.7		—
Deferred production taxes	2.3		—		2.3		—
Cost of reacquired debt	—		5.9		—		6.4
Pipeline integrity costs	—		6.5		—		5.6
ARO cost-of-service gas wells	—		2.7		—		3.0
Total Questar Gas regulatory assets	26.5		15.1		52.7		15.0
Total regulatory assets	$	31.7	$	21.0	$	53.5	$	21.7

Regulatory liabilities:
Questar Pipeline
Gas imbalance	$	0.9	$	—	$	3.1	$	—
Revenue sharing	0.3		—		0.1		—
Postretirement medical	—		7.4		—		6.9
Total Questar Pipeline regulatory liabilities	1.2		7.4		3.2		6.9
Questar Gas
Purchased-gas adjustment	10.8		—		—		—
CET	3.2		—		2.8		—
Other	0.2		—		—		—
Income taxes refundable to customers	—		0.7		—		0.9
Total Questar Gas regulatory liabilities	14.2		0.7		2.8		0.9
Total regulatory liabilities	$	15.4	$	8.1	$	6.0	$	7.8

Questar Pipeline and Questar Gas record regulatory assets and liabilities. They recover the costs of assets but do not generally receive a return on these assets.

Following is a description of Questar Pipeline's regulatory assets and liabilities:


-	Gains and losses on the reacquisition of debt are deferred and amortized as interest expense over the would-be remaining life of the reacquired debt. The reacquired debt costs had a weighted-average life of approximately 9 years as of December 31, 2011.


-	Certain deferred taxes from customers over the life of the related property, plant and equipment.


-	Regulatory assets and liabilities for gas imbalances, fuel over or under recovered and sharing interruptible revenues with customers.


-	A regulatory liability for the collection of postretirement medical costs allowed in rates in excess of actual charges.

Following is a description of Questar Gas's regulatory assets and liabilities:


-	Gains and losses on the reacquisition of debt by rate-regulated companies are deferred and amortized as interest expense over the would-be remaining life of the reacquired debt. The reacquired debt costs had a weighted-average life of approximately 11 years as of December 31, 2011.


-	The DSM program asset represents funds expended for promoting the conservation of natural gas through advertising, rebates for efficient homes and appliances, and energy audits. These costs are deferred and recovered from customers through periodic rate adjustments.


-	The costs of complying with pipeline-integrity regulations are recovered in rates subject to a PSCU order. Questar Gas is allowed to recover $4.4 million per year. Costs incurred in excess of this amount will be recovered in future rate changes.


-	A regulatory asset that represents future expenses related to abandonment of Wexpro operated gas and oil wells. The regulatory asset will be reduced over an 18-year period following an amortization schedule that commenced January 1, 2003, or as cash is paid to plug and abandon wells.


-	Production taxes on cost-of-service gas production are recorded when the gas is produced and recovered from customers when taxes are paid, generally within 12 months.


-	Certain deferred taxes from customers over the life of the related property, plant and equipment.


-	Purchased-gas costs that are different from those provided for in present rates are accumulated and recovered or credited through future rate changes.


-	The CET liability represents actual revenues received that are in excess of the allowed revenues. These amounts are refunded through periodic rate adjustments.


-	Income taxes refundable to customers arise from adjustments to deferred taxes.

Rate Changes

On April 8, 2010, the PSCU approved a settlement in Questar Gas's Utah general rate case. The stipulation, effective August 1, 2010, authorized an increase in the utility's allowed return on equity from 10% to 10.35% and indefinitely extended the existing CET. In the stipulation, the PSCU approved an infrastructure cost-tracking mechanism that allows the company to place into rate base and earn on capital expenditures associated with a multi-year high-pressure natural gas feeder-line replacement program, and do it immediately upon the completion of each project. The stipulation agreement increased customer rates by $5.0 million annually with the changes in rates effective August 1, 2010.

In November 2011, Questar Gas filed a general rate case in Wyoming, requesting an increase in rates of $1.0 million and a 10.25% return on equity.