REGULATORY ASSETS AND LIABILITIES

Our primary regulator, the PSCW, considers our regulatory assets and liabilities in two categories, escrowed and deferred. In escrow accounting we expense amounts that are included in rates. If actual costs exceed or are less than the amounts that are allowed in rates, the difference in cost is escrowed on the balance sheet as a regulatory asset or regulatory liability and the escrowed balance is considered in setting future rates. Under deferred cost accounting, we defer amounts to our balance sheet based upon orders or correspondence with our regulators. These deferred costs will be considered in future rate setting proceedings. As of December 31, 2011 and 2010, we had approximately $11.0 million and $16.5 million, respectively, of net regulatory assets that were not earning a return. These regulatory assets are expected to be recovered from customers over a period of one to five years.

In December 2009, the PSCW issued a rate order effective January 1, 2010 that, among other things, reaffirmed our accounting for the regulatory assets and liabilities identified below. The rate order provided for the recovery over an eight year period of specific regulatory assets, the largest of which is the balance of the remaining deferred transmission costs. The order also specified that the deferred Point Beach gain would be passed on to customers as authorized in the prior rate case such that the final credits were issued by the end of 2010.

Our regulatory assets and liabilities as of December 31 consist of:



	2011		2010
	(Millions of Dollars)
Regulatory Assets
Deferred unrecognized pension costs	$	647.8	$	542.6
Deferred income tax related	121.2		89.9
Escrowed electric transmission costs	118.3		138.0
Deferred unrecognized OPEB costs	102.9		85.7
Deferred plant related -- capital lease	73.2		77.1
Deferred environmental costs	48.5		56.7
Other, net	153.8		154.5
Total regulatory assets	$	1,265.7	$	1,144.5

Regulatory Liabilities
Deferred cost of removal obligations	$	728.2	$	723.9
Escrowed bad debt costs	69.0		18.5
Other, net	118.7		156.7
Total regulatory liabilities	$	915.9	$	899.1

Regulatory assets and liabilities that are expected to be amortized within one year are recorded as current on the balance sheet.