Regulatory Assets And Liabilities

12 Months Ended

Dec. 31, 2014

Regulatory Assets And Liabilities [Line Items]

Regulatory Assets and Liabilities

PSE&G prepares its financial statements in accordance with GAAP for regulated utilities as described in Note 1. Organization and Basis of Presentation and Summary of Significant Accounting Policies. PSE&G has deferred certain costs based on rate orders issued by the BPU or the FERC or based on PSE&G’s experience with prior rate cases. Most of PSE&G’s Regulatory Assets and Liabilities as of December 31, 2014 are supported by written orders, either explicitly or implicitly through the BPU’s treatment of various cost items. These costs will be recovered and amortized over various future periods.

Regulatory Assets are subject to prudence reviews and can be disallowed in the future by regulatory authorities. PSE&G believes that all of its Regulatory Assets are probable of recovery. To the extent that collection of any Regulatory Assets or payments of Regulatory Liabilities is no longer probable, the amounts would be charged or credited to income.

PSE&G had the following Regulatory Assets and Liabilities:




	As of December 31,
	2014		2013		Recovery/Refund Period
	Millions
Regulatory Assets
Current
Non-Utility Generation Charge (NGC)	$	—	$	6	Annual filing for recovery (1) (2)
Societal Benefits Charges (SBC)	—		16		Annual filing for recovery (1) (2)
Solar and Energy Efficiency Recovery Charges (formerly RRC and currently Green Program Recovery Charges (GPRC))	13		41		Annual filing for recovery (1) (2)
Solar Pilot Recovery Charge (SPRC)	—		12		Annual filing for recovery (1) (2)
Capital Stimulus Undercollection	—		3		Annual filing for recovery (1) (2)
Weather Normalization Clause (WNC)	—		20		Annual filing for recovery (2)
New Jersey Clean Energy Program	142		142		Annual filing for recovery (1) (2)
Stranded Costs (including $249 in 2014 related to VIEs)	412		—		Through December 2015 (2)
Other	5		3		Various
Total Current Regulatory Assets	$	572	$	243
Noncurrent
Stranded Costs (including $476 in 2013 related to VIEs)	$	—	$	701	Through December 2016 (1) (2)
Manufactured Gas Plant (MGP) Remediation Costs	434		445		Various (2)
Pension and OPEB Costs	1,265		637		Various
Deferred Income Taxes	473		444		Various
Remediation Adjustment Charge (RAC) (Other SBC)	164		144		Through 2021 (1) (2)
Mark-to-Market (MTM) Contracts	75		—		Through 2017
Unamortized Loss on Reacquired Debt and Debt Expense	74		81		Over remaining debt life (1)
Conditional Asset Retirement Obligation	138		123		Various
GPRC	134		151		Various (2)
Electric Cost of Removal	91		23		Reduced as cost is incurred
Storm Damage Deferrals	245		245		To be determined
Other	99		94		Various
Total Noncurrent Regulatory Assets	$	3,192	$	3,088
Total Regulatory Assets	$	3,764	$	3,331




	As of December 31,
	2014		2013		Recovery/Refund Period
	Millions
Regulatory Liabilities
Current
Deferred Income Taxes	$	28	$	31	Various
Overrecovered Gas and Electric Costs—Basic Gas Supply Service (BGSS) and Basic Generation Service (BGS)	80		9		Annual filing for recovery (1) (2)
WNC	31		—		Annual filing for recovery (2)
Gas Margin Adjustment Clause	28		—		Annual filing for recovery (1) (2)
Other	19		3		Various
Total Current Regulatory Liabilities	$	186	$	43
Noncurrent
Electric Cost of Removal	$	133	$	137	Reduced as cost is incurred
MTM Contracts	—		74		Various
Stranded Costs (including $39 and $11 in 2014 and 2013, respectively, related to VIEs)	134		11		Through December 2016 (1) (2)
FERC Formula Rate True-up	26		—		Through December 2016 (1) (2)
Other	4		22		Various
Total Noncurrent Regulatory Liabilities	$	297	$	244
Total Regulatory Liabilities	$	483	$	287


(1)	Recovered/Refunded with interest.


(2)	Recoverable/Refundable per specific rate order.

All Regulatory Assets and Liabilities are excluded from PSE&G’s rate base unless otherwise noted. The Regulatory Assets and Liabilities in the table above are defined as follows:


•	NGC: Represents the difference between the cost of non-utility generation and the amounts realized from selling that energy at market rates through PJM Interconnection, L.L.C. (PJM) and ratepayer collections.

•

SBC: The SBC, as authorized by the BPU and the New Jersey Electric Discount and Energy Competition Act, includes costs related to PSE&G's electric and gas business as follows: (1) the Universal Service Fund (USF); (2) Energy Efficiency and Renewable Energy Programs; (3) Electric bad debt expense; and (4) the RAC for incurred MGP remediation expenditures. All components accrue interest on both over and underrecoveries.


•	GPRC: These costs are amounts associated with various renewable energy and energy efficiency programs. Components of the GPRC include: Carbon Abatement, Energy Efficiency Economic Stimulus Program, Energy Efficiency Economic Extension Program, the Demand Response Program, Solar Generation Investment Program (Solar 4 All), Solar 4 All Extension, Solar Loan II Program and Solar Loan III Program.

•

SPRC: This charge is designed to recover the revenue requirements associated with the PSE&G Solar Pilot Program (Solar Loan I) per a BPU Order, less the net proceeds from the sale of associated Solar Renewable Energy Certificates (SRECs) or cash received in lieu of SRECs. The net recovery is subject to deferred accounting. Interest at the two-year constant maturity treasury rate plus 60 basis points will be accrued monthly on any under- or over-recovered balances.


•	Capital Stimulus Undercollection: PSE&G has received approval from the BPU for programs that provide for accelerated investment in utility infrastructure. The goal of these accelerated capital investments is to improve the reliability of PSE&G's infrastructure and New Jersey's economy through job creation.


•	WNC Deferral: This represents the over- or under- collection of gas margin refundable or recoverable under the BPU's weather normalization clause. The WNC requires PSE&G to calculate, at the end of each October-to-May period, the level by which margin revenues differed from what would have resulted if normal weather had occurred.


•	New Jersey Clean Energy Program: The BPU approved future funding requirements for Energy Efficiency and Renewable Energy Programs through the first half of 2013. Once the rates are measured, they are recovered through the SBC.

•

Stranded Costs: This reflects deferred costs, which are being recovered through the securitization transition charges authorized by the BPU in irrevocable financing orders and being collected by PSE&G, as servicer on behalf of Transition Funding and Transition Funding II, respectively. Collected funds are remitted to Transition Funding and Transition Funding II and are used for interest and principal payments on the transition bonds and related costs and taxes.

Transition Funding and Transition Funding II are wholly owned, bankruptcy-remote subsidiaries of PSE&G that purchased certain transition property from PSE&G and issued transition bonds secured by such property. The transition property consists principally of the rights to receive electricity consumption-based per kilowatt-hour (kWh) charges from PSE&G's electric distribution customers, which represent irrevocable rights to receive amounts sufficient to recover certain of PSE&G's transition costs related to deregulation, as approved by the BPU.


•	MGP Remediation Costs: Represents the low end of the range for the remaining environmental investigation and remediation program cleanup costs for manufactured gas plants that are probable of recovery in future rates. Once these costs are incurred, they are recovered through the RAC in the SBC.

•

Pension and OPEB Costs: Pursuant to the adoption of accounting guidance for employers' defined benefit pension and OPEB plans, PSE&G recorded the unrecognized costs for defined benefit pension and other OPEB plans on the balance sheet as a Regulatory Asset. These costs represent actuarial gains or losses, prior service costs and transition obligations as a result of adoption, which have not been expensed. These costs are amortized and recovered in future rates.


•	Deferred Income Taxes: These amounts represent the portion of deferred income taxes that will be recovered or refunded through future rates, based upon established regulatory practices.


•	Remediation Adjustment Charge (RAC) (Other SBC): Costs incurred to clean up manufactured gas plants which are recovered over seven years.


•	MTM Contracts: The estimated fair value of gas hedge contracts and gas cogeneration supply contracts.The regulatory asset/liability is offset by a derivative asset/liability and, with respect to the gas hedge contracts only, an intercompany receivable/payable on the Consolidated Balance Sheets.


•	Unamortized Loss on Reacquired Debt and Debt Expense: Represents losses on reacquired long-term debt and expenses associated with issuances of new debt, which are recovered through rates over the remaining life of the debt.


•	Conditional Asset Retirement Obligation: These costs represent the differences between rate regulated cost of removal accounting and asset retirement accounting under GAAP. These costs will be recovered in future rates.


•	Storm Damage Deferrals: Costs incurred in the cleanup of major storms in 2010 through 2014. This includes $240 million of storm costs, primarily as a result of Hurricane Irene and Superstorm Sandy, approved for future recovery under a BPU Order received in September 2014.


•	Overrecovered Gas and Electric Costs: These costs represent the net overrecovered amounts associated with BGSS and BGS, as approved by the BPU. For BGS, interest is accrued on both overrecovered and underrecovered balances. For BGSS, interest is accrued only on overrecovered balances from residential customers.


•	Gas Margin Adjustment Clause: This mechanism credits Firm delivery customers for net distribution margin revenue collected from Transportation Gas Service Non-Firm (TSG-NF) delivery customers. The balance represents the difference between the net margin collected from the TSG-NF Customers versus bill credits provided to Firm delivery customers.


•	Electric Cost of Removal: PSE&G accrues and collects for cost of removal in rates. The liability for non-legally required cost of removal is classified as a Regulatory Liability. This liability is reduced as removal costs are incurred. Accumulated cost of removal is a reduction to the rate base.


•	FERC Formula Rate True-up: Overcollection or undercollection of transmission earnings calculated using a FERC approved formula.

Significant 2014 regulatory orders received and currently pending rate filings with the FERC and the BPU by PSE&G are as follows:


•	RAC—On February 11, 2015, the BPU approved PSE&G’s filing with respect to its RAC 21 petition allowing recovery of $66 million related to net MGP expenditures from August 1, 2012 through July 31, 2013.


•	BGSS—In January and February 2014, PSE&G filed self-implementing one-month BGSS residential customer bill credits with the BPU for 25 cents per therm for the months of February and March 2014. These credits provided approximately $93 million in total credits to residential customers, reducing the BGSS deferred balance. On April 1, 2014, the BGSS rate reverted back to the current rate.

In May 2014, PSE&G made its annual BGSS filing with the BPU requesting a reduction of $112 million in annual BGSS revenues. In September 2014, the BPU approved a Stipulation in this matter on a provisional basis and the BGSS rate was reduced from approximately 54 cents to 45 cents per therm effective October 1, 2014.

In October 2014, PSE&G filed a self-implementing three-month bill credit for residential customers to be effective during November and December 2014 and January 2015. This credit is 28 cents per therm for the three-month period and is estimated to provide approximately $160 million to customers. In January 2015, PSE&G filed a letter with the BPU to extend the three-month bill credit for two additional months through February and March 2015 which is estimated to provide an additional approximate $100 million to customers. The specific amount returned will depend on actual usage over that period.


•	Storm Damage Deferrals—In September 2014, the BPU approved a Stipulation finding that PSE&G's 2010 through 2012 major storm incremental O&M costs of $240 million (deferred as Regulatory Assets) and capital expenditures of $126 million were prudent and recoverable in a future base rate proceeding, subject to offset for the amount of insurance proceeds received.

•

WNC—In April 2014, the BPU approved PSE&G's filing with respect to deficiency revenues from the 2012-2013 Winter Period. The BPU’s approval of a final WNC resulted in no change to the provisional rate previously approved by the BPU and implemented effective October 1, 2013, which was set to recover $26 million from customers during the 2013-2014 Winter Period (October 1, 2013 through May 31, 2014).

In September 2014, the BPU provisionally approved PSE&G’s filing with respect to excess revenues collected during the colder than normal 2013-2014 Winter Period. Effective October 1, 2014, PSE&G is returning $45 million in revenues to its customers during the 2014-2015 Winter Period as a result of excess revenues collected during the colder than normal 2013-2014 Winter Period (October 1, 2014 through May 31, 2015).

•

USF/Lifeline—The USF is an energy assistance program mandated by the BPU and funded through the SBC clause mechanism to provide payment assistance to low income customers. The Lifeline program is a separate mandated energy assistance program to provide payment assistance to elderly and disabled customers. In September 2014, the BPU approved rates set to recover costs incurred under the USF/Lifeline energy assistance programs effective October 1, 2014. PSE&G earns no margin on the collection of the USF and Lifeline programs resulting in no impact on Net Income.


•	Capital Stimulus Infrastructure Programs (CIP II)—In June 2014, the BPU approved PSE&G’s petition to recover annual revenue requirements of approximately $28 million for program costs incurred for its CIP II investments through September 30, 2013, which represents the final phase of the program. Base rates were adjusted effective July 1, 2014 to reflect the recovery.


•	SBC and NGC—In May 2014, the BPU approved PSE&G’s petition to recover actual SBC and NGC costs incurred through December 31, 2013 under its Energy Efficiency & Renewable Energy Programs, Social Programs and NGC. New rates were implemented on June 1, 2014 to recover approximately $400 million over the succeeding 12 months.

•

Transmission Formula Rate Filings—In May 2014, PSE&G filed its 2014 True-Up Adjustment pertaining to its formula rates in effect for 2013, which resulted in an adjustment of $5 million above the 2013 filed revenues. In accordance with PSE&G’s formula rate protocols, this Rate Year 2013 True-Up Adjustment has been incorporated into its Annual Formula Rate Update for the 2015 Rate Year. The 2015 Formula Rate Update filed with the FERC in October 2014 for approximately $182 million in increased annual transmission revenues went into effect on January 1, 2015.

•

Energy Strong Recovery Filing—In December 2014, PSE&G updated its initial Energy Strong cost recovery petition, seeking BPU approval to recover in base rates an estimated annual revenue increase of $1.1 million effective March 1, 2015. This increase represents capitalized Energy Strong electric investment costs in service through November 30, 2014. Pursuant to a Stipulation, the BPU approved PSE&G’s request on February 11, 2015.

•

GPRC—In June 2014, PSE&G filed a petition with the BPU requesting recovery of costs and investments in the combined eight components of the electric and gas GPRC for the period October 1, 2014 through September 30, 2015. The rates proposed in our filing are designed to recover $111 million and $18 million in electric and gas revenues, respectively, on an annual basis. This matter is currently pending.


•	RAC—In December 2014, PSE&G filed a petition with the BPU requesting recovery of $86 million related to RAC 22 net MGP expenditures from August 1, 2013 through July 31, 2014. This matter is currently pending.

PSE&G [Member]

Regulatory Assets And Liabilities [Line Items]

Regulatory Assets And Liabilities

Regulatory Assets and Liabilities

PSE&G had the following Regulatory Assets and Liabilities:




	As of December 31,
	2014		2013		Recovery/Refund Period
	Millions
Regulatory Assets
Current
Non-Utility Generation Charge (NGC)	$	—	$	6	Annual filing for recovery (1) (2)
Societal Benefits Charges (SBC)	—		16		Annual filing for recovery (1) (2)
Solar and Energy Efficiency Recovery Charges (formerly RRC and currently Green Program Recovery Charges (GPRC))	13		41		Annual filing for recovery (1) (2)
Solar Pilot Recovery Charge (SPRC)	—		12		Annual filing for recovery (1) (2)
Capital Stimulus Undercollection	—		3		Annual filing for recovery (1) (2)
Weather Normalization Clause (WNC)	—		20		Annual filing for recovery (2)
New Jersey Clean Energy Program	142		142		Annual filing for recovery (1) (2)
Stranded Costs (including $249 in 2014 related to VIEs)	412		—		Through December 2015 (2)
Other	5		3		Various
Total Current Regulatory Assets	$	572	$	243
Noncurrent
Stranded Costs (including $476 in 2013 related to VIEs)	$	—	$	701	Through December 2016 (1) (2)
Manufactured Gas Plant (MGP) Remediation Costs	434		445		Various (2)
Pension and OPEB Costs	1,265		637		Various
Deferred Income Taxes	473		444		Various
Remediation Adjustment Charge (RAC) (Other SBC)	164		144		Through 2021 (1) (2)
Mark-to-Market (MTM) Contracts	75		—		Through 2017
Unamortized Loss on Reacquired Debt and Debt Expense	74		81		Over remaining debt life (1)
Conditional Asset Retirement Obligation	138		123		Various
GPRC	134		151		Various (2)
Electric Cost of Removal	91		23		Reduced as cost is incurred
Storm Damage Deferrals	245		245		To be determined
Other	99		94		Various
Total Noncurrent Regulatory Assets	$	3,192	$	3,088
Total Regulatory Assets	$	3,764	$	3,331




	As of December 31,
	2014		2013		Recovery/Refund Period
	Millions
Regulatory Liabilities
Current
Deferred Income Taxes	$	28	$	31	Various
Overrecovered Gas and Electric Costs—Basic Gas Supply Service (BGSS) and Basic Generation Service (BGS)	80		9		Annual filing for recovery (1) (2)
WNC	31		—		Annual filing for recovery (2)
Gas Margin Adjustment Clause	28		—		Annual filing for recovery (1) (2)
Other	19		3		Various
Total Current Regulatory Liabilities	$	186	$	43
Noncurrent
Electric Cost of Removal	$	133	$	137	Reduced as cost is incurred
MTM Contracts	—		74		Various
Stranded Costs (including $39 and $11 in 2014 and 2013, respectively, related to VIEs)	134		11		Through December 2016 (1) (2)
FERC Formula Rate True-up	26		—		Through December 2016 (1) (2)
Other	4		22		Various
Total Noncurrent Regulatory Liabilities	$	297	$	244
Total Regulatory Liabilities	$	483	$	287


(1)	Recovered/Refunded with interest.


(2)	Recoverable/Refundable per specific rate order.

All Regulatory Assets and Liabilities are excluded from PSE&G’s rate base unless otherwise noted. The Regulatory Assets and Liabilities in the table above are defined as follows:


•	NGC: Represents the difference between the cost of non-utility generation and the amounts realized from selling that energy at market rates through PJM Interconnection, L.L.C. (PJM) and ratepayer collections.

•


•	GPRC: These costs are amounts associated with various renewable energy and energy efficiency programs. Components of the GPRC include: Carbon Abatement, Energy Efficiency Economic Stimulus Program, Energy Efficiency Economic Extension Program, the Demand Response Program, Solar Generation Investment Program (Solar 4 All), Solar 4 All Extension, Solar Loan II Program and Solar Loan III Program.

•


•	Capital Stimulus Undercollection: PSE&G has received approval from the BPU for programs that provide for accelerated investment in utility infrastructure. The goal of these accelerated capital investments is to improve the reliability of PSE&G's infrastructure and New Jersey's economy through job creation.


•	WNC Deferral: This represents the over- or under- collection of gas margin refundable or recoverable under the BPU's weather normalization clause. The WNC requires PSE&G to calculate, at the end of each October-to-May period, the level by which margin revenues differed from what would have resulted if normal weather had occurred.


•	New Jersey Clean Energy Program: The BPU approved future funding requirements for Energy Efficiency and Renewable Energy Programs through the first half of 2013. Once the rates are measured, they are recovered through the SBC.

•


•	MGP Remediation Costs: Represents the low end of the range for the remaining environmental investigation and remediation program cleanup costs for manufactured gas plants that are probable of recovery in future rates. Once these costs are incurred, they are recovered through the RAC in the SBC.

•


•	Deferred Income Taxes: These amounts represent the portion of deferred income taxes that will be recovered or refunded through future rates, based upon established regulatory practices.


•	Remediation Adjustment Charge (RAC) (Other SBC): Costs incurred to clean up manufactured gas plants which are recovered over seven years.


•	MTM Contracts: The estimated fair value of gas hedge contracts and gas cogeneration supply contracts.The regulatory asset/liability is offset by a derivative asset/liability and, with respect to the gas hedge contracts only, an intercompany receivable/payable on the Consolidated Balance Sheets.


•	Unamortized Loss on Reacquired Debt and Debt Expense: Represents losses on reacquired long-term debt and expenses associated with issuances of new debt, which are recovered through rates over the remaining life of the debt.


•	Conditional Asset Retirement Obligation: These costs represent the differences between rate regulated cost of removal accounting and asset retirement accounting under GAAP. These costs will be recovered in future rates.


•	Storm Damage Deferrals: Costs incurred in the cleanup of major storms in 2010 through 2014. This includes $240 million of storm costs, primarily as a result of Hurricane Irene and Superstorm Sandy, approved for future recovery under a BPU Order received in September 2014.


•	Overrecovered Gas and Electric Costs: These costs represent the net overrecovered amounts associated with BGSS and BGS, as approved by the BPU. For BGS, interest is accrued on both overrecovered and underrecovered balances. For BGSS, interest is accrued only on overrecovered balances from residential customers.


•	Gas Margin Adjustment Clause: This mechanism credits Firm delivery customers for net distribution margin revenue collected from Transportation Gas Service Non-Firm (TSG-NF) delivery customers. The balance represents the difference between the net margin collected from the TSG-NF Customers versus bill credits provided to Firm delivery customers.


•	Electric Cost of Removal: PSE&G accrues and collects for cost of removal in rates. The liability for non-legally required cost of removal is classified as a Regulatory Liability. This liability is reduced as removal costs are incurred. Accumulated cost of removal is a reduction to the rate base.


•	FERC Formula Rate True-up: Overcollection or undercollection of transmission earnings calculated using a FERC approved formula.

Significant 2014 regulatory orders received and currently pending rate filings with the FERC and the BPU by PSE&G are as follows:


•	RAC—On February 11, 2015, the BPU approved PSE&G’s filing with respect to its RAC 21 petition allowing recovery of $66 million related to net MGP expenditures from August 1, 2012 through July 31, 2013.


•	BGSS—In January and February 2014, PSE&G filed self-implementing one-month BGSS residential customer bill credits with the BPU for 25 cents per therm for the months of February and March 2014. These credits provided approximately $93 million in total credits to residential customers, reducing the BGSS deferred balance. On April 1, 2014, the BGSS rate reverted back to the current rate.


•	Storm Damage Deferrals—In September 2014, the BPU approved a Stipulation finding that PSE&G's 2010 through 2012 major storm incremental O&M costs of $240 million (deferred as Regulatory Assets) and capital expenditures of $126 million were prudent and recoverable in a future base rate proceeding, subject to offset for the amount of insurance proceeds received.

•


•	Capital Stimulus Infrastructure Programs (CIP II)—In June 2014, the BPU approved PSE&G’s petition to recover annual revenue requirements of approximately $28 million for program costs incurred for its CIP II investments through September 30, 2013, which represents the final phase of the program. Base rates were adjusted effective July 1, 2014 to reflect the recovery.


•	SBC and NGC—In May 2014, the BPU approved PSE&G’s petition to recover actual SBC and NGC costs incurred through December 31, 2013 under its Energy Efficiency & Renewable Energy Programs, Social Programs and NGC. New rates were implemented on June 1, 2014 to recover approximately $400 million over the succeeding 12 months.

•


•	RAC—In December 2014, PSE&G filed a petition with the BPU requesting recovery of $86 million related to RAC 22 net MGP expenditures from August 1, 2013 through July 31, 2014. This matter is currently pending.