(I)

Regulatory Assets and Liabilities. We apply the accounting guidance for regulated operations. Regulatory assets represent certain costs that are probable of recovery from our members in future revenues through rates under the wholesale power contracts with our members extending through December 31, 2050. Regulatory liabilities represent certain items of income that we are retaining and that will be applied in the future to reduce revenues required to be recovered from our members.

The following regulatory assets and liabilities are reflected on the unaudited consolidated balance sheets as of March 31, 2016 and December 31, 2015.


			2016		2015
			(dollars in thousands)

Regulatory Assets:
Premium and loss on reacquired debt(a)		$	60,147	$	61,916
Amortization on capital leases(b)			30,759		30,253
Outage costs(c)			56,327		42,027
Interest rate swap termination fees(d)			4,909		5,355
Depreciation expense(e)			45,159		45,514
Deferred charges related to Vogtle Units No. 3 and No. 4 training costs(f)			38,899		37,646
Interest rate options cost(g)			103,713		102,554
Deferral of effects on net margin—Smith Energy Facility(h)			176,857		178,343
Other regulatory assets(m)			37,724		26,646

Total Regulatory Assets		$	554,494	$	530,254
Regulatory Liabilities:
Accumulated retirement costs for other obligations(i)		$	10,728	$	8,910
Deferral of effects on net margin—Hawk Road Energy Facility(h)			20,622		20,775
Major maintenance reserve(j)			24,872		22,422
Amortization on capital leases(b)			25,647		26,502
Deferred debt service adder(k)			78,767		76,334
Asset retirement obligations(l)			12,917		8,316
Other regulatory liabilities(m)			3,798		3,708

Total Regulatory Liabilities		$	177,351	$	166,967

Net Regulatory Assets		$	377,143	$	363,287





(a)	Represents premiums paid, together with unamortized transaction costs related to reacquired debt that are being amortized over the lives of the refunding debt, which range up to 28 years.
(b)	Represents the difference between expense recognized for rate-making purposes and financial statement purposes related to capital lease payments and the aggregate of the amortization of the asset and interest on the obligation.
(c)	Consists of both coal-fired maintenance and nuclear refueling outage costs. Coal-fired maintenance outage costs are amortized on a straight-line basis to expense over a 24-month period. Nuclear refueling outage costs are amortized on a straight-line basis to expense over the 18 to 24-month operating cycles of each unit.
(d)	Represents losses on settled interest rate swap arrangements that are being amortized through 2016 and 2019.
(e)	Prior to Nuclear Regulatory Commission (NRC) approval of a 20-year license extension for Plant Vogtle, we deferred the difference between Plant Vogtle depreciation expense based on the then 40-year operating license and depreciation expense assuming an expected 20-year license extension. Amortization commenced upon NRC approval of the license extension in 2009 and is being amortized over the remaining life of the plant.
(f)	Deferred charges related to Vogtle Units No. 3 and No. 4 training and interest related carrying costs of such training. Amortization will commence effective with the commercial operation date of each unit and amortized to expense over the life of the units.
(g)	Deferral of net loss associated with the unrealized and realized change in fair value of interest rate options purchased to hedge interest rates on certain borrowings related to Vogtle Units No.3 and No.4 construction. Amortization will commence in February 2020 and will be amortized through February 2044, the life of the DOE-guaranteed loan which is financing a portion of the construction project.
(h)	Effects on net margin for Smith and Hawk Road Energy Facilities were deferred through the end of 2015 and are being amortized over the remaining life of each respective plant.
(i)	Represents the accrual of retirement costs associated with long-lived assets for which there are no legal obligations to retire the assets.
(j)	Represents collections for future major maintenance expenses; revenues are recognized as major maintenance costs are incurred.
(k)	Represents collections to fund certain debt payments to be made through the end of 2025 which will be in excess of amounts collected through depreciation expense; the deferred credits will be amortized over the remaining useful life of the plants.
(l)	Represents difference in timing of recognition of the costs of decommissioning for financial statement purposes and for ratemaking purposes.
(m)	The amortization period for other regulatory assets range up to 34 years and the amortization period of other regulatory liabilities range up to 11 years.