Regulatory Assets and Liabilities

As a result of the permanent retirement of San Onofre, SCE has reclassified at May 31, 2013, $1,521 million of its investment including property, plant and equipment, nuclear fuel and inventory, and other assets to a regulatory asset. The San Onofre regulatory asset will increase or decrease in subsequent periods based on the difference between authorized revenue related to San Onofre and actual cost of service that is expected to be recovered. In June 2013, SCE cost of service, including severance costs of $56 million, exceeded authorized revenue by $32 million resulting in an increase in the San Onofre regulatory asset.

As of June 30, 2013, SCE also recorded a regulatory asset for recovery of $33 million of estimated costs associated with the cancellation and management of future deliveries of nuclear fuel. See Note 12 for further information.

Regulatory Assets

Regulatory assets included on the consolidated balance sheets are:



(in millions)	June 30, 2013		December 31, 2012
Current:
Regulatory balancing accounts	$	709	$	502
Energy derivatives	94		70
Total Current	803		572
Long-term:
Deferred income taxes, net	2,759		2,663
Pensions and other postretirement benefits	1,119		1,550
Energy derivatives	990		900
Unamortized investments, net	363		507
San Onofre	1,584		—
Unamortized loss on reacquired debt	218		228
Nuclear-related investment, net	35		141
Regulatory balancing accounts	78		73
Other	348		360
Total Long-term	7,494		6,422
Total Regulatory Assets	$	8,297	$	6,994

Regulatory Liabilities

Regulatory liabilities included on the consolidated balance sheets are:



(in millions)	June 30, 2013		December 31, 2012
Current:
Regulatory balancing accounts	$	443	$	484
Other	50		52
Total Current	493		536
Long-term:
Costs of removal	2,791		2,731
Asset Retirement Obligations	853		1,385
Regulatory balancing accounts	1,183		1,091
Other	9		7
Total Long-term	4,836		5,214
Total Regulatory Liabilities	$	5,329	$	5,750

The regulatory liability related to asset retirement obligations represents the nuclear decommissioning trust assets in excess of the related asset retirement obligations. The decrease in this regulatory liability during June 2013 results from a revision to the asset retirement obligations of San Onofre. For further information, see Note 1.