Regulatory Assets and Liabilities

Regulatory Assets

SCE's regulatory assets included on the consolidated balance sheets are:



(in millions)	September 30, 2015		December 31, 2014
Current:
Regulatory balancing accounts	$	287	$	1,088
Energy derivatives	167		159
Other	19		7
Total current	473		1,254
Long-term:
Deferred income taxes, net	3,949		3,405
Pensions and other postretirement benefits	1,206		1,218
Energy derivatives	990		850
Unamortized investments, net	198		255
San Onofre	1,130		1,288
Unamortized loss on reacquired debt	205		201
Regulatory balancing accounts	58		44
Other	385		351
Total long-term	8,121		7,612
Total regulatory assets	$	8,594	$	8,866

Regulatory Liabilities

SCE's regulatory liabilities included on the consolidated balance sheets are:



(in millions)	September 30, 2015		December 31, 2014
Current:
Regulatory balancing accounts	$	547	$	380
Other	341		21
Total current	888		401
Long-term:
Costs of removal	2,713		2,826
Recoveries in excess of ARO liabilities¹	1,393		1,956
Regulatory balancing accounts	1,081		1,083
Other	78		24
Total long-term	5,265		5,889
Total regulatory liabilities	$	6,153	$	6,290

Represents the cumulative differences between ARO expenses and amounts collected in rates primarily for the decommissioning of the SCE's nuclear generation facilities. Decommissioning costs recovered through rates are primarily placed in nuclear decommissioning trusts. This regulatory liability also represents the deferral of realized and unrealized gains and losses on the nuclear decommissioning trust investments. See Note 9.

As discussed in Note 1, SCE has recognized CPUC-related revenue largely based on the revenue requirement set forth in the proposed 2015 GRC decision. As a result of the proposed decision, SCE recorded a current regulatory liability to refund customers $318 million of the 2014 authorized base revenue requirements included in customer rates for the nine months ended September 30, 2015.

The 2015 GRC proposed decision includes a reduction in 2015 base rate revenue requirement of approximately $40 million through a rate base adjustment of $344 million as determined by the CPUC to achieve a benefit to customers equal to the increased future customer costs attributable to SCE's election related to 2012 – 2014 tax repairs. In SCE's filed comments, it requested a modification to eliminate the rate base adjustment on the basis of a number of legal errors including, among other items, that the rate base adjustment affecting the revenue requirements is prohibited as retroactive rate making. As of September 30, 2015, SCE had recorded a regulatory asset, included in the table above, of approximately $380 million related to future cash taxes associated with incremental 2012 – 2014 repair deductions. SCE has not recorded the potential impact from the rate base adjustment or 2015 incremental repair deductions pending a final decision that would provide clarity on the tax accounting treatment. SCE cannot predict the outcome of this matter. If the final decision mandates future reductions in revenue requirements, SCE would reduce 2015 revenue by the amount determined in the final decision and may record a charge against income to write down some or all of the above regulatory asset.

Net Regulatory Balancing Accounts

The following table summarizes the significant components of regulatory balancing accounts included in the above tables of regulatory assets and liabilities:



(in millions)	September 30, 2015			December 31, 2014
Asset (liability)
Energy resource recovery account	$	(112	)	$	1,028
New system generation balancing account	(71		)	35
Public purpose programs and energy efficiency programs	(754		)	(874		)
Base rate recovery balancing account	(79		)	(5		)
Greenhouse gas auction revenue	(142		)	(182		)
FERC balancing accounts	16			(32		)
Generator settlements	(3		)	(197		)
Other	(138		)	(104		)
Liability	$	(1,283	)	$	(331	)