Property Plant and Equipment

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT

The following table summarizes the components of the electric generation and distribution assets and other property, plant and equipment (in millions) with their estimated useful lives (in years). The amounts are stated net of all prior asset impairment losses recognized.

		December 31,
	Estimated Useful Life	2018			2017
Electric generation and distribution facilities	7-40	$	22,875		$	21,529
Other buildings	5-72	1,651			1,971
Furniture, fixtures and equipment	3-25	310			284
Other	5-44	406			335
Total electric generation and distribution assets and other		25,242			24,119
Accumulated depreciation		(8,227		)	(7,942		)
Net electric generation and distribution assets and other		$	17,015		$	16,177

The following table summarizes depreciation expense (including the amortization of assets recorded under capital leases and the amortization of asset retirement obligations) and interest capitalized during development and construction on qualifying assets for the periods indicated (in millions):

Years Ended December 31,	2018		2017		2016
Depreciation expense	$	960	$	1,005	$	1,002
Interest capitalized during development and construction	199		139		118

Property, plant and equipment, net of accumulated depreciation, of $11 billion and $10 billion was mortgaged, pledged or subject to liens as of December 31, 2018 and 2017, respectively, including assets classified as held-for-sale.

The following table summarizes regulated and non-regulated generation and distribution property, plant and equipment and accumulated depreciation as of the dates indicated (in millions):

December 31,	2018			2017
Regulated generation, distribution assets and other, gross	$	8,959		$	8,093
Regulated accumulated depreciation	(3,504		)	(3,357		)
Regulated generation, distribution assets and other, net	5,455			4,736
Non-regulated generation, distribution assets and other, gross	16,283			16,026
Non-regulated accumulated depreciation	(4,723		)	(4,585		)
Non-regulated generation, distribution assets and other, net	11,560			11,441
Net electric generation, distribution assets and other	$	17,015		$	16,177

The following table presents amounts recognized related to asset retirement obligations for the periods indicated (in millions):

	2018			2017
Balance at January 1	$	368		$	357
Additional liabilities incurred	19			1
Liabilities settled	(14		)	(21		)
Accretion expense	18			16
Change in estimated cash flows	24			25
Other	—			(10		)
Balance at December 31	$	415		$	368

The Company's asset retirement obligations include active ash landfills, water treatment basins and the removal or dismantlement of certain plants and equipment. The $24 million increase in estimated cash flows in 2018 is primarily due to an increase of $55 million in estimated ash pond closure costs and revised closure dates associated with an EPA rule regulating CCR at IPL and an increase in coal pile remediation costs at DPL. These were partially offset by a decrease of $32 million due to reductions in estimated closure costs associated with ash ponds and landfills at DPL resulting in a reduction to Cost of Sales on the Consolidated Statements of Operations.

The Company used the cost approach to determine the fair value of the ARO liabilities, which was estimated by discounting expected cash outflows to their present value using market based rates at the initial recording of the liabilities. Cash outflows were based on the approximate future disposal costs as determined by market information, historical information or other management estimates. These inputs to the fair value of the ARO liabilities are considered Level 3 inputs under the fair value hierarchy.