Regulatory Assets and Liabilities

12 Months Ended

Dec. 31, 2018

The Company has recorded regulatory assets and liabilities (in millions) that it expects to pass through to its customers in accordance with, and subject to, regulatory provisions as follows:



December 31,	2018		2017		Recovery/Refund Period
REGULATORY ASSETS
Current regulatory assets:
El Salvador energy pass through costs recovery	$	87	$	59	Quarterly
Other	69		60		Various
Total current regulatory assets	156		119
Noncurrent regulatory assets:
IPL and DPL defined benefit pension obligations ⁽¹⁾	283		298		Various
IPL deferred Midwest ISO costs	88		102		8 years
IPL environmental costs	89		48		Various
Other	87		94		Various
Total noncurrent regulatory assets	547		542
TOTAL REGULATORY ASSETS	$	703	$	661
REGULATORY LIABILITIES
Current regulatory liabilities:
Overcollection of costs to be passed back to customers	$	83	$	14	1 year
Other	3		3		Various
Total current regulatory liabilities	86		17
Noncurrent regulatory liabilities:
IPL and DPL accrued costs of removal and ARO's	847		830		Over life of assets
IPL and DPL income taxes payable to customers through rates	246		243		Various
Other	53		6		Various
Total noncurrent regulatory liabilities	1,146		1,079
TOTAL REGULATORY LIABILITIES	$	1,232	$	1,096

_____________________________


⁽¹⁾	Past expenditures on which the Company earns a rate of return.

Our regulatory assets primarily consist of costs that are generally non-controllable, such as purchased electricity, energy transmission, the difference between actual fuel costs and the fuel costs recovered in the tariffs, and other sector costs. These costs are recoverable or refundable as defined by the laws and regulations in our markets. Our regulatory assets also include defined pension and postretirement benefit obligations equal to the previously unrecognized actuarial gains and losses and prior services costs that are expected to be recovered through future rates. Other current and noncurrent regulatory assets primarily consist of:


•	Demand charges at DPL;


•	Unamortized premiums reacquired or redeemed on long-term debt at IPL and DPL, which are amortized over the lives of the original issuances; and


•	Costs to comply with environmental regulations.

Our regulatory liabilities primarily consist of obligations for removal costs which do not have an associated legal retirement obligation. Our regulatory liabilities also include deferred income taxes associated with the reduction of the U.S. federal income tax rate which will be passed through to our regulated customers via a decrease in future retail rates, see Note 21—Income Taxes for further information.

In the accompanying Consolidated Balance Sheets the current regulatory assets and liabilities are reflected in Other current assets and Accrued and other liabilities, respectively, and the noncurrent regulatory assets and liabilities are reflected in Other noncurrent assets and Other noncurrent liabilities, respectively. The regulatory assets and liabilities primarily related to the US and Utilities SBU as of December 31, 2018 and December 31, 2017.