Regulatory Assets and Liabilities

12 Months Ended

Dec. 31, 2020

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,	2020		2019		Recovery/Refund Period
Regulatory assets
Current regulatory assets:
El Salvador energy pass through costs recovery	$	40	$	56	Quarterly
Other	73		57		1 year
Total current regulatory assets	113		113
Noncurrent regulatory assets:
IPL and DPL defined benefit pension obligations (1)	244		262		Various

IPL environmental costs	81		85		Various
IPL Petersburg Unit 1 retirement costs	75		—		Over life of assets
IPL deferred Midwest ISO costs	61		75		6 years
Other	126		108		Various
Total noncurrent regulatory assets	587		530
Total regulatory assets	$	700	$	643
Regulatory liabilities
Current regulatory liabilities:
Overcollection of costs to be passed back to customers	$	47	$	80	1 year

Other	1		1		Various
Total current regulatory liabilities	48		81
Noncurrent regulatory liabilities:
IPL and DPL accrued costs of removal and AROs	863		863		Over life of assets
IPL and DPL income taxes payable to customers through rates	174		209		Various
Other	21		18		Various
Total noncurrent regulatory liabilities	1,058		1,090
Total regulatory liabilities	$	1,106	$	1,171

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

Our regulatory assets and current regulatory liabilities primarily consist of under or overcollection of costs that are generally non-controllable, such as purchased electricity, energy transmission, fuel costs, 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 service costs that are expected to be recovered through future rates. Additionally, our regulatory assets include the expected carrying value of IPL's Petersburg Unit 1 at its anticipated retirement date, which will be amortized over the life of the asset beginning on the date of retirement. Other current and noncurrent regulatory assets primarily consist of:

•Undercollections on rate riders such as wholesale margin sharing and MISO costs at IPL and energy efficiency and storm costs 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

•OVEC costs at DPL.

Our noncurrent regulatory liabilities primarily consist of obligations for removal costs which do not have an associated legal retirement obligation. Our noncurrent regulatory liabilities also include deferred income taxes related to differences in income recognition between tax laws and accounting methods, which will be passed through to our regulated customers via a decrease in future retail rates.

In the accompanying Consolidated Balance Sheets, current regulatory assets and liabilities are reflected in Other current assets and Accrued and other liabilities, respectively, and noncurrent regulatory assets and liabilities are reflected in Other noncurrent assets and Other noncurrent liabilities, respectively. All of the regulatory assets and liabilities as of December 31, 2020 and December 31, 2019 are related to the US and Utilities SBU.