Regulatory Matters and Accounting for Regulatory Activities

Regulatory Assets and Liabilities

Regulatory assets and liabilities represent probable future revenues or expenses associated with certain charges and credits that will be recovered from or refunded to customers through the ratemaking process. We included the amounts of our regulatory assets and liabilities within “Other current assets,” “Deferred charges and other assets,” “Accrued other current liabilities” and “Other long-term liabilities and deferred credits,” respectively, in our accompanying consolidated balance sheets. The recovery period for these regulatory assets is approximately one year to twenty-four years.

The following table summarizes our regulatory asset and liability balances (in millions):



	June 30, 2013		December 31, 2012
Current regulatory assets	$	34	$	18
Non-current regulatory assets	255		204
Total Regulatory Assets	$	289	$	222

Current regulatory liabilities	$	117	$	4
Non-current regulatory liabilities	328		65
Total Regulatory Liabilities(a)	$	445	$	69

(a)

During the three months ended June 30, 2013, we began applying regulatory accounting to another one of our pipeline systems due to a newly negotiated long-term tolling agreement approved by the system’s regulator that went into effect in April 2013. The primary impact of applying regulatory accounting, was the reclassification of approximately $362 million of current and long-term deferred credits to regulatory liabilities, of which $115 million remains classified as current. We expect this regulatory liability to be refunded to rate-payers over approximately the next four years.

More information about our regulatory matters can be found in Note 17 “Regulatory Matters” to our consolidated financial statements included in our 2012 Form 10-K