Rate and Other Regulatory Matters (Tables)

9 Months Ended

Sep. 30, 2020

Schedule of Regulatory Assets and Liabilities

	September 30,		December 31,
(millions)	2020		2019
Regulatory assets:
NND Project costs⁽¹⁾	$	138	$	138
Deferred employee benefit plan costs⁽²⁾		10		13
Other unrecovered plant⁽³⁾		14		14
DSM programs⁽⁴⁾		19		17
AROs⁽⁵⁾		27		28
Cost of fuel under-collections⁽⁶⁾		15		13
Other		41		48
Regulatory assets - current		264		271
NND Project costs⁽¹⁾		2,399		2,503
AROs⁽⁵⁾		290		293
Cost of reacquired debt⁽⁷⁾		246		259
Deferred employee benefit plan costs⁽²⁾		192		196
Deferred losses on interest rate derivatives⁽⁸⁾		312		305
Other unrecovered plant⁽³⁾		62		69
DSM programs⁽⁴⁾		55		54
Environmental remediation costs⁽⁹⁾		21		22
Deferred storm damage costs⁽¹⁰⁾		45		44
Deferred transmission operating costs⁽¹¹⁾		56		37
Other⁽¹²⁾		98		110
Regulatory assets - noncurrent		3,776		3,892
Total regulatory assets	$	4,040	$	4,163
Regulatory liabilities:
Monetization of guaranty settlement⁽¹³⁾	$	67	$	67
Income taxes refundable through future rates⁽¹⁴⁾		24		16
Reserve for refunds to electric utility customers⁽¹⁵⁾		133		143
Cost of fuel over-collections⁽⁶⁾		63		12
Other		4		18
Regulatory liabilities - current		291		256
Monetization of guaranty settlement⁽¹³⁾		920		970
Income taxes refundable through future rates⁽¹⁴⁾		917		948
Asset removal costs⁽¹⁶⁾		563		552
Deferred gains on interest rate derivatives⁽⁸⁾		70		71
Reserve for refunds to electric utility customers⁽¹⁵⁾		570		656
Other		11		13
Regulatory liabilities - noncurrent		3,051		3,210
Total regulatory liabilities	$	3,342	$	3,466

(1)	Reflects expenditures associated with the NND Project, which pursuant to the SCANA Merger Approval Order, will be recovered from electric service customers over a 20-year period ending in 2039. See Note 12 for more information.

(2)

Employee benefit plan costs have historically been recovered as they have been recorded under GAAP. Deferred employee benefit plan costs represent amounts of pension and other postretirement benefit costs which were accrued as liabilities and treated as regulatory assets pursuant to FERC guidance, and costs deferred pursuant to specific South Carolina Commission regulatory orders. DESC expects to recover deferred pension costs through utility rates over periods through 2044. DESC expects to recover other deferred benefit costs through utility rates, primarily over average service periods of participating employees up to 11 years.

(3)

Represents the carrying value of coal-fired generating units, including related materials and supplies inventory, retired from service prior to being fully depreciated. DESC is amortizing these amounts through cost of service rates over the units' previously estimated remaining useful lives through 2025. Unamortized amounts are included in rate base and are earning a current return.

(4)	Represents deferred costs associated with electric demand reduction programs, and such deferred costs are currently being recovered over three years through an approved rate rider.

(5)

Represents deferred depreciation and accretion expense related to legal obligations associated with the future retirement of generation, transmission and distribution properties. The AROs primarily relate to DESC’s electric generating facilities, including Summer, and are expected to be recovered over the related property lives and periods of decommissioning which may range up to approximately 105 years.

(6)	Represents amounts under- or over-collected from customers pursuant to the cost of fuel and purchased gas components approved by the South Carolina Commission.

(7)	Costs of the reacquisition of debt are deferred and amortized as interest expense over the would-be remaining life of the reacquired debt or over the life of the replacement debt if refinanced. The reacquired debt had a weighted-average life of approximately 26 years as of September 30, 2020.

(8)

Represents (i) the changes in fair value and payments made or received upon settlement of certain interest rate derivatives designated as cash flow hedges and (ii) the changes in fair value and payments made or received upon settlement of certain other interest rate derivatives not so designated. The amounts recorded with respect to (i) are expected to be amortized to interest expense over the lives of the underlying debt through 2043.The amounts recorded with respect to (ii) are expected to be similarly amortized to interest expense through 2065.

(9)	Reflects amounts associated with the assessment and clean-up of sites currently or formerly owned by DESC. Such remediation costs are expected to be recovered over periods of up to 16 years. See Note 12 for more information.

(10)	Represents storm restoration costs for which DESC expects to receive future recovery through customer rates.

(11)	Includes deferred depreciation and property taxes associated with certain transmission assets for which DESC expects recovery from customers through future rates. See Note 12 for more information.

(12)	Various other regulatory assets are expected to be recovered through rates over varying periods through 2047.

(13)

Represents proceeds related to the monetization of the Toshiba Settlement. In accordance with the SCANA Merger Approval Order, this balance, net of amounts that may be required to satisfy liens, will be refunded to electric customers over a 20-year period ending in 2039. See Note 12 for more information.

(14)

Includes (i) excess deferred income taxes arising from the remeasurement of deferred income taxes in connection with the enactment of the 2017 Tax Reform Act (certain of which are protected under normalization rules and will be amortized over the remaining lives of related property, and certain of which will be amortized to the benefit of customers over prescribed periods as instructed by regulators) and (ii) deferred income taxes arising from investment tax credits, offset by (iii) deferred income taxes that arise from utility operations that have not been included in customer rates (a portion of which relate to depreciation and are expected to be recovered over the remaining lives of the related property which may range up to 85 years). See Note 6 for more information.

(15)	Reflects amounts previously collected from retail electric customers of DESC for the NND Project to be credited to customers over an estimated 11-year period (effective February 2019) in connection with the SCANA Merger Approval Order. See Note 12 for more information.

(16)	Represents estimated net collections through depreciation rates of amounts to be expended for the removal of assets in the future.