
12.	Regulatory Assets and Liabilities

SPS’ financial statements are prepared in accordance with the applicable accounting guidance, as discussed in Note 1. Under this guidance, regulatory assets and liabilities are created for amounts that regulators may allow to be collected, or may require to be paid back to customers in future electric rates. If changes in the utility industry or the business of SPS no longer allow for the application of regulatory accounting guidance under GAAP, SPS would be required to recognize the write-off of regulatory assets and liabilities in net income or OCI.

The components of regulatory assets shown on the balance sheets of SPS at Dec. 31, 2016 and 2015 are:



(Thousands of Dollars)	See Note(s)	Remaining Amortization Period	Dec. 31, 2016				Dec. 31, 2015
Regulatory Assets			Current		Noncurrent		Current		Noncurrent
Pension and retiree medical obligations ^(a)	7	Various	$	13,986	$	234,171	$	15,632	$	223,122
Recoverable deferred taxes on AFUDC recorded in plant	1	Plant lives	—		44,258		—		39,368
Net AROs ^(b)	11	Plant lives	—		24,352		—		23,014
Renewable resources and environmental initiatives	11	One to four years	3,580		2,900		3,740		2,019
Conservation programs ^(c)	1	One to three years	3,754		2,431		5,137		3,859
Losses on reacquired debt	4	Term of related debt	127		1,617		850		1,743
Other		Various	17,274		36,954		6,182		8,689
Total regulatory assets			$	38,721	$	346,683	$	31,541	$	301,814


^(a)	Includes the non-qualified pension plan.


^(b)	Includes amounts recorded for future recovery of AROs.


^(c)	Includes costs for conservation programs, as well as incentives allowed in certain jurisdictions.

The components of regulatory liabilities shown on the balance sheets of SPS at Dec. 31, 2016 and 2015 are:



(Thousands of Dollars)	See Note(s)	Remaining Amortization Period	Dec. 31, 2016				Dec. 31, 2015
Regulatory Liabilities			Current		Noncurrent		Current		Noncurrent
Plant removal costs	11	Plant lives	$	—	$	208,638	$	—	$	203,954
Revenue subject to refund	10	One to two years	5,093		3,602		20,647		1,080
Gain from asset sales	10	Various	—		2,530		2,640		2,584
Deferred electric energy costs	1	Less than one year	32,451		—		61,041		—
Contract valuation adjustments ^(a)	1, 9	Term of related contract	1,955		—		9,387		—
Renewable resources and environmental initiatives	11	One to two years	1,075		—		2,960		880
Other		Various	1,003		18,684		1,630		21,086
Total regulatory liabilities ^(b)			$	41,577	$	233,454	$	98,305	$	229,584


^(a)	Includes the fair value of certain long-term PPAs used to meet energy capacity requirements.

^(b)Revenue subject to refund of $0 million and $3.9 million for 2016 and 2015, respectively, is included in other current liabilities.

At Dec. 31, 2016 and 2015, approximately $65 million and $25 million of SPS’ regulatory assets represented past expenditures not currently earning a return, respectively. This amount primarily includes certain expenditures associated with renewable resources and environmental initiatives.