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, 2017 and 2016 are:



(Thousands of Dollars)	See Note(s)	Remaining Amortization Period	Dec. 31, 2017				Dec. 31, 2016
Regulatory Assets			Current		Noncurrent		Current		Noncurrent
Pension and retiree medical obligations ^(a)	7	Various	$	12,752	$	223,038	$	13,986	$	234,171
Excess deferred taxes - TCJA	6	Various	—		44,685		—		—
Net AROs ^(b)	11	Plant lives	—		24,201		—		24,352
Recoverable deferred taxes on AFUDC recorded in plant^(c)	1	Plant lives	—		23,888		—		44,258
Losses on reacquired debt	4	Term of related debt	807		22,664		127		1,617
Renewable resources and environmental initiatives	11	One to three years	1,600		1,301		3,580		2,900
Conservation programs ^(d)	1	One to two years	2,674		733		3,754		2,431
Other		Various	13,705		22,433		17,274		36,954
Total regulatory assets			$	31,538	$	362,943	$	38,721	$	346,683


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


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


^(c)	Includes a write-down of $23.2 million as a result of the revaluation of deferred tax gross up at the new federal tax rate at Dec. 31, 2017.


^(d)	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, 2017 and 2016 are:



(Thousands of Dollars)	See Note(s)	Remaining Amortization Period	Dec. 31, 2017				Dec. 31, 2016
Regulatory Liabilities			Current		Noncurrent		Current		Noncurrent
Excess deferred taxes - TCJA ^(a)	6	Various	$	—	$	563,662	$	—	$	—
Plant removal costs	11	Plant lives	—		196,875		—		208,638
Revenue subject to refund	10	One to two years	6,825		6,503		5,093		3,602
Gain from asset sales	10	Various	—		2,476		—		2,530
Deferred electric energy costs	1	Less than one year	48,460		—		32,451		—
Contract valuation adjustments ^(b)	1, 9	Term of related contract	12,723		—		1,955		—
Other		Various	827		15,048		2,078		18,684
Total regulatory liabilities			$	68,835	$	784,564	$	41,577	$	233,454


^(a)	Primarily relates to the revaluation of recoverable/regulated plant ADIT and $28.0 million revaluation impact of non-plant ADIT at Dec. 31, 2017.


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

At Dec. 31, 2017 and 2016, approximately $64 million and $65 million of SPS’ regulatory assets represented past expenditures not currently earning a return, respectively. This amount primarily includes formula rates, loss on reacquired debt and certain expenditures associated rate cases.