Regulatory Assets and Liabilities

12 Months Ended

Dec. 31, 2021

Regulatory Assets and Liabilities Disclosure [Abstract]

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. SPS would be required to recognize the write-off of regulatory assets and liabilities in net income or other comprehensive income if changes in the utility industry no longer allow for the application of regulatory accounting guidance under GAAP.

Components of regulatory assets:


(Millions of Dollars)	See Note(s)	Remaining Amortization Period	Dec. 31, 2021				Dec. 31, 2020
Regulatory Assets			Current		Noncurrent		Current		Noncurrent
Pension and retiree medical obligations	9	Various	$	11	$	135	$	12	$	178
Texas revenue surcharges		One to two years	20		64		54		17
Excess deferred taxes — TCJA	7	Various	2		50		3		51
Recoverable deferred taxes on AFUDC		Plant lives	—		41		—		42
Net AROs (a)	1, 10	Various	—		40		—		33
Losses on reacquired debt		Term of related debt	1		19		1		20
Conservation programs (b)	1	One to two years	3		2		1		2
Deferred natural gas and electric energy/fuel costs		One to three years	146		4		—		—
Other		Various	10		25		5		14
Total regulatory assets			$	193	$	380	$	76	$	357

(a)Includes amounts recorded for future recovery of AROs.

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

Components of regulatory liabilities:


(Millions of Dollars)	See Note(s)	Remaining Amortization Period	Dec. 31, 2021				Dec. 31, 2020
Regulatory Liabilities			Current		Noncurrent		Current		Noncurrent
Deferred income tax adjustments and TCJA refunds (a)	7	Various	$	15	$	486	$	6	$	513
Plant removal costs	1, 10	Various	—		190		—		177
Revenue subject to refund		One to two years	6		4		4		4
Gain from asset sales		Various	—		2		—		2
Deferred natural gas and electric energy/fuel costs		Less than one year	—		—		35		—
Contract valuation adjustments (b)	1, 8	One to three years	27		1		7		—
Other		Various	6		26		5		22
Total regulatory liabilities			$	54	$	709	$	57	$	718

(a)Includes the revaluation of recoverable/regulated plant accumulated deferred income taxes and revaluation impact of non-plant accumulated deferred income taxes due to the TCJA.

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

At Dec. 31, 2021 and 2020, SPS’ regulatory assets not earning a return primarily included the unfunded portion of pension and retiree medical obligations and net AROs. In addition, SPS’ regulatory assets included $292 million and $114 million at Dec. 31, 2021 and 2020, respectively, of past expenditures not earning a return. Amounts are related to the Texas deferred fuel balance, losses on reacquired debt and certain rate case expenditures.