Regulatory Assets and Liabilities

12 Months Ended

Dec. 31, 2023

Regulatory Assets and Liabilities Disclosure [Abstract]

Regulatory Assets and Liabilities

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, 2023				Dec. 31, 2022 (a)
Regulatory Assets			Current		Noncurrent		Current		Noncurrent
Pension and retiree medical obligations	9	Various	$	2	$	147	$	2	$	146
Net AROs (b)	1, 10	Various	—		59		—		48
Excess deferred taxes — TCJA	7	Various	1		47		1		48
Recoverable deferred taxes on AFUDC		Plant lives	—		44		—		40
Losses on reacquired debt		Term of related debt	1		18		1		19
Deferred electric energy/fuel costs		N/A	—		—		136		34
Other		Various	26		34		77		24
Total regulatory assets			$	30	$	349	$	217	$	359

(a)Prior period amounts have been restated to conform with current year presentation.

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

Components of regulatory liabilities:

(Millions of Dollars)	See Note(s)	Remaining Amortization Period	Dec. 31, 2023				Dec. 31, 2022 (a)
Regulatory Liabilities			Current		Noncurrent		Current		Noncurrent
Deferred income tax adjustments and TCJA refunds (b)	7	Various	$	—	$	458	$	—	$	469
Plant removal costs	1, 10	Various	—		223		—		198
LP&L departure payment		Up to 10 years	33		33		—		—
Effects of regulation on employee benefit costs		Various	—		19		—		20
Formula rates		One to two years	13		10		10		8
Renewable resources and environmental initiatives		Various	—		8		—		14
Contract valuation adjustments (c)	1, 8	Less than one year	41		—		119		1
Deferred electric energy costs		Less than one year	15		—		—		—
Other		Various	14		10		19		5
Total regulatory liabilities			$	116	$	761	$	148	$	715

(a)Prior period amounts have been reclassified to conform with current year presentation.

(b)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.

(c)Includes the fair value of FTR instruments utilized/intended to offset the impacts of transmission system congestion.

SPS’ regulatory assets not earning a return include past expenditures of $123 million and $48 million at Dec. 31, 2023 and 2022, respectively, which predominately relate to losses on reacquired debt, rate case expenses, and transmission-related deferrals and amortizations. Additionally, the unfunded portion of pension and retiree medical obligations and net AROs (i.e. deferrals for which cash has not been disbursed) do not earn a return.