Regulatory Matters

Regulatory assets represent costs that are expected to be recovered in future regulated rates. MidAmerican Energy's regulatory assets reflected on the Consolidated Balance Sheets consist of the following as of December 31 (in millions):



	Average
	Remaining Life	2012		2011

Deferred income taxes, net⁽¹⁾	21 years	$	640	$	569
Employee benefit plans⁽²⁾	11 years	121		101
Unrealized loss on regulated derivative contracts	1 year	50		94
Other	Various	65		67
Total		$	876	$	831


(1)	Amounts primarily represent income tax benefits related to state accelerated tax depreciation and certain property-related basis differences that were previously flowed through to customers and will be included in regulated rates when the temporary differences reverse.


(2)	Represents amounts not yet recognized as a component of net periodic benefit cost that are expected to be included in regulated rates when recognized.

MidAmerican Energy had regulatory assets not earning a return on investment of $871 million and $826 million as of December 31, 2012 and 2011, respectively.

Regulatory liabilities represent income to be recognized or amounts to be returned to customers in future periods. MidAmerican Energy's regulatory liabilities reflected on the Consolidated Balance Sheets consist of the following as of December 31 (in millions):



	Average
	Remaining Life	2012		2011

Cost of removal accrual⁽¹⁾	21 years	$	629	$	603
Asset retirement obligations⁽²⁾	25 years	94		76
Unrealized gain on regulated derivative contracts	1 year	5		21
Other	Various	22		19
Total		$	750	$	719


(1)	Amounts represent estimated costs, as accrued through depreciation rates and exclusive of ARO liabilities, of removing utility plant in accordance with accepted regulatory practices. Amounts are deducted from rate base or otherwise accrue a carrying cost.


(2)	Amount predominately represents the excess of nuclear decommission trust assets over the related asset retirement obligation. Refer to Note 12 for a discussion of asset retirement obligations.