XML 163 R16.htm IDEA: XBRL DOCUMENT v3.19.3.a.u2
Regulatory Matters (Notes)
12 Months Ended
Dec. 31, 2019
Schedule Of Regulatory Assets and Liabilities [Line Items]  
Regulatory Matters [Text Block]
Regulatory Matters

Regulatory Assets

Regulatory assets represent costs that are expected to be recovered in future regulated rates. The Company's regulatory assets reflected on the Consolidated Balance Sheets consist of the following as of December 31 (in millions):
 
Weighted
 
 
 
 
 
Average
 
 
 
 
 
Remaining Life
 
2019
 
2018
 
 
 
 
 
 
Employee benefit plans(1)
15 years
 
$
667

 
$
773

Asset retirement obligations
Various
 
445

 
375

Asset disposition costs
Various
 
391

 
358

Deferred income taxes(2)
Various
 
223

 
196

Deferred operating costs
11 years
 
134

 
141

Deferred net power costs
2 years
 
110

 
103

Unrealized loss on regulated derivative contracts
3 years
 
78

 
120

Unamortized contract values
4 years
 
60

 
79

Abandoned projects
3 years
 
58

 
134

Other
Various
 
715

 
788

Total regulatory assets
 
 
$
2,881

 
$
3,067

 
 
 
 
 
 
Reflected as:
 
 
 
 
 
Current assets
 
 
$
115

 
$
171

Noncurrent assets
 
 
2,766

 
2,896

Total regulatory assets
 
 
$
2,881

 
$
3,067


(1)
Represents amounts not yet recognized as a component of net periodic benefit cost that are expected to be included in regulated rates when recognized.
(2)
Amounts primarily represent income tax benefits related to certain property-related basis differences and other various differences that were previously passed on to customers and will be included in regulated rates when the temporary differences reverse.

The Company had regulatory assets not earning a return on investment of $1.4 billion and $1.3 billion as of December 31, 2019 and 2018, respectively.

Regulatory Liabilities

Regulatory liabilities represent income to be recognized or amounts to be returned to customers in future periods. The Company's regulatory liabilities reflected on the Consolidated Balance Sheets consist of the following as of December 31 (in millions):
 
Weighted
 
 
 
 
 
Average
 
 
 
 
 
Remaining Life
 
2019
 
2018
 
 
 
 
 
 
Deferred income taxes(1)
Various
 
$
3,611

 
$
3,923

Cost of removal(2)
27 years
 
2,370

 
2,426

Levelized depreciation
29 years
 
304

 
329

Asset retirement obligations
33 years
 
241

 
163

Impact fees
2 years
 
72

 
88

Other
Various
 
713

 
577

Total regulatory liabilities
 
 
$
7,311

 
$
7,506

 
 
 
 
 
 
Reflected as:
 
 
 
 
 
Current liabilities
 
 
$
211

 
$
160

Noncurrent liabilities
 
 
7,100

 
7,346

Total regulatory liabilities
 
 
$
7,311

 
$
7,506


(1)
Amounts primarily represent income tax liabilities related to the federal tax rate change from 35% to 21% that are probable to be passed on to customers, offset by income tax benefits related to certain property-related basis differences and other various differences that were previously passed on to customers and will be included in regulated rates when the temporary differences reverse. See Note 12 for further discussion of 2017 Tax Reform impacts.
(2)
Amounts represent estimated costs, as accrued through depreciation rates and exclusive of ARO liabilities, of removing regulated property, plant and equipment in accordance with accepted regulatory practices. Amounts are deducted from rate base or otherwise accrue a carrying cost.
PacifiCorp [Member]  
Schedule Of Regulatory Assets and Liabilities [Line Items]  
Regulatory Matters [Text Block]
Regulatory Matters

Regulatory Assets

Regulatory assets represent costs that are expected to be recovered in future rates. PacifiCorp's regulatory assets reflected on the Consolidated Balance Sheets consist of the following as of December 31 (in millions):
 
Weighted
 
 
 
 
 
Average
 
 
 
 
 
Remaining
 
 
 
 
 
Life
 
2019
 
2018
 
 
 
 
 
 
Employee benefit plans(1)
19 years
 
$
422

 
$
448

Utah mine disposition(2)
Various
 
125

 
136

Unamortized contract values
4 years
 
60

 
79

Deferred net power costs
2 years
 
106

 
62

Unrealized loss on derivative contracts
3 years
 
62

 
96

Asset retirement obligation
28 years
 
140

 
119

Other
Various
 
208

 
172

Total regulatory assets
 
 
$
1,123

 
$
1,112

 
 
 
 
 
 
Reflected as:
 
 
 
 
 
Current assets
 
 
$
63

 
$
36

Noncurrent assets
 
 
1,060

 
1,076

Total regulatory assets
 
 
$
1,123

 
$
1,112



(1)
Represents amounts not yet recognized as a component of net periodic benefit cost that are expected to be included in rates when recognized.

(2)
Amounts represent regulatory assets established as a result of the Utah mine disposition in 2015 for the net property, plant and equipment not considered probable of disallowance and for the portion of losses associated with the assets held for sale, UMWA 1974 Pension Plan withdrawal and closure costs incurred to date considered probable of recovery.

PacifiCorp had regulatory assets not earning a return on investment of $609 million and $636 million as of December 31, 2019 and 2018, respectively.

Regulatory Liabilities

Regulatory liabilities represent income to be recognized or amounts to be returned to customers in future periods. PacifiCorp's regulatory liabilities reflected on the Consolidated Balance Sheets consist of the following as of December 31 (in millions):
 
Weighted
 
 
 
 
 
Average
 
 
 
 
 
Remaining
 
 
 
 
 
Life
 
2019
 
2018
 
 
 
 
 
 
Cost of removal(1)
26 years
 
$
1,019

 
$
994

Deferred income taxes(2)
Various
 
1,653

 
1,803

Other
Various
 
297

 
258

Total regulatory liabilities
 
 
$
2,969

 
$
3,055

 
 
 
 
 
 
Reflected as:
 
 
 
 
 
Current liabilities
 
 
$
56

 
$
77

Noncurrent liabilities
 
 
2,913

 
2,978

Total regulatory liabilities
 
 
$
2,969

 
$
3,055


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

(2)
Amounts primarily represent income tax liabilities related to the federal tax rate change from 35% to 21% that are probable of being passed on to customers, offset by income tax benefits related to certain property-related basis differences and other various differences that were previously passed on to customers and will be included in regulated rates when the temporary differences reverse.
MidAmerican Energy Company [Member]  
Schedule Of Regulatory Assets and Liabilities [Line Items]  
Regulatory Matters [Text Block]
Regulatory Matters

Regulatory Assets

Regulatory assets represent costs that are expected to be recovered in future regulated rates. MidAmerican Energy's regulatory assets reflected on the Balance Sheets consist of the following as of December 31 (in millions):
 
Average
 
 
 
 
 
Remaining Life
 
2019
 
2018
 
 
 
 
 
 
Asset retirement obligations(1)
6 years
 
$
223

 
$
160

Employee benefit plans(2)
12 years
 
26

 
62

Unrealized loss on regulated derivative contracts
1 year
 
7

 
19

Other
Various
 
33

 
32

Total
 
 
$
289

 
$
273


(1)
Amount predominantly relates to asset retirement obligations for fossil-fueled and wind-powered generating facilities. Refer to Note 11 for a discussion of asset retirement obligations.
(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 $286 million and $269 million as of December 31, 2019 and 2018, respectively.

Regulatory Liabilities

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 Balance Sheets consist of the following as of December 31 (in millions):
 
Average
 
 
 
 
 
Remaining Life
 
2019
 
2018
 
 
 
 
 
 
Cost of removal accrual(1)
29 years
 
$
572

 
$
708

Deferred income taxes(2)
Various
 
478

 
626

Asset retirement obligations(3)
33 years
 
241

 
160

Employee benefit plans(4)
10 years
 
32

 

Pre-funded AFUDC on transmission MVPs(5)
53 years
 
35

 
36

Iowa electric revenue sharing accrual(6)
1 year
 
22

 
70

Other
Various
 
26

 
20

Total
 
 
$
1,406

 
$
1,620

(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)
Amounts primarily represent income tax liabilities primarily related to the federal tax rate change from 35% to 21% that are probable to be passed on to customers, offset by income tax benefits related to state accelerated tax depreciation and certain property-related basis differences that were previously passed on to customers and will be included in regulated rates when the temporary differences reverse.
(3)
Amount represents the excess of nuclear decommission trust assets over the related asset retirement obligation. Refer to Note 11 for a discussion of asset retirement obligations.
(4)
Represents amounts not yet recognized as a component of net periodic benefit cost that are to be returned to customers in future periods when recognized.
(5)
Represents AFUDC accrued on transmission MVPs that is deducted from rate base as a result of the inclusion of related construction work-in-progress in rate base.
(6)
Represents current-year accruals under a regulatory arrangement in Iowa in which equity returns exceeding specified thresholds reduce utility plant upon final determination.
MidAmerican Funding, LLC and Subsidiaries [Domain]  
Schedule Of Regulatory Assets and Liabilities [Line Items]  
Regulatory Matters [Text Block]
Regulatory Matters

Refer to Note 5 of MidAmerican Energy's Notes to Financial Statements.
Nevada Power Company [Member]  
Schedule Of Regulatory Assets and Liabilities [Line Items]  
Regulatory Matters [Text Block]
Regulatory Matters

Regulatory Assets

Regulatory assets represent costs that are expected to be recovered in future rates. Nevada Power's regulatory assets reflected on the Consolidated Balance Sheets consist of the following as of December 31 (in millions):
 
Weighted
 
 
 
 
 
Average
 
 
 
 
 
Remaining Life
 
2019
 
2018
 
 
 
 
 
 
Decommissioning costs(2)
3 years
 
$
241

 
$
222

Deferred operating costs
9 years
 
136

 
152

Merger costs from 1999 merger
25 years
 
120

 
125

Employee benefit plans(1)
8 years
 
87

 
105

Asset retirement obligations
6 years
 
67

 
68

Legacy meters
13 years
 
49

 
53

ON Line deferrals
34 years
 
45

 
46

Abandoned projects
1 year
 
12

 
46

Deferred energy costs
1 year
 

 
47

Other
Various
 
44

 
53

Total regulatory assets
 
 
$
801

 
$
917

 
 
 
 
 
 
Reflected as:
 
 
 
 
 
Current assets
 
 
$
1

 
$
39

Noncurrent assets
 
 
800

 
878

Total regulatory assets
 
 
$
801

 
$
917


(1)
Represents amounts not yet recognized as a component of net periodic benefit cost that are expected to be included in regulated rates when recognized.

(2)
Amount includes regulatory assets with an indeterminate life of $104 million and $81 million as of December 31, 2019 and 2018, respectively.

Nevada Power had regulatory assets not earning a return on investment of $303 million and $334 million as of December 31, 2019 and 2018, respectively. The regulatory assets not earning a return on investment primarily consist of merger costs from the 1999 merger, asset retirement obligations, deferred operating costs, a portion of the employee benefit plans, losses on reacquired debt and deferred energy costs.

Regulatory Liabilities

Regulatory liabilities represent amounts that are expected to be returned to customers in future periods. Nevada Power's regulatory liabilities reflected on the Consolidated Balance Sheets consist of the following as of December 31 (in millions):
 
Weighted
 
 
 
 
 
Average
 
 
 
 
 
Remaining Life
 
2019
 
2018
 
 
 
 
 
 
Deferred income taxes(1)
Various
 
$
681

 
$
677

Cost of removal(2)
33 years
 
332

 
320

Impact fees(3)
2 years
 
72

 
86

Other
Various
 
171

 
103

Total regulatory liabilities
 
 
$
1,256

 
$
1,186

 
 
 
 
 
 
Reflected as:
 
 
 
 
 
Current liabilities
 
 
$
93

 
$
49

Noncurrent liabilities
 
 
1,163

 
1,137

Total regulatory liabilities
 
 
$
1,256

 
$
1,186


(1)
Amounts primarily represent income tax liabilities related to the federal tax rate change from 35% to 21% that are probable to be passed on to customers, offset by income tax benefits related to accelerated tax depreciation and certain property-related basis differences that were previously passed on to customers and will be included in regulated rates when the temporary differences reverse.

(2)
Amounts represent estimated costs, as accrued through depreciation rates and exclusive of ARO liabilities, of removing regulated property, plant and equipment in accordance with accepted regulatory practices.

(3)
Amounts reduce rate base or otherwise accrue a carrying cost.

Deferred Energy

Nevada statutes permit regulated utilities to adopt deferred energy accounting procedures. The intent of these procedures is to ease the effect on customers of fluctuations in the cost of purchased natural gas, fuel and electricity and are subject to annual prudency review by the PUCN. Under deferred energy accounting, to the extent actual fuel and purchased power costs exceed fuel and purchased power costs recoverable through current rates that excess is not recorded as a current expense on the Consolidated Statements of Operations but rather is deferred and recorded as a regulatory asset on the Consolidated Balance Sheets and would be included in the table above as deferred energy costs. Conversely, a regulatory liability is recorded to the extent fuel and purchased power costs recoverable through current rates exceed actual fuel and purchased power costs and is included in the table above as deferred energy costs. These excess amounts are reflected in quarterly adjustments to rates and recorded as cost of fuel, energy and capacity in future time periods.

2017 Tax Reform

In February 2018, Nevada Power made filings with the PUCN proposing a tax rate reduction rider for the lower annual income tax expense anticipated to result from 2017 Tax Reform for 2018 and beyond. In March 2018, the PUCN issued an order approving the rate reduction proposed by Nevada Power. The new rates were effective April 1, 2018. The order extended the procedural schedule to allow parties additional discovery relevant to 2017 Tax Reform and a hearing was held in July 2018. In September 2018, the PUCN issued an order directing Nevada Power to record the amortization of any excess protected accumulated deferred income tax arising from the 2017 Tax Reform as a regulatory liability effective January 1, 2018. Subsequently, Nevada Power filed a petition for reconsideration relating to the amortization of protected excess accumulated deferred income tax balances resulting from the 2017 Tax Reform. In November 2018, the PUCN issued an order granting reconsideration and reaffirming the September 2018 order. In December 2018, Nevada Power filed a petition for judicial review. In January 2019, intervening parties filed statements of intent to participate in the petition for judicial review. Nevada Power has filed opening briefs and the intervening parties have filed answering briefs. The hearing occurred in January 2020 and a ruling is expected in the first half of 2020.

Energy Efficiency Program Rates ("EEPR") and Energy Efficiency Implementation Rates ("EEIR")

EEPR was established to allow Nevada Power to recover the costs of implementing energy efficiency programs and EEIR was established to offset the negative impacts on revenue associated with the successful implementation of energy efficiency programs. These rates change once a year in the utility's annual DEAA application based on energy efficiency program budgets prepared by Nevada Power and approved by the PUCN in integrated resource plan proceedings. When Nevada Power's regulatory earned rate of return for a calendar year exceeds the regulatory rate of return used to set base tariff general rates, it is obligated to refund energy efficiency implementation revenue previously collected for that year. In March 2019, Nevada Power filed an application to reset the EEIR and EEPR and to refund the EEIR revenue received in 2018, including carrying charges. In August 2019, the PUCN issued an order accepting a stipulation requiring Nevada Power to refund the 2018 revenue and reset the rates as filed effective October 1, 2019. The EEIR liability for Nevada Power is $8 million and $9 million, which is included in current regulatory liabilities on the Consolidated Balance Sheets as of December 31, 2019 and 2018, respectively.

Emissions Reduction and Capacity Retirement Plan ("ERCR Plan")

In November 2019, the Navajo coal-fueled generating facility was retired. Nevada Power owned 11% of the facility and its net owned capacity was 255 MWs. The decommissioning was approved by the PUCN in May 2014 as a part of the filed ERCR Plan. The remaining net book value of $12 million was moved from property, plant and equipment, net to noncurrent regulatory assets on the Consolidated Balance Sheet in November 2019, in compliance with the ERCR Plan. Refer to Note 13 for additional information on the ERCR Plan.
Sierra Pacific Power Company [Member]  
Schedule Of Regulatory Assets and Liabilities [Line Items]  
Regulatory Matters [Text Block]
Regulatory Matters

Regulatory Assets

Regulatory assets represent costs that are expected to be recovered in future rates. Sierra Pacific's regulatory assets reflected on the Balance Sheets consist of the following as of December 31 (in millions):
 
Weighted
 
 
 
 
 
Average
 
 
 
 
 
Remaining Life
 
2019
 
2018
 
 
 
 
 
 
Employee benefit plans(1)
8 years
 
$
107

 
$
132

Merger costs from 1999 merger
27 years
 
71

 
74

Abandoned projects
7 years
 
24

 
29

Deferred Operating Costs
12 years
 
23

 
15

Losses on reacquired debt
15 years
 
17

 
19

Other
Various
 
53

 
52

Total regulatory assets
 
 
$
295

 
$
321

 
 
 
 
 
 
Reflected as:
 
 
 
 
 
Current assets
 
 
$
12

 
$
7

Noncurrent assets
 
 
283

 
314

Total regulatory assets
 
 
$
295

 
$
321


(1)
Represents amounts not yet recognized as a component of net periodic benefit cost that are expected to be included in regulated rates when recognized.

Sierra Pacific had regulatory assets not earning a return on investment of $168 million and $190 million as of December 31, 2019 and 2018, respectively. The regulatory assets not earning a return on investment primarily consist of merger costs from the 1999 merger, a portion of the employee benefit plans, losses on reacquired debt, asset retirement obligations and legacy meters.

Regulatory Liabilities

Regulatory liabilities represent amounts that are expected to be returned to customers in future periods. Sierra Pacific's regulatory liabilities reflected on the Balance Sheets consist of the following as of December 31 (in millions):
 
Weighted
 
 
 
 
 
Average
 
 
 
 
 
Remaining Life
 
2019
 
2018
 
 
 
 
 
 
Deferred income taxes(1)
Various
 
$
263

 
$
270

Cost of removal(2)
38 years
 
217

 
210

Other
Various
 
58

 
29

Total regulatory liabilities
 
 
$
538

 
$
509

 
 
 
 
 
 
Reflected as:
 
 
 
 
 
Current liabilities
 
 
$
49

 
$
18

Noncurrent liabilities
 
 
489

 
491

Total regulatory liabilities
 
 
$
538

 
$
509


(1)
Amounts primarily represent income tax liabilities related to the federal tax rate change from 35% to 21% that are probable to be passed on to customers, offset by income tax benefits related to accelerated tax depreciation and certain property-related basis differences and other various differences that were previously passed on to customers and will be included in regulated rates when the temporary differences reverse.
(2)
Amounts represent estimated costs, as accrued through depreciation rates and exclusive of ARO liabilities, of removing regulated property, plant and equipment in accordance with accepted regulatory practices.

Deferred Energy

Nevada statutes permit regulated utilities to adopt deferred energy accounting procedures. The intent of these procedures is to ease the effect on customers of fluctuations in the cost of purchased natural gas, fuel and electricity and are subject to annual prudency review by the PUCN. Under deferred energy accounting, to the extent actual fuel and purchased power costs exceed fuel and purchased power costs recoverable through current rates that excess is not recorded as a current expense on the Statements of Operations but rather is deferred and recorded as a regulatory asset on the Balance Sheets and would be included in the table above as deferred energy costs. Conversely, a regulatory liability is recorded to the extent fuel and purchased power costs recoverable through current rates exceed actual fuel and purchased power costs and is included in the table above as deferred energy costs. These excess amounts are reflected in quarterly adjustments to rates and recorded as cost of fuel, energy and capacity in future time periods.

Regulatory Rate Review

In June 2019, Sierra Pacific filed an electric regulatory rate review with the PUCN. The filing supported an annual revenue increase of $5 million but requested an annual revenue reduction of $5 million. In September 2019, Sierra Pacific filed an all-party settlement for the electric regulatory rate review. The settlement resolves all cost of capital and revenue requirement issues and provides for an annual revenue reduction of $5 million and requires Sierra Pacific to share 50% of regulatory earnings above 9.7% with its customers. The rate design portion of the regulatory rate review was not a part of the settlement and a hearing on rate design was held in November 2019. In December 2019, the PUCN issued an order approving the stipulation but made some adjustments to the methodology for the weather normalization component of historical sales in rates, which resulted in an annual revenue reduction of $3 million. The new rates were effective January 1, 2020. In January 2020, Sierra Pacific filed a petition for rehearing challenging the PUCN's adjustments to the weather normalization methodology. In February 2020, the PUCN issued an order granting the petition for rehearing.

2017 Tax Reform

In February 2018, Sierra Pacific made filings with the PUCN proposing a tax rate reduction rider for the lower annual income tax expense anticipated to result from 2017 Tax Reform for 2018 and beyond. In March 2018, the PUCN issued an order approving the rate reduction proposed by Sierra Pacific. The new rates were effective April 1, 2018. The order extended the procedural schedule to allow parties additional discovery relevant to 2017 Tax Reform and a hearing was held in July 2018. In September 2018, the PUCN issued an order directing Sierra Pacific to record the amortization of any excess protected accumulated deferred income tax arising from the 2017 Tax Reform as a regulatory liability effective January 1, 2018. Subsequently, Sierra Pacific filed a petition for reconsideration relating to the amortization of protected excess accumulated deferred income tax balances resulting from the 2017 Tax Reform. In November 2018, the PUCN issued an order granting reconsideration and reaffirming the September 2018 order. In December 2018, Sierra Pacific filed a petition for judicial review. In January 2019, intervening parties filed statements of intent to participate in the petition for judicial review. Sierra Pacific has filed opening briefs and the intervening parties have filed answering briefs. The hearing occurred in January 2020 and a ruling is expected in the first half of 2020.

Energy Efficiency Program Rates ("EEPR") and Energy Efficiency Implementation Rates ("EEIR")

EEPR was established to allow Sierra Pacific to recover the costs of implementing energy efficiency programs and EEIR was established to offset the negative impacts on revenue associated with the successful implementation of energy efficiency programs. These rates change once a year in the utility's annual DEAA application based on energy efficiency program budgets prepared by Sierra Pacific. When Sierra Pacific's regulatory earned rate of return for a calendar year exceeds the regulatory rate of return used to set base tariff general rates, it is obligated to refund energy efficiency implementation revenue previously collected for that year. In March 2019, Sierra Pacific filed an application to reset the EEIR and EEPR and to refund the EEIR revenue received in 2018, including carrying charges. In August 2019, the PUCN issued an order accepting a stipulation to reset the rates as filed effective October 1, 2019. The EEIR liability for Sierra Pacific is $2 million and $2 million, which is included in current regulatory liabilities on the Balance Sheets as of December 31, 2019 and 2018, respectively.