Regulatory (Tables)

3 Months Ended

Mar. 31, 2016

Schedule of Regulatory Assets and Regulatory Liabilities

Details of the regulatory assets and liabilities as of Mar. 31, 2016 and Dec. 31, 2015 are presented in the following table:

Regulatory Assets and Liabilities
(millions)	Mar. 31, 2016		Dec. 31, 2015
Regulatory assets:
Regulatory tax asset ⁽¹⁾	$	77.1	$	74.7
Cost-recovery clauses - deferred balances⁽²⁾		0.1		5.5
Cost-recovery clauses - offsets to derivative liabilities ⁽²⁾		26.0		26.5
Environmental remediation ⁽³⁾		54.4		54.0
Postretirement benefits ⁽⁴⁾		238.5		240.6
Deferred bond refinancing costs ⁽⁵⁾		6.2		6.5
Debt basis adjustment ⁽⁶⁾		16.7		17.5
Competitive rate adjustment ⁽²⁾		2.5		2.6
Other		12.1		12.1
Total regulatory assets		433.6		440.0
Less: Current portion		40.2		44.8
Long-term regulatory assets	$	393.4	$	395.2
Regulatory liabilities:
Regulatory tax liability	$	7.6	$	7.9
Cost-recovery clauses⁽²⁾		80.0		55.9
Transmission and delivery storm reserve		56.1		56.1
Accumulated reserve - cost of removal ⁽⁷⁾		673.6		679.9
Other		0.5		0.8
Total regulatory liabilities		817.8		800.6
Less: Current portion		108.4		84.8
Long-term regulatory liabilities	$	709.4	$	715.8

(1)

The regulatory tax asset is primarily associated with the depreciation and recovery of AFUDC-equity. This asset does not earn a return but rather is included in capital structure, which is used in the calculation of the weighted cost of capital used to determine revenue requirements. It will be recovered over the expected life of the related assets.

(2)

These assets and liabilities are related to FPSC and NMPRC clauses and riders. They are recovered or refunded through cost-recovery mechanisms approved by the FPSC or NMPRC, as applicable, on a dollar-for-dollar basis in the next year. In the case of the regulatory asset related to derivative liabilities, recovery occurs in the year following the settlement of the derivative position.

(3)

This asset is related to costs associated with environmental remediation primarily at manufactured gas plant sites. The balance is included in rate base, partially offsetting the related liability, and earns a rate of return as permitted by the FPSC. The timing of recovery is impacted by the timing of the expenditures related to remediation.

(4)	This asset is related to the deferred costs of postretirement benefits. It is included in rate base and earns a rate of return as permitted by the FPSC or NMPRC, as applicable. It is amortized over the remaining service life of plan participants.

(5)

This asset represents the past costs associated with refinancing debt. It does not earn a return but rather is included in capital structure, which is used in the calculation of the weighted cost of capital used to determine revenue requirements. It will be amortized over the term of the related debt instruments.

(6)	This asset represents the difference between the fair value and pre-merger carrying amounts for NMGC’s long-term debt on the acquisition date. It does not earn a return and is not included in the regulatory capital structure. It is amortized over the term of the related debt instrument.

(7)	This item represents the non-ARO cost of removal in the accumulated reserve for depreciation.

Tampa Electric Company [Member]

Schedule of Regulatory Assets and Regulatory Liabilities

Details of the regulatory assets and liabilities as of Mar. 31, 2016 and Dec. 31, 2015 are presented in the following table:

Regulatory Assets and Liabilities
(millions)	Mar. 31, 2016		Dec. 31, 2015
Regulatory assets:
Regulatory tax asset ⁽¹⁾	$	77.0	$	74.6
Cost-recovery clauses - deferred balances ⁽²⁾		0.0		5.2
Cost-recovery clauses - offsets to derivative liabilities⁽²⁾		25.9		26.2
Environmental remediation⁽³⁾		54.4		54.0
Postretirement benefits ⁽⁴⁾		236.4		238.3
Deferred bond refinancing costs⁽⁵⁾		6.2		6.5
Competitive rate adjustment ⁽²⁾		2.5		2.6
Other		10.6		10.7
Total regulatory assets		413.0		418.1
Less: Current portion		39.9		44.3
Long-term regulatory assets	$	373.1	$	373.8
Regulatory liabilities:
Regulatory tax liability	$	5.6	$	5.7
Cost-recovery clauses ⁽²⁾		76.1		54.2
Transmission and delivery storm reserve		56.1		56.1
Accumulated reserve - cost of removal⁽⁶⁾		561.7		570.0
Other		0.5		0.7
Total regulatory liabilities		700.0		686.7
Less: Current portion		104.5		83.2
Long-term regulatory liabilities	$	595.5	$	603.5

(1)

(2)

These assets and liabilities are related to FPSC clauses and riders. They are recovered or refunded through cost-recovery mechanisms approved by the FPSC on a dollar-for-dollar basis in the next year. In the case of the regulatory asset related to derivative liabilities, recovery occurs in the year following the settlement of the derivative position.

(3)

(4)

This asset is related to the deferred costs of postretirement benefits. It is included in rate base and earns a rate of return as permitted by the FPSC. It is amortized over the remaining service life of plan participants.

(5)

(6)

This item represents the non-ARO cost of removal in the accumulated reserve for depreciation.