Allegheny Power 2010 Annual Report Download - page 78

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63
Regulatory assets on the Balance Sheets are comprised of the following:
Regulatory Assets FE OE CEI TE JCP&L Met-Ed Penelec
(In millions)
December 31, 2010
Regulatory transition costs $ 770 $ - $ - $ - $ 591 $ 131 $ 43
Customer shopping incentives - - - - - - -
Customer receivables for future income taxes 326 50 2 1 30 113 130
Loss (gain) on reacquired debt 48 17 1 (3) 21 6 6
Employee postretirement benefits 16 - 3 2 7 4 -
Nuclear decommissioning, decontamination
and spent fuel disposal costs (184) - - - (31) (92) (61)
A
sset removal costs (237) (24) (47) (19) (147) - -
MISO/PJM transmission costs 184 (1) - - - 131 52
Deferred generation costs 386 125 226 35 - - -
Distribution costs 426 216 155 55 - - -
Other 91 17 30 1 42 3 (7)
Total $ 1,826 $ 400 $ 370 $ 72 $ 513 $ 296 $ 163
December 31, 2009
Regulatory transition costs $ 1,100 $ 73 $ 8 $ 8 $ 965 $ 116 $ (70)
Customer shopping incentives 154 - 154 - - - -
Customer receivables for future income taxes 329 58 3 1 31 114 122
Loss (gain) on reacquired debt 51 18 1 (3) 22 8 5
Employee postretirement benefits 23 - 5 2 10 6 -
Nuclear decommissioning, decontamination
and spent fuel disposal costs (162) - - - (22) (83) (57)
A
sset removal costs (231) (23) (43) (17) (148) - -
MISO/PJM transmission costs 148 (15) (15) (3) - 187 (6)
Deferred generation costs 369 115 222 32 - - -
Distribution costs 482 230 197 55 - - -
Other 93 9 14 (5) 30 9 15
Total $ 2,356 $ 465 $ 546 $ 70 $ 888 $ 357 $ 9
Regulatory assets that do not earn a current return totaled approximately $215 million as of December 31, 2010 (JCP&L
- $38 million, Met-Ed - $131 million, Penelec - $12 million, OE - $18 million and, CEI - $16 million). Regulatory assets of
JCP&L, Met-Ed and Penelec not earning a current return are primarily for certain regulatory transition costs and
employee postretirement benefits and will be recovered by 2014 for JCP&L and by 2020 for Met-Ed and Penelec.
Regulatory assets of OE and CEI not earning a current return primarily relate to the deferral of certain purchased power
costs for which the means of recovery as not yet been established by the PUCO.
Transition Cost Amortization
JCP&L’s and Met-Ed’s regulatory transition costs include the deferral of above-market costs for power supplied from
NUGs of $164 million for JCP&L (recovered through NGC revenues) and $128 million for Met-Ed (recovered through
CTC revenues). Projected above-market NUG costs are adjusted to fair value at the end of each quarter, with a
corresponding offset to regulatory assets. Recovery of the remaining regulatory transition costs is expected to continue
pursuant to various regulatory proceedings in New Jersey and Pennsylvania (see Note 10).
(B) REVENUES AND RECEIVABLES
The Utilities' principal business is providing electric service to customers in Ohio, Pennsylvania and New Jersey. The
Utilities' retail customers are metered on a cycle basis. Electric revenues are recorded based on energy delivered
through the end of the calendar month. An estimate of unbilled revenues is calculated to recognize electric service
provided from the last meter reading through the end of the month. This estimate includes many factors, among which
are historical customer usage, load profiles, estimated weather impacts, customer shopping activity and prices in effect
for each class of customer. In each accounting period, the Utilities accrue the estimated unbilled amount receivable as
revenue and reverse the related prior period estimate.