Allegheny Power 2014 Annual Report Download - page 41

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26
Other operating expenses decreased $353 million primarily due to:
• decreased energy efficiency program expenses of $40 million resulting from the completion of certain initiatives
in Ohio and Pennsylvania, which are recoverable through rates;
• lower distribution operating and maintenance expenses of $363 million due to lower storm related maintenance
activities during 2013 compared to 2012. Maintenance costs in 2012 related to Hurricane Sandy and the "derecho"
wind storm totaled $386 million, of which $370 million was deferred for future recovery;
• higher transmission expenses of $50 million primarily due to PJM transmission costs associated with RMR units.
• Pension and OPEB mark-to-market charges decreased $541 million, reflecting a higher discount rate to measure related
obligations in 2013.
• Depreciation expense increased by $48 million due to a higher asset base.
• Net regulatory asset amortization increased $594 million primarily due to the absence of deferred storm restoration
expenses associated with Hurricane Sandy and the "derecho" wind storm ($370 million), regulatory asset charges
associated with the recovery of marginal transmission losses at ME and PN ($254 million), recovery of RECs for the Ohio
Companies ($51 million), and the asset transfer between MP and AE Supply ($23 million) as well as higher default generation
service cost recovery in Pennsylvania, partially offset by a reduction of NUG cost recovery at ME and PN and higher
transmission cost deferrals in Ohio.
• General taxes decreased by $9 million primarily due to lower gross receipts and payroll taxes, partially offset by higher
property taxes.
• Impairment of long-lived assets of $322 million reflects MP's charge to reduce the net book value of Harrison to the amount
permitted to be included in rate base.
Other Expense —
Other expense increased $24 million in 2013 primarily due to lower investment income resulting from the liquidation of investments
at Shippingport and lower NDT investment income.
Regulated Transmission — 2013 Compared with 2012
Net income decreased $12 million in 2013 compared to 2012 principally due to higher operating expenses, such as depreciation
and property taxes, associated with higher capital expenditures.
Revenues —
Total revenues decreased by $4 million principally due to lower PJM network service revenues for the Utilities, reflecting lower peak
loads from the prior year.
Revenues by transmission asset owner are shown in the following table:
For the Years Ended
December 31,
Revenues by Transmission Asset Owner 2013 2012 Increase
(Decrease)
(In millions)
ATSI $ 209 $ 208 $ 1
TrAIL 207 200 7
PATH 20 18 2
Utilities 295 309 (14)
Total Revenues $ 731 $ 735 $ (4)
Operating Expenses —
Total operating expenses increased $16 million principally due to higher depreciation and property taxes reflecting a higher asset
base and higher amortization of the PATH abandonment regulatory asset.