PG&E 2013 Annual Report Download - page 69

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 3: REGULATORY ASSETS, LIABILITIES, AND BALANCING ACCOUNTS
Regulatory Assets
Long-term regulatory assets are composed of the following:
Balance at
December 31, Recovery
2013 2012 Period
(in millions)
Pension benefits(1) .......................... $ 1,444 $ 3,275 N/A(4)
Deferred income taxes(1) ..................... 1,835 1,627 1 - 45 years
Utility retained generation(2) .................. 503 552 11 years
Environmental compliance costs(1) .............. 628 604 32 years
Price risk management(1) ..................... 106 210 9 years
Electromechanical meters(3) ................... 135 194 4 years
Unamortized loss, net of gain, on reacquired debt(1) . 135 141 13 years
Other ................................... 127 206 Various
Total long-term regulatory assets ............... $ 4,913 $ 6,809
(1) Represents the cumulative differences between amounts recognized for ratemaking purposes and amounts recognized in
accordance with GAAP and also includes amounts that otherwise would be recorded to accumulated other comprehensive loss in
the Consolidated Balance Sheets. (See Note 11 below.)
(2) In connection with the settlement agreement entered into among PG&E Corporation, the Utility, and the CPUC in 2003 to
resolve the Utility’s proceeding under Chapter 11, the CPUC authorized the Utility to recover $1.2 billion of costs related to the
Utility’s retained generation assets. The individual components of these regulatory assets are being amortized over the respective
lives of the underlying generation facilities, consistent with the period over which the related revenues are recognized.
(3) Represents the expected future recovery of the net book value of electromechanical meters that were replaced with SmartMeter↩
devices.
(4) The Utility expects to continuously recover pension benefits.
In general, the Utility does not earn a return on regulatory assets if the related costs do not accrue interest.
Accordingly, the Utility earns a return only on its regulatory assets for retained generation, regulatory assets for
electromechanical meters, and regulatory assets for unamortized loss, net of gain, on reacquired debt.
Regulatory Liabilities
Long-term regulatory liabilities are composed of the following:
Balance at
December 31,
2013 2012
(in millions)
Cost of removal obligations(1) ............................. $ 3,844 $ 3,625
Recoveries in excess of AROs(2) ........................... 748 620
Public purpose programs(3) ............................... 587 590
Other .............................................. 481 253
Total long-term regulatory liabilities ........................ $ 5,660 $ 5,088
(1) Represents the cumulative differences between asset removal costs recorded and amounts collected in rates for expected asset
removal costs.
(2) Represents the cumulative differences between ARO expenses and amounts collected in rates primarily for the decommissioning
of the Utility’s nuclear generation facilities. Decommissioning costs recovered through rates are primarily placed in nuclear
decommissioning trusts. This regulatory liability also represents the deferral of realized and unrealized gains and losses on the
nuclear decommissioning trust investments. (See Note 10 below.)
(3) Represents amounts received from customers designated for public purpose program costs expected to be incurred beyond the
next 12 months, primarily related to energy efficiency programs.
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