Vectren 2012 Annual Report Download - page 83

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81
4. Regulatory Assets & Liabilities
Regulatory Assets
Regulatory assets consist of the following:
At December 31,
(In millions) 2012 2011
Future amounts recoverable from ratepayers related to:
Benefit obligations (See Note 11) $ 126.2 $ 126.0
Deferred income taxes (See Note 10) (3.9) 1.3
Asset retirement obligations & other 2.6 2.3
124.9 129.6
Amounts deferred for future recovery related to:
Deferred coal costs (See Note 18) 42.4 17.7
Cost recovery riders & other 10.2 6.4
52.6 24.1
Amounts currently recovered in customer rates related to:
Unamortized debt issue costs & hedging proceeds 32.6 34.3
Demand side management programs 4.4 6.3
Indiana authorized trackers 32.1 24.3
Ohio authorized trackers 1.5 1.0
Premiums paid to reacquire debt 2.7 3.3
Other base rate recoveries 1.9 3.1
75.2 72.3
Total regulatory assets $ 252.7 $ 226.0
Of the $75.2 million currently being recovered in customer rates, $4.4 million that is associated with demand side management
programs is earning a return. The weighted average recovery period of regulatory assets currently being recovered in base
rates, which totals $41.6 million, is 18 years. The remainder of the regulatory assets are being recovered timely through
tracking mechanisms. The Company has rate orders for all deferred costs not yet in rates and therefore believes that future
recovery is probable.
Assets arising from benefit obligations represent the funded status of retirement plans less amounts previously recognized in the
statement of income. The Company records a Regulatory asset for that portion related to its rate regulated utilities. If the cost is
ultimately recognized as a periodic cost, it will be recovered through rates charged to customers. See Note 11.
Regulatory Liabilities
At December 31, 2012 and 2011, the Company has approximately $364.2 million and $345.2 million, respectively, in Regulatory
liabilities. Of these amounts, $349.5 million and $320.9 million relate to cost of removal obligations. The remaining amounts
primarily relate to timing differences associated with asset retirement obligations and deferred financing costs.
5. Acquisition of Minnesota Limited, Inc.
On March 31, 2011, the Company, through its wholly owned subsidiary Vectren Infrastructure Services Company, Inc.,
purchased Minnesota Limited, Inc., excluding certain assets. Minnesota Limited is a specialty contractor focusing on
transmission pipeline construction and maintenance; pump station, compressor station, terminal and refinery construction; and
hydrostatic testing. Minnesota Limited is headquartered in Big Lake, Minnesota and the majority of its customers are generally
located in the northern Midwest region.