Vectren 2013 Annual Report Download - page 85

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83
4. Regulatory Assets & Liabilities
Regulatory Assets
Regulatory assets consist of the following:
At December 31,
(In millions) 2013 2012
Future amounts recoverable from ratepayers related to:
Benefit obligations (See Note 11) $ 57.1 $ 126.2
Net deferred income taxes (See Note 10) (5.8) (3.9)
Asset retirement obligations & other 2.4 2.6
53.7 124.9
Amounts deferred for future recovery related to:
Deferred coal costs (See Note 18) 42.4 42.4
Cost recovery riders & other 18.6 10.2
61.0 52.6
Amounts currently recovered in customer rates related to:
Unamortized debt issue costs & hedging proceeds 34.6 32.6
Demand side management programs 2.5 4.4
Indiana authorized trackers 30.8 32.1
Ohio authorized trackers 7.9 1.5
Premiums paid to reacquire debt 2.2 2.7
Other base rate recoveries 0.7 1.9
78.7 75.2
Total regulatory assets $ 193.4 $ 252.7
Of the $78.7 million currently being recovered in customer rates, $2.5 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 $40 million, is 23 years. The remainder of the regulatory assets are being recovered timely through periodic
recovery 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 decrease in 2013 of approximately $69 million is a result of plan asset performance and an increase
in discount rate used to value the projected benefit obligation. 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, 2013 and 2012, the Company has approximately $387.3 million and $364.2 million, respectively, in Regulatory
liabilities. Of these amounts, $373.0 million and $349.5 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, LLC
On March 31, 2011, the Company, through its wholly owned subsidiary Vectren Infrastructure Services Company, Inc.,
purchased Minnesota Limited, LLC, 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.