Xcel Energy 2015 Annual Report Download - page 160
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Calculations and data used by the regulator in approving company rates are useful in assessing future cash flows. The regulatory basis
information is a means to reconcile amounts previously provided to the MPUC and utilized for regulatory purposes to amounts used
for financial reporting. The following table provides a reconciliation of the discounted decommissioning cost obligation - regulated
basis to the ARO recorded in accordance with GAAP:
(Thousands of Dollars) 2015 2014
Discounted decommissioning cost obligation - regulated basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,314,102 $ 3,536,818
Differences in discount rate and market risk premium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,275,438) (1,275,101)
Operating and maintenance costs not included for GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (897,640) (547,135)
Differences in cost studies (2011 versus 2014, no change in 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 323,365
Nuclear production decommissioning ARO - GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,141,024 $ 2,037,947
Decommissioning expenses recognized as a result of regulation for the years ending Dec. 31 were:
(Thousands of Dollars) 2015 2014 2013
Annual decommissioning recorded as depreciation expense: (a) . . . . . . . . . . . . . . . . . . $ 6,862 $ 7,138 $ 6,402
(a) Decommissioning expense does not include depreciation of the capitalized nuclear asset retirement costs.
The 2014 nuclear decommissioning filing approved in 2015 has been used for the regulatory presentation.
15. Regulatory Assets and Liabilities
Xcel Energy Inc. and subsidiaries prepare their consolidated financial statements in accordance with the applicable accounting
guidance, as discussed in Note 1. Under this guidance, regulatory assets and liabilities are created for amounts that regulators may
allow to be collected, or may require to be paid back to customers in future electric and natural gas rates. Any portion of Xcel
Energy’s business that is not regulated cannot establish regulatory assets and liabilities. If changes in the utility industry or the
business of Xcel Energy no longer allow for the application of regulatory accounting guidance under GAAP, Xcel Energy would be
required to recognize the write-off of regulatory assets and liabilities in net income or OCI.
The components of regulatory assets shown on the consolidated balance sheets at Dec. 31, 2015 and 2014 are:
(Thousands of Dollars) See Note(s) Remaining
Amortization Period Dec. 31, 2015 Dec. 31, 2014
Regulatory Assets Current Noncurrent Current Noncurrent
Pension and retiree medical obligations (a) . . . . . . . . . . . . 9 Various $ 90,249 $ 1,368,115 $ 95,054 $ 1,402,360
Recoverable deferred taxes on AFUDC recorded in plant 1 Plant lives — 408,994 — 395,329
Net AROs (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 13, 14 Plant lives — 306,671 — 189,056
Environmental remediation costs . . . . . . . . . . . . . . . . . . . 1, 13 Various 6,702 166,883 4,594 149,812
Contract valuation adjustments (c). . . . . . . . . . . . . . . . . . . 1, 11 Term of related contract 26,379 128,780 17,730 144,273
Depreciation differences. . . . . . . . . . . . . . . . . . . . . . . . . . 1 One to sixteen years 14,221 99,835 10,700 104,743
Purchased power contract costs . . . . . . . . . . . . . . . . . . . . 13 Term of related contract 1,587 70,411 858 69,908
PI EPU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Nineteen years 2,967 65,060 8,743 67,379
Conservation programs (d) . . . . . . . . . . . . . . . . . . . . . . . . . 1 One to five years 31,793 50,047 61,866 58,174
Nuclear refueling outage costs . . . . . . . . . . . . . . . . . . . . . 1 One to two years 67,545 28,913 62,499 19,745
State commission adjustments . . . . . . . . . . . . . . . . . . . . . 1 Plant lives 988 26,708 571 26,092
Losses on reacquired debt. . . . . . . . . . . . . . . . . . . . . . . . . 4 Term of related debt 5,008 26,268 5,258 31,276
Renewable resources and environmental initiatives. . . . . 13 One to two years 33,014 23,565 24,891 29,902
Property tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . One to six years 21,757 14,428 28,024 31,429
Gas pipeline inspection and remediation costs. . . . . . . . . 12 One to four years 6,858 13,662 9,981 21,869
Recoverable purchased natural gas and electric energy
costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 One to two years 11,783 12,762 68,841 4,745
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Various 23,779 47,639 44,448 28,124
Total regulatory assets . . . . . . . . . . . . . . . . . . . . . . . . . . $ 344,630 $ 2,858,741 $ 444,058 $ 2,774,216
(a) Includes $257.5 million and $282.4 million for the regulatory recognition of the NSP-Minnesota pension expense of which $21.3 million and $23.8 million is
included in the current asset at Dec. 31, 2015 and 2014, respectively. Also included are $12.5 million and $26.1 million of regulatory assets related to the
nonqualified pension plan of which $4.0 million and $2.5 million is included in the current asset at Dec. 31, 2015 and 2014, respectively.
(b) Includes amounts recorded for future recovery of AROs, less amounts recovered through nuclear decommissioning accruals and gains from decommissioning
investments.
(c) Includes the fair value of certain long-term PPAs used to meet energy capacity requirements and valuation adjustments on natural gas commodity purchases.
(d) Includes costs for conservation programs, as well as incentives allowed in certain jurisdictions.