Assets and Liabilities
Regulatory assets and liabilities represent probable future revenues or expenses associated with certain charges and credits that will be recovered from or refunded to customers through the ratemaking process. We included the amounts of our regulatory assets and liabilities within “Other current assets,” “Deferred charges and other assets,” “Other current liabilities” and “Other long-term liabilities and deferred credits,” respectively, in our accompanying consolidated balance sheets. As of December 31, 2013, the recovery period for these regulatory assets was approximately one year to twenty-five years.
The following table summarizes our regulatory asset and liability balances as of December 31, 2013 and 2012 (in millions):
|
| | | | | | | |
| December 31,
2013 | | December 31,
2012 |
Current regulatory assets | $ | 66 |
| | $ | 18 |
|
Non-current regulatory assets | 325 |
| | 253 |
|
Total regulatory assets(a) | $ | 391 |
| | $ | 271 |
|
| | | |
Current regulatory liabilities | $ | 123 |
| | $ | 4 |
|
Non-current regulatory liabilities | 332 |
| | 66 |
|
Total regulatory liabilities(b) | $ | 455 |
| | $ | 70 |
|
__________
| |
(a) | Includes an $88 million increase since December 31, 2012 (net of related amortization of $5 million) associated with TGP’s sale of certain natural gas facilities located offshore in the Gulf of Mexico and onshore in the state of Louisiana. |
| |
(b) | During the second quarter of 2013, we began applying regulatory accounting to the Trans Mountain pipeline systems due to a newly negotiated long-term tolling agreement approved by the system’s regulator that went into effect in April 2013. The primary impact of applying regulatory accounting was the reclassification of approximately $362 million of current and long-term deferred credits to regulatory liabilities. We expect this regulatory liability to be refunded to rate-payers over approximately the next four years. As of December 31, 2013, $113 million remains classified as a current regulatory liability. |
On July 26, 2012, TGP filed an application with the FERC seeking authority to abandon by sale certain natural gas facilities located offshore in the Gulf of Mexico and onshore in the state of Louisiana, as well as a related offer of settlement that addressed the proposed rate and accounting treatment associated with the sale. The offer of settlement provided for a rate adjustment to TGP’s maximum tariff rates upon the transfer of the assets and established a regulatory asset for a portion of the unrecovered net book value of the facilities to be sold. Effective September 1, 2013, following the FERC’s approval of both the requested abandonment authorization and the offer of settlement, TGP sold these assets, and in 2013, TGP recognized both a $93 million increase in regulatory assets and a $36 million gain from the sale of assets.
