Rate Regulated Basis of Accounting We account for our regulated segment in accordance with applicable regulatory guidance. The economic effects of regulation can result in a regulated company recovering costs from customers in a period different from the period in which the costs would be charged to expense by an unregulated enterprise. When this results, costs are deferred as assets on the Consolidated Balance Sheets (“regulatory assets”) and recorded as expenses when such amounts are reflected in rates. Additionally, regulators can impose liabilities upon a regulated company for amounts previously collected from customers and for current collection in rates of costs that are expected to be incurred in the future (“regulatory liabilities”). The amounts recorded as regulatory assets and regulatory liabilities are as follows:
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| | | | | |
($000) | 2013 | | 2012 |
|
| |
|
Regulatory assets |
| |
|
Current assets |
| |
|
Deferred gas costs | 3,923 |
| | 3,386 |
|
|
| |
|
Other assets |
| |
|
Conservation/efficiency program expenses | 198 |
| | 236 |
|
Loss on extinguishment of debt | 3,389 |
| | 3,636 |
|
Asset retirement obligations | 3,788 |
| | 3,001 |
|
Accrued pension | 6,369 |
| | 9,537 |
|
Regulatory case expenses | 26 |
| | 108 |
|
Total other assets | 13,770 |
| | 16,518 |
|
Total regulatory assets | 17,693 |
| | 19,904 |
|
|
| |
|
Regulatory liabilities |
| |
|
Long-term liabilities |
| |
|
Accrued cost of removal on long-lived assets | 328 |
| | 338 |
|
Regulatory liability for deferred income taxes | 925 |
| | 1,043 |
|
Total regulatory liabilities | 1,253 |
| | 1,381 |
|
All of our regulatory assets and liabilities have been approved for recovery by the Kentucky Public Service Commission and are currently being recovered or refunded through our regulated gas rates. In addition, the unrecovered balance of the loss on extinguishment of debt is included in rate base and, therefore, earns a return. The weighted average recovery period of regulatory assets not earning a return is 21 years.
