DTE Energy 2008 Annual Report Download - page 17

The following are the balances of the regulatory assets and liabilities as of December 31:
As noted below, regulatory assets for which costs have been incurred have been included (or are expected to be included, for costs incurred
subsequent to the most recently approved rate case) in MichCon’s rate base, thereby providing a return on invested costs. Certain regulatory
assets do not result from cash expenditures and therefore do not represent investments included in rate base or have offsetting liabilities that
reduce rate base.
ASSETS
15
(in Millions) 2008 2007
Assets
Deferred environmental costs $41 $39
Unamortized loss on reacquired debt 33 29
Recoverable pension and postretirement costs
Pension 373 25
Postretirement costs
178 91
Accrued GCR revenue 1 —
Recoverable uncollectibles expense 122 66
Deferred income taxes — Michigan Business Tax 58 47
806 297
Less amount included in current assets (32)(25)
$774 $272
Liabilities
Asset removal costs $353 $363
Refundable income taxes 93 104
Accrued GCR refund
— 70
Negative pension offse
t
110 71
Deferred income taxes — Michigan Business Tax 53 47
609 655
Less amount included in current liabilities and other liabilities — (70)
$609 $585
•
D
eferred environmental costs — The MPSC approved the deferral and recovery of investigation and remediation costs associated with
former MGP sites. This asset is offset in working capital by an environmental liability reserve. The amortization of the regulatory asset is
not included in our current rates because it is offset by the recognition of insurance proceeds. We will request recovery of the remaining
asset balance in future rate filings after the recognition of insurance proceeds is complete. (1)
• Unamortized loss on reacquired debt — The unamortized discount, premium and expense related to debt redeemed with a refinancing are
deferred, amortized and recovered over the life of the replacement issue.
•
R
ecoverable pension and postretirement costs — In 2007, the Company adopted SFAS No. 158 which required, among other things, the
recognition in other comprehensive income of the actuarial gains or losses and the prior service costs that arise during the period but that are
not immediately recognized as components of net periodic benefit costs. The Company received approval from the MPSC to record the
charge related to the additional liability as a regulatory asset since the traditional rate setting process allows for the recovery of pension and
postretirement costs. The asset will reverse as the deferred items are recognized as benefit expenses in net income. (1)
•
A
ccrued GCR revenue — Receivable for the temporary under-recovery of and return on gas costs incurred by MichCon which are
recoverable through the GCR mechanism.
•
R
ecoverable uncollectibles expense — Receivable for the MPSC approved uncollectible expense true-up mechanism that tracks the
difference in the fluctuation in uncollectible accounts and amounts recognized pursuant to the MPSC authorization.
•
D
eferred income taxes — Michigan Business Tax (MBT) - In July 2007, the MBT was enacted by the State of Michigan. State deferred tax
liabilities were established for the utility, and offsetting regulatory assets were recorded as the impacts of the deferred tax liabilities will be
reflected in rates as the related taxable temporary differences reverse and flow through current income tax expense. (1)
(1) Regulatory assets not earning a return.