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Regulatory Assets And Liabilities | 12 Months Ended
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Dec. 31, 2020
Regulatory Assets And Liabilities [Line Items] |
Regulatory Assets and Liabilities | Regulatory Assets and Liabilities PSE&G prepares its financial statements in accordance with GAAP for regulated utilities as described in Note 1. Organization, Basis of Presentation and Summary of Significant Accounting Policies. PSE&G has deferred certain costs based on rate orders issued by the BPU or FERC or based on PSE&G’s experience with prior rate proceedings. Most of PSE&G’s Regulatory Assets and Liabilities as of December 31, 2020 are supported by written orders, either explicitly or implicitly through the BPU’s treatment of various cost items. These costs will be recovered and amortized over various future periods. Regulatory Assets and other investments and costs incurred under our various infrastructure filings and clause mechanisms are subject to prudence reviews and can be disallowed in the future by regulatory authorities. To the extent that collection of any infrastructure or clause mechanism revenue, Regulatory Assets or payments of Regulatory Liabilities is no longer probable, the amounts would be charged or credited to income. PSE&G had the following Regulatory Assets and Liabilities:
|  |  | As of December 31, |
|  |  | 2020 |  | 2019 |
|  |  | Millions |
| Regulatory Assets |  |  |  |  |
| Current |  |  |  |  |
| New Jersey Clean Energy Program |  | $ | 143 |  |  | $ | 143 |  |
| Societal Benefits Charge (SBC) |  | 82 |  |  | 30 |  |
| Electric Energy Costs—Basic Generation Service (BGS) |  | 60 |  |  | 57 |  |
| 2018 Distribution Base Rate Case Regulatory Assets (BRC) |  | 56 |  |  | 56 |  |
| Formula Rate True-up |  | 23 |  |  | 52 |  |
| Other |  | 5 |  |  | 13 |  |
| Total Current Regulatory Assets |  | 369 |  |  | 351 |  |
| Noncurrent |  |  |  |  |
| Pension and OPEB Costs |  | $ | 1,489 |  |  | $ | 1,284 |  |
| Deferred Income Tax Regulatory Assets |  | 1,014 |  |  | 966 |  |
| Manufactured Gas Plant (MGP) Remediation Costs |  | 320 |  |  | 357 |  |
| Electric Transmission and Gas Cost of Removal |  | 189 |  |  | 216 |  |
| Asset Retirement Obligation |  | 184 |  |  | 172 |  |
| Green Program Recovery Charges (GPRC) |  | 139 |  |  | 118 |  |
| Remediation Adjustment Charge (RAC) (Other SBC) |  | 134 |  |  | 158 |  |
| BRC |  | 103 |  |  | 159 |  |
| Deferred Storm Costs |  | 99 |  |  | 12 |  |
| COVID-19 Deferral |  | 51 |  |  | — |  |
| Unamortized Loss on Reacquired Debt and Debt Expense |  | 36 |  |  | 42 |  |
| Gas Costs—BGSS |  | 26 |  |  | 27 |  |
| Other |  | 88 |  |  | 166 |  |
| Total Noncurrent Regulatory Assets |  | 3,872 |  |  | 3,677 |  |
| Total Regulatory Assets |  | $ | 4,241 |  |  | $ | 4,028 |  |
|  |  | As of December 31, |
|  |  | 2020 |  | 2019 |
|  |  | Millions |
| Regulatory Liabilities |  |  |  |  |
| Current |  |  |  |  |
| Deferred Income Tax Regulatory Liabilities |  | $ | 223 |  |  | $ | 193 |  |
| Gas Costs—BGSS |  | 20 |  |  | — |  |
| ZEC Liability |  | 17 |  |  | 10 |  |
| Tax Adjustment Credit (TAC) |  | 5 |  |  | 12 |  |
| Weather Normalization Charge (WNC) |  | 2 |  |  | 15 |  |
| Other |  | 27 |  |  | 4 |  |
| Total Current Regulatory Liabilities |  | 294 |  |  | 234 |  |
| Noncurrent |  |  |  |  |
| Deferred Income Tax Regulatory Liabilities |  | $ | 2,670 |  |  | $ | 2,955 |  |
| Electric Distribution Cost of Removal |  | 37 |  |  | 47 |  |
| Total Noncurrent Regulatory Liabilities |  | 2,707 |  |  | 3,002 |  |
| Total Regulatory Liabilities |  | $ | 3,001 |  |  | $ | 3,236 |  |
All Regulatory Assets and Liabilities are excluded from PSE&G’s rate base unless otherwise noted. The Regulatory Assets and Liabilities in the table above are defined as follows: •Asset Retirement Obligation: These costs represent the differences between rate-regulated cost of removal accounting and asset retirement accounting under GAAP. These costs will be recovered in future rates as assets are retired. •BRC: Represents deferred costs, primarily comprised of storm costs incurred in the cleanup of major storms from 2010 through 2018, which are being amortized over five years pursuant to the 2018 Distribution Base Rate Case Settlement. •COVID-19 Deferral: These amounts represent incremental costs related to COVID-19 as authorized for deferral in an order issued by the BPU to all New Jersey regulated utilities in July 2020. The BPU authorized such utilities to create a COVID-19-related Regulatory Asset by deferring on their books and records the prudently incurred incremental costs related to COVID-19 during the Regulatory Asset period, beginning on March 9, 2020 through September 30, 2021, or 60 days after the New Jersey governor determines that the Public Health Emergency is no longer in effect, or in the absence of such a determination, 60 days from the time the Public Health Emergency automatically terminates by law, whichever is later. Deferred costs are to be offset by any federal or state assistance that the utility may receive as a direct result of the COVID-19 pandemic. Utilities must file quarterly reports of the costs incurred and offsets. Each participating utility must file a petition documenting its prudently incurred incremental COVID-19 costs by December 31, 2021, or within 60 days of the close of the Regulatory Asset period as described above, whichever is later. Any potential rate recovery, including any prudency determinations and the appropriate period of recovery, will be addressed through that filing, or in the alternative, the utility may request that the BPU defer consideration of rate recovery for a future base rate case. •Deferred Income Tax Regulatory Assets: These amounts relate to deferred income taxes arising from utility operations that have not been included in customer rates relating to depreciation, ITCs and other flow-through items, including the flowback to customers of accumulated deferred income taxes related to tax repair deductions. As part of its base rate case settlement with the BPU and the establishment of the TAC mechanism in 2018, PSE&G agreed to a ten-year flowback to customers of its accumulated deferred income taxes from previously realized tax repair deductions which resulted in the recognition of a $581 million Regulatory Asset and Regulatory Liability as of September 30, 2018. In addition, PSE&G agreed to the current flowback of tax benefits from ongoing tax repair deductions as realized which results in the recording of a Regulatory Asset upon flowback. For the years ended December 31, 2020 and 2019, PSE&G had provided $31 million and $58 million, respectively, in current tax repair flowbacks to customers. The recovery and amortization of the tax repair-related Deferred Income Tax Regulatory Assets will be determined in PSE&G’s subsequent base rate cases. •Deferred Income Tax Regulatory Liabilities: These liabilities relate to amounts due to customers for excess deferred income taxes as a result of the reduction in the federal corporate income tax rate provided in the Tax Cuts and Jobs Act of 2017 (Tax Act), and accumulated deferred income taxes from previously realized distribution-related tax repair deductions. As part of its settlement with its regulators, PSE&G agreed to refund the excess deferred income taxes as follows: •Unprotected distribution-related excess deferred income taxes are being refunded to customers over five years through PSE&G’s TAC mechanism as approved in its 2018 distribution base rate proceeding. As of December 31, 2020, the balance remaining to be flowed back to customers was approximately $520 million with the remaining flowback period through 2023. •Protected distribution-related excess deferred income taxes are being refunded to customers over the remaining useful life of distribution property, plant and equipment through PSE&G’s TAC mechanism. As of December 31, 2020, the balance remaining to be flowed back to customers was approximately $933 million. •Previously realized distribution-related tax repair deductions are being refunded to customers over ten years through PSE&G’s TAC mechanism. As of December 31, 2020, the balance remaining to be flowed back to customers was approximately $500 million through 2028. •Protected transmission-related excess deferred income taxes are being refunded to customers over the remaining useful life of transmission property, plant and equipment through PSE&G’s transmission formula rate mechanism. As of December 31, 2020, the balance remaining to be flowed back to customers was approximately $940 million. •Unprotected transmission-related deferred income taxes were fully refunded to customers in 2019 and 2020. •Deferred Storm Costs: Incremental costs incurred in the restoration and related costs from major storms in 2019 and 2020 for which PSE&G will seek recovery in its next base rate proceeding. •Electric and Gas Cost of Removal: PSE&G accrues and collects in rates for the cost of removing, dismantling and disposing of its T&D assets upon retirement. The Regulatory Asset or Liability for non-legally required cost of removal represents the difference between amounts collected in rates and costs actually incurred. •Electric Energy Costs—BGS: These costs represent the over or under recovered amounts associated with BGS, as approved by the BPU. Pursuant to BPU requirements, PSE&G serves as the supplier of last resort for electric customers within its service territory that are not served by another supplier. Pricing for those services are set by the BPU as a pass-through, resulting in no margin for PSE&G’s operations. Over or under recovered balances with interest are returned or recovered through monthly filings. •Formula Rate True-Up: PSE&G’s transmission revenues are earned under a FERC-approved annual formula rate mechanism which provides for an annual filing of an estimated revenue requirement with rates effective January 1 of each year and a true-up to that estimate based on actual revenue requirements. •Gas Costs—BGSS: These costs represent the over or under recovered amounts associated with BGSS, as approved by the BPU. Pursuant to BPU requirements, PSE&G serves as the supplier of last resort for gas customers within its service territory that are not served by another supplier. Pricing for those services are set by the BPU as a pass-through, resulting in no margin for PSE&G’s operations. Over or under collected balances are returned or recovered through an annual filing. Interest is accrued only on over recovered balances. •GPRC: This amount represents costs of the over or under collected balances associated with various renewable energy and energy efficiency programs. PSE&G files annually with the BPU for recovery of amounts that include a return on and of its investment over the lives of the underlying investments and capital assets which range from five to ten years. Interest is accrued monthly on any over or under recovered balances. Components of the GPRC include: Carbon Abatement, Energy Efficiency Economic Stimulus Program (EEE), EEE Extension Program, EEE Extension II Program, Solar Generation Investment Program (Solar 4 All®), Solar 4 All® Extension, Solar 4 All® Extension II, Solar Loan II Program, Solar Loan III Program, Energy Efficiency (EE) 2017 Program, Clean Energy Future–Energy Efficiency (CEF-EE), and the Transition Renewable Energy Certificate (TRECs) Program. •MGP Remediation Costs: Represents the low end of the range for the remaining environmental investigation and remediation program cleanup costs for MGPs that are probable of recovery in future rates. Once these costs are incurred, they are recovered through the RAC in the SBC over a seven year period with interest. •New Jersey Clean Energy Program: The BPU approved future funding requirements for Energy Efficiency and Renewable Energy Programs. The BPU funding requirements are recovered through the SBC. •Pension and OPEB Costs: Pursuant to the adoption of accounting guidance for employers’ defined benefit pension and OPEB plans, PSE&G recorded the unrecognized costs for defined benefit pension and other OPEB plans on the balance sheet as a Regulatory Asset. These costs represent net actuarial gains or losses and prior service costs which have not been expensed. These costs are amortized and recovered in future rates. •RAC (Other SBC): Costs incurred to clean up MGPs which are recovered over seven years with interest through an annual filing. •SBC: The SBC, as authorized by the BPU and the New Jersey Electric Discount and Energy Competition Act, includes costs related to PSE&G’s electric and gas business as follows: (1) the Universal Service Fund; (2) Energy Efficiency and Renewable Energy Programs; (3) Electric bad debt expense; and (4) the RAC for incurred MGP remediation expenditures. Over or under recovered balances with interest are to be returned or recovered through an annual filing. •TAC: This represents the over or under collected balances associated with the return of excess accumulated deferred income taxes and the flowback of previously realized and current tax repair deductions under a mechanism approved by the BPU in PSE&G’s 2018 Base Rate Case Settlement. Over or under collected balances are returned or recovered through an annual filing. PSE&G includes a return component on the flowback of the excess accumulated deferred income taxes and the previously realized tax repairs. Interest is accrued monthly on any over or under recovered balances. •Unamortized Loss on Reacquired Debt and Debt Expense: Represents losses on reacquired long-term debt and expenses associated with issuances of new debt, which are recovered through rates over the remaining life of the debt. •WNC: This represents the over or under recovery of gas margin which is filed annually with the BPU. The WNC requires PSE&G to calculate, at the end of each October-to-May period, the level by which margin revenues differed from what would have resulted if normal weather had occurred. Over recoveries are returned to customers in the next winter season while under recoveries (subject to an earnings cap) are recovered from customers in the next winter season. •ZEC Liability: This represents amounts to be returned to customers for overcollections, including interest associated with the ZEC program whereby PSE&G purchases ZECs from eligible nuclear plants. Significant 2019 and 2020 regulatory orders received and currently pending rate filings with the BPU by PSE&G are as follows: •BGSS—In September 2020, the BPU provisionally approved PSE&G’s request to maintain the current BGSS rate of 32 cents. This rate is subject to final approval. •CEF-Energy Cloud (EC) or Advanced Metering Infrastructure (AMI) Initiative—In January 2021, the BPU approved PSE&G’s CEF-EC filing to spend approximately $700 million in order to provide its 2.3 million electric customers with smart meters over the next four years. All of the capital and operating costs of the program will be recovered in PSE&G’s next base rate case, expected in the second half of 2024. From the start of the program until the commencement of new base rates, the return on and of the capital portion of the program will be included for recovery in those rates, as well as operating costs and stranded costs associated with the retirement of the existing meters. •CEF-Electric Vehicles (EV)—In January 2021, the BPU approved a program for PSE&G to provide investments of $166 million for EV charging. All of the capital and operating costs of the program will be recovered in PSE&G’s next base rate case. From the start of the program until the commencement of new base rates, the return on and of the capital portion of the program will be included for recovery in those rates, as well as operating costs. •CEF-EE, a New Component of the GPRC—In September 2020, the BPU approved PSE&G’s CEF-EE program, authorizing PSE&G to spend $1 billion in program costs. These costs will be recovered through the GPRC, with returns aligned with PSE&G’s most recent base rate case and recovered over a ten-year amortization period. The approval also included a Conservation Incentive Program, a mechanism that will provide for recovery of lost electric and gas variable margin revenues. This mechanism is effective in June 2021 for electric and October 2021 for gas. PSE&G will suspend its gas WNC when the gas deferral period begins. •COVID-19 Deferral—In July 2020, the BPU authorized regulated utilities in the State of New Jersey to create a COVID-19-related Regulatory Asset by deferring on their books and records the prudently incurred incremental costs related to COVID-19 as described above. In October 2020, the BPU broadened the scope of the docket to include all pandemic issues in a generic proceeding that will include submission of public comments and consideration of, among other things, the timing and scope of current and planned clean energy programs; other utility filings and mechanisms; utility financial strength; customer concerns; regulatory compliance and priorities; and ensuring the continued provision of safe and adequate service at just and reasonable rates, while recognizing the ramifications from the COVID-19 pandemic. PSE&G has made three quarterly filings as required by the BPU and recorded a Regulatory Asset of approximately $51 million in 2020 for net incremental costs, including $29 million for incremental bad debt expense associated with customer accounts receivable, which PSE&G believes are recoverable under the BPU order. •Energy Strong Program II (ES II) Recovery Filing—In December 2020, PSE&G filed its first ES II electric only cost recovery petition seeking BPU approval to recover in electric rates the return on and of ES II electric investments placed in service through January 31, 2021. In February 2021, the petition was updated to reflect actual investments and costs, and requests an annual revenue increase of $13 million with rates effective no earlier than May 1, 2021. This matter is pending. •Gas System Modernization Program II (GSMP II)—In July and November 2020, the BPU approved PSE&G’s GSMP II cost recovery petition requesting approximately $18 million and $20 million, respectively in gas revenues on an annual basis, which included GSMP II investments in service as of February 29, 2020 and August 31,2020, respectively. The increases were effective July 16, 2020 and December 1, 2020. In December 2020, PSE&G filed its next bi-annual GSMP II cost recovery petition seeking BPU approval to recover in gas base rates an estimated annual revenue increase of approximately $26 million effective June 1, 2021. This increase represents the return on and of GSMP II investments placed in service through February 28, 2021. This request will be updated in March 2021 for actual costs. •GPRC—In January 2021, the BPU provisionally approved PSE&G’s 2020 GPRC cost recovery petition requesting recovery of approximately $67 million and $20 million in electric and gas revenues, respectively, on an annual basis with rates effective February 1, 2021. •RAC—In December 2020, PSE&G filed its RAC 28 petition with the BPU seeking recovery of $35 million of net MGP remediation expenditures incurred from August 1, 2019 through July 31, 2020. This matter is pending. In September 2020, the BPU approved PSE&G’s RAC 27 filing requesting recovery of approximately $53 million in net MGP remediation expenditures incurred from August 1, 2018 through July 31, 2019. •SBC—In November 2020, PSE&G filed a petition to increase electric rates by approximately $76 million and decrease its gas rates by approximately $18 million, on an annual basis, in order to recover electric and gas costs incurred or expected to be incurred through February 28, 2022 under its EE and Renewable Energy and Social Programs. The increase to electric rates includes the impact of increased bad debt expense as a result of the negative economic impact of the ongoing coronavirus pandemic and moratorium on collections. This matter is pending. •TAC—In October 2020, PSE&G made its annual 2020 TAC filing. The TAC allows for the flowback to customers of excess accumulated deferred income taxes resulting from the reduction of the federal income tax rates provided in the Tax Act as well as the accumulated deferred income taxes from previously realized tax repair deductions and tax benefits from future tax repair deductions as realized. The 2020 TAC filing, updated in January 2021, requests BPU approval to reduce electric revenues by approximately $26 million and increase gas revenues by $48 million on an annual basis starting January 1, 2021, including an update to the additional unprotected amounts to be flowed back as a result of the Private Letter Ruling (PLR) discussed below. This matter is pending. In July 2020, the BPU gave final approval to PSE&G’s 2019 TAC filing that had been approved on a provisional basis in January 2020, with additional credits included in the final ruling. The final approval resulted in a reduction to electric and gas revenues of $25 million and $29 million, respectively, on an annual basis, effective July 16, 2020. PSE&G received a PLR from the Internal Revenue Service (IRS) in April 2020 that concluded that certain excess deferred taxes previously classified as protected should be classified as unprotected. Unprotected excess deferred income taxes are not subject to the tax normalization rules allowing them to be refunded to customers sooner as agreed to with the BPU. As part of a procedural discovery to obtain the BPU’s final approval, PSE&G proposed that it change its current provisional TAC rates to increase the credit and start flowing back these unprotected amounts starting in July 2020 through December 31, 2024, which the BPU approved. This resulted in a total additional credit to electric and gas customers of $50 million and $46 million, respectively. •Transition Incentive Program, a New Component of the GPRC—In 2019, the BPU approved an order establishing a Transition Incentive Program to serve as a bridge between the existing Solar Renewable Energy Certificate (SREC) program and a to-be-established successor incentive program and created a new incentive mechanism known as the Transition Renewable Energy Certificate (TRECs) Program. TRECs will be awarded to qualifying solar projects under the new program. In the TREC Order, the BPU directed the New Jersey EDCs to engage a TREC Administrator to acquire, on behalf of the EDCs, TRECs produced by eligible solar projects, which will be funded through a TREC charge to electric customers collected by the EDCs. The order allows the EDCs to recover their costs associated with the TREC program in an annual filing, subject to approval by the BPU. In August 2020, the BPU approved PSE&G’s request for increased rates of approximately $23 million annually for recovery of its expected share of TREC costs. These costs will be recovered as a new component of PSE&G’s existing electric GPRC, which is updated on an annual basis. •Transmission Formula Rates—In October 2020, PSE&G filed its 2020 Annual Transmission Formula Rate Update with FERC which will result in $119 million in increased annual transmission revenue effective January 1, 2021, subject to true-up. In June 2020, PSE&G filed its 2019 true-up adjustment pertaining to its transmission formula rates in effect for 2019. This filing resulted in an additional annual revenue requirement of $24 million more than the 2019 originally filed revenue. In April 2020, the IRS issued a PLR to PSE&G concluding that certain excess deferred taxes previously classified as protected should be classified as unprotected. Unprotected excess deferred income taxes are not subject to the normalization rules allowing them to be refunded to customers sooner as agreed to with FERC and the BPU. In July 2020, FERC approved PSE&G’s request to allow the entire amount of these unprotected excess deferred income taxes be returned to customers in the 2019 true-up filing. As a result of the FERC approval, PSE&G recorded a revenue reduction of approximately $38 million in the third quarter of 2020, fully offset by a reduction in Income Tax Expense. The refund will be provided to transmission ratepayers as a reduction to the 2021 transmission rates. •WNC—In November 2020, the BPU approved PSE&G’s updated WNC resetting the WNC rate to zero to eliminate any recovery of undercollected revenues from the warmer-than-normal 2019-2020 Winter Period. The updated filing eliminated the undercollection due to an earnings test limitation which was updated with actuals for the annual period ended September 2020 as stipulated in the filing. Previously, the BPU had approved a provisional rate effective October 1, 2020 for the collection of $10 million from customers over the 2020-2021 Winter Period. Approximately $2 million in October and November 2020 collections from the provisional rate will be refunded to customers with interest in the next annual filing. •ZEC Program—In December 2020, the BPU approved PSE&G’s petition to refund a total of $6.2 million, including interest, for overcollections resulting from the ZEC program for the energy years ended May 31, 2020 and 2019. In 2020, PSE&G purchased approximately $154 million in ZECs, including interest, from the eligible nuclear plants selected by the BPU with the final payment made in August 2020. As a result of the collections and required ZEC payments, there was approximately $6 million in overcollected revenues, including interest, for the energy year ended May 31, 2020. This was combined with a $0.2 million overcollection from the prior period for a total of $6.2 million, with the credit to rates effective January 1, 2021.
Public Service Electric and Gas Company |
Regulatory Assets And Liabilities [Line Items] |
Regulatory Assets and Liabilities | Regulatory Assets and Liabilities PSE&G prepares its financial statements in accordance with GAAP for regulated utilities as described in Note 1. Organization, Basis of Presentation and Summary of Significant Accounting Policies. PSE&G has deferred certain costs based on rate orders issued by the BPU or FERC or based on PSE&G’s experience with prior rate proceedings. Most of PSE&G’s Regulatory Assets and Liabilities as of December 31, 2020 are supported by written orders, either explicitly or implicitly through the BPU’s treatment of various cost items. These costs will be recovered and amortized over various future periods. Regulatory Assets and other investments and costs incurred under our various infrastructure filings and clause mechanisms are subject to prudence reviews and can be disallowed in the future by regulatory authorities. To the extent that collection of any infrastructure or clause mechanism revenue, Regulatory Assets or payments of Regulatory Liabilities is no longer probable, the amounts would be charged or credited to income. PSE&G had the following Regulatory Assets and Liabilities:
|  |  | As of December 31, |
|  |  | 2020 |  | 2019 |
|  |  | Millions |
| Regulatory Assets |  |  |  |  |
| Current |  |  |  |  |
| New Jersey Clean Energy Program |  | $ | 143 |  |  | $ | 143 |  |
| Societal Benefits Charge (SBC) |  | 82 |  |  | 30 |  |
| Electric Energy Costs—Basic Generation Service (BGS) |  | 60 |  |  | 57 |  |
| 2018 Distribution Base Rate Case Regulatory Assets (BRC) |  | 56 |  |  | 56 |  |
| Formula Rate True-up |  | 23 |  |  | 52 |  |
| Other |  | 5 |  |  | 13 |  |
| Total Current Regulatory Assets |  | 369 |  |  | 351 |  |
| Noncurrent |  |  |  |  |
| Pension and OPEB Costs |  | $ | 1,489 |  |  | $ | 1,284 |  |
| Deferred Income Tax Regulatory Assets |  | 1,014 |  |  | 966 |  |
| Manufactured Gas Plant (MGP) Remediation Costs |  | 320 |  |  | 357 |  |
| Electric Transmission and Gas Cost of Removal |  | 189 |  |  | 216 |  |
| Asset Retirement Obligation |  | 184 |  |  | 172 |  |
| Green Program Recovery Charges (GPRC) |  | 139 |  |  | 118 |  |
| Remediation Adjustment Charge (RAC) (Other SBC) |  | 134 |  |  | 158 |  |
| BRC |  | 103 |  |  | 159 |  |
| Deferred Storm Costs |  | 99 |  |  | 12 |  |
| COVID-19 Deferral |  | 51 |  |  | — |  |
| Unamortized Loss on Reacquired Debt and Debt Expense |  | 36 |  |  | 42 |  |
| Gas Costs—BGSS |  | 26 |  |  | 27 |  |
| Other |  | 88 |  |  | 166 |  |
| Total Noncurrent Regulatory Assets |  | 3,872 |  |  | 3,677 |  |
| Total Regulatory Assets |  | $ | 4,241 |  |  | $ | 4,028 |  |
|  |  | As of December 31, |
|  |  | 2020 |  | 2019 |
|  |  | Millions |
| Regulatory Liabilities |  |  |  |  |
| Current |  |  |  |  |
| Deferred Income Tax Regulatory Liabilities |  | $ | 223 |  |  | $ | 193 |  |
| Gas Costs—BGSS |  | 20 |  |  | — |  |
| ZEC Liability |  | 17 |  |  | 10 |  |
| Tax Adjustment Credit (TAC) |  | 5 |  |  | 12 |  |
| Weather Normalization Charge (WNC) |  | 2 |  |  | 15 |  |
| Other |  | 27 |  |  | 4 |  |
| Total Current Regulatory Liabilities |  | 294 |  |  | 234 |  |
| Noncurrent |  |  |  |  |
| Deferred Income Tax Regulatory Liabilities |  | $ | 2,670 |  |  | $ | 2,955 |  |
| Electric Distribution Cost of Removal |  | 37 |  |  | 47 |  |
| Total Noncurrent Regulatory Liabilities |  | 2,707 |  |  | 3,002 |  |
| Total Regulatory Liabilities |  | $ | 3,001 |  |  | $ | 3,236 |  |
All Regulatory Assets and Liabilities are excluded from PSE&G’s rate base unless otherwise noted. The Regulatory Assets and Liabilities in the table above are defined as follows: •Asset Retirement Obligation: These costs represent the differences between rate-regulated cost of removal accounting and asset retirement accounting under GAAP. These costs will be recovered in future rates as assets are retired. •BRC: Represents deferred costs, primarily comprised of storm costs incurred in the cleanup of major storms from 2010 through 2018, which are being amortized over five years pursuant to the 2018 Distribution Base Rate Case Settlement. •COVID-19 Deferral: These amounts represent incremental costs related to COVID-19 as authorized for deferral in an order issued by the BPU to all New Jersey regulated utilities in July 2020. The BPU authorized such utilities to create a COVID-19-related Regulatory Asset by deferring on their books and records the prudently incurred incremental costs related to COVID-19 during the Regulatory Asset period, beginning on March 9, 2020 through September 30, 2021, or 60 days after the New Jersey governor determines that the Public Health Emergency is no longer in effect, or in the absence of such a determination, 60 days from the time the Public Health Emergency automatically terminates by law, whichever is later. Deferred costs are to be offset by any federal or state assistance that the utility may receive as a direct result of the COVID-19 pandemic. Utilities must file quarterly reports of the costs incurred and offsets. Each participating utility must file a petition documenting its prudently incurred incremental COVID-19 costs by December 31, 2021, or within 60 days of the close of the Regulatory Asset period as described above, whichever is later. Any potential rate recovery, including any prudency determinations and the appropriate period of recovery, will be addressed through that filing, or in the alternative, the utility may request that the BPU defer consideration of rate recovery for a future base rate case. •Deferred Income Tax Regulatory Assets: These amounts relate to deferred income taxes arising from utility operations that have not been included in customer rates relating to depreciation, ITCs and other flow-through items, including the flowback to customers of accumulated deferred income taxes related to tax repair deductions. As part of its base rate case settlement with the BPU and the establishment of the TAC mechanism in 2018, PSE&G agreed to a ten-year flowback to customers of its accumulated deferred income taxes from previously realized tax repair deductions which resulted in the recognition of a $581 million Regulatory Asset and Regulatory Liability as of September 30, 2018. In addition, PSE&G agreed to the current flowback of tax benefits from ongoing tax repair deductions as realized which results in the recording of a Regulatory Asset upon flowback. For the years ended December 31, 2020 and 2019, PSE&G had provided $31 million and $58 million, respectively, in current tax repair flowbacks to customers. The recovery and amortization of the tax repair-related Deferred Income Tax Regulatory Assets will be determined in PSE&G’s subsequent base rate cases. •Deferred Income Tax Regulatory Liabilities: These liabilities relate to amounts due to customers for excess deferred income taxes as a result of the reduction in the federal corporate income tax rate provided in the Tax Cuts and Jobs Act of 2017 (Tax Act), and accumulated deferred income taxes from previously realized distribution-related tax repair deductions. As part of its settlement with its regulators, PSE&G agreed to refund the excess deferred income taxes as follows: •Unprotected distribution-related excess deferred income taxes are being refunded to customers over five years through PSE&G’s TAC mechanism as approved in its 2018 distribution base rate proceeding. As of December 31, 2020, the balance remaining to be flowed back to customers was approximately $520 million with the remaining flowback period through 2023. •Protected distribution-related excess deferred income taxes are being refunded to customers over the remaining useful life of distribution property, plant and equipment through PSE&G’s TAC mechanism. As of December 31, 2020, the balance remaining to be flowed back to customers was approximately $933 million. •Previously realized distribution-related tax repair deductions are being refunded to customers over ten years through PSE&G’s TAC mechanism. As of December 31, 2020, the balance remaining to be flowed back to customers was approximately $500 million through 2028. •Protected transmission-related excess deferred income taxes are being refunded to customers over the remaining useful life of transmission property, plant and equipment through PSE&G’s transmission formula rate mechanism. As of December 31, 2020, the balance remaining to be flowed back to customers was approximately $940 million. •Unprotected transmission-related deferred income taxes were fully refunded to customers in 2019 and 2020. •Deferred Storm Costs: Incremental costs incurred in the restoration and related costs from major storms in 2019 and 2020 for which PSE&G will seek recovery in its next base rate proceeding. •Electric and Gas Cost of Removal: PSE&G accrues and collects in rates for the cost of removing, dismantling and disposing of its T&D assets upon retirement. The Regulatory Asset or Liability for non-legally required cost of removal represents the difference between amounts collected in rates and costs actually incurred. •Electric Energy Costs—BGS: These costs represent the over or under recovered amounts associated with BGS, as approved by the BPU. Pursuant to BPU requirements, PSE&G serves as the supplier of last resort for electric customers within its service territory that are not served by another supplier. Pricing for those services are set by the BPU as a pass-through, resulting in no margin for PSE&G’s operations. Over or under recovered balances with interest are returned or recovered through monthly filings. •Formula Rate True-Up: PSE&G’s transmission revenues are earned under a FERC-approved annual formula rate mechanism which provides for an annual filing of an estimated revenue requirement with rates effective January 1 of each year and a true-up to that estimate based on actual revenue requirements. •Gas Costs—BGSS: These costs represent the over or under recovered amounts associated with BGSS, as approved by the BPU. Pursuant to BPU requirements, PSE&G serves as the supplier of last resort for gas customers within its service territory that are not served by another supplier. Pricing for those services are set by the BPU as a pass-through, resulting in no margin for PSE&G’s operations. Over or under collected balances are returned or recovered through an annual filing. Interest is accrued only on over recovered balances. •GPRC: This amount represents costs of the over or under collected balances associated with various renewable energy and energy efficiency programs. PSE&G files annually with the BPU for recovery of amounts that include a return on and of its investment over the lives of the underlying investments and capital assets which range from five to ten years. Interest is accrued monthly on any over or under recovered balances. Components of the GPRC include: Carbon Abatement, Energy Efficiency Economic Stimulus Program (EEE), EEE Extension Program, EEE Extension II Program, Solar Generation Investment Program (Solar 4 All®), Solar 4 All® Extension, Solar 4 All® Extension II, Solar Loan II Program, Solar Loan III Program, Energy Efficiency (EE) 2017 Program, Clean Energy Future–Energy Efficiency (CEF-EE), and the Transition Renewable Energy Certificate (TRECs) Program. •MGP Remediation Costs: Represents the low end of the range for the remaining environmental investigation and remediation program cleanup costs for MGPs that are probable of recovery in future rates. Once these costs are incurred, they are recovered through the RAC in the SBC over a seven year period with interest. •New Jersey Clean Energy Program: The BPU approved future funding requirements for Energy Efficiency and Renewable Energy Programs. The BPU funding requirements are recovered through the SBC. •Pension and OPEB Costs: Pursuant to the adoption of accounting guidance for employers’ defined benefit pension and OPEB plans, PSE&G recorded the unrecognized costs for defined benefit pension and other OPEB plans on the balance sheet as a Regulatory Asset. These costs represent net actuarial gains or losses and prior service costs which have not been expensed. These costs are amortized and recovered in future rates. •RAC (Other SBC): Costs incurred to clean up MGPs which are recovered over seven years with interest through an annual filing. •SBC: The SBC, as authorized by the BPU and the New Jersey Electric Discount and Energy Competition Act, includes costs related to PSE&G’s electric and gas business as follows: (1) the Universal Service Fund; (2) Energy Efficiency and Renewable Energy Programs; (3) Electric bad debt expense; and (4) the RAC for incurred MGP remediation expenditures. Over or under recovered balances with interest are to be returned or recovered through an annual filing. •TAC: This represents the over or under collected balances associated with the return of excess accumulated deferred income taxes and the flowback of previously realized and current tax repair deductions under a mechanism approved by the BPU in PSE&G’s 2018 Base Rate Case Settlement. Over or under collected balances are returned or recovered through an annual filing. PSE&G includes a return component on the flowback of the excess accumulated deferred income taxes and the previously realized tax repairs. Interest is accrued monthly on any over or under recovered balances. •Unamortized Loss on Reacquired Debt and Debt Expense: Represents losses on reacquired long-term debt and expenses associated with issuances of new debt, which are recovered through rates over the remaining life of the debt. •WNC: This represents the over or under recovery of gas margin which is filed annually with the BPU. The WNC requires PSE&G to calculate, at the end of each October-to-May period, the level by which margin revenues differed from what would have resulted if normal weather had occurred. Over recoveries are returned to customers in the next winter season while under recoveries (subject to an earnings cap) are recovered from customers in the next winter season. •ZEC Liability: This represents amounts to be returned to customers for overcollections, including interest associated with the ZEC program whereby PSE&G purchases ZECs from eligible nuclear plants. Significant 2019 and 2020 regulatory orders received and currently pending rate filings with the BPU by PSE&G are as follows: •BGSS—In September 2020, the BPU provisionally approved PSE&G’s request to maintain the current BGSS rate of 32 cents. This rate is subject to final approval. •CEF-Energy Cloud (EC) or Advanced Metering Infrastructure (AMI) Initiative—In January 2021, the BPU approved PSE&G’s CEF-EC filing to spend approximately $700 million in order to provide its 2.3 million electric customers with smart meters over the next four years. All of the capital and operating costs of the program will be recovered in PSE&G’s next base rate case, expected in the second half of 2024. From the start of the program until the commencement of new base rates, the return on and of the capital portion of the program will be included for recovery in those rates, as well as operating costs and stranded costs associated with the retirement of the existing meters. •CEF-Electric Vehicles (EV)—In January 2021, the BPU approved a program for PSE&G to provide investments of $166 million for EV charging. All of the capital and operating costs of the program will be recovered in PSE&G’s next base rate case. From the start of the program until the commencement of new base rates, the return on and of the capital portion of the program will be included for recovery in those rates, as well as operating costs. •CEF-EE, a New Component of the GPRC—In September 2020, the BPU approved PSE&G’s CEF-EE program, authorizing PSE&G to spend $1 billion in program costs. These costs will be recovered through the GPRC, with returns aligned with PSE&G’s most recent base rate case and recovered over a ten-year amortization period. The approval also included a Conservation Incentive Program, a mechanism that will provide for recovery of lost electric and gas variable margin revenues. This mechanism is effective in June 2021 for electric and October 2021 for gas. PSE&G will suspend its gas WNC when the gas deferral period begins. •COVID-19 Deferral—In July 2020, the BPU authorized regulated utilities in the State of New Jersey to create a COVID-19-related Regulatory Asset by deferring on their books and records the prudently incurred incremental costs related to COVID-19 as described above. In October 2020, the BPU broadened the scope of the docket to include all pandemic issues in a generic proceeding that will include submission of public comments and consideration of, among other things, the timing and scope of current and planned clean energy programs; other utility filings and mechanisms; utility financial strength; customer concerns; regulatory compliance and priorities; and ensuring the continued provision of safe and adequate service at just and reasonable rates, while recognizing the ramifications from the COVID-19 pandemic. PSE&G has made three quarterly filings as required by the BPU and recorded a Regulatory Asset of approximately $51 million in 2020 for net incremental costs, including $29 million for incremental bad debt expense associated with customer accounts receivable, which PSE&G believes are recoverable under the BPU order. •Energy Strong Program II (ES II) Recovery Filing—In December 2020, PSE&G filed its first ES II electric only cost recovery petition seeking BPU approval to recover in electric rates the return on and of ES II electric investments placed in service through January 31, 2021. In February 2021, the petition was updated to reflect actual investments and costs, and requests an annual revenue increase of $13 million with rates effective no earlier than May 1, 2021. This matter is pending. •Gas System Modernization Program II (GSMP II)—In July and November 2020, the BPU approved PSE&G’s GSMP II cost recovery petition requesting approximately $18 million and $20 million, respectively in gas revenues on an annual basis, which included GSMP II investments in service as of February 29, 2020 and August 31,2020, respectively. The increases were effective July 16, 2020 and December 1, 2020. In December 2020, PSE&G filed its next bi-annual GSMP II cost recovery petition seeking BPU approval to recover in gas base rates an estimated annual revenue increase of approximately $26 million effective June 1, 2021. This increase represents the return on and of GSMP II investments placed in service through February 28, 2021. This request will be updated in March 2021 for actual costs. •GPRC—In January 2021, the BPU provisionally approved PSE&G’s 2020 GPRC cost recovery petition requesting recovery of approximately $67 million and $20 million in electric and gas revenues, respectively, on an annual basis with rates effective February 1, 2021. •RAC—In December 2020, PSE&G filed its RAC 28 petition with the BPU seeking recovery of $35 million of net MGP remediation expenditures incurred from August 1, 2019 through July 31, 2020. This matter is pending. In September 2020, the BPU approved PSE&G’s RAC 27 filing requesting recovery of approximately $53 million in net MGP remediation expenditures incurred from August 1, 2018 through July 31, 2019. •SBC—In November 2020, PSE&G filed a petition to increase electric rates by approximately $76 million and decrease its gas rates by approximately $18 million, on an annual basis, in order to recover electric and gas costs incurred or expected to be incurred through February 28, 2022 under its EE and Renewable Energy and Social Programs. The increase to electric rates includes the impact of increased bad debt expense as a result of the negative economic impact of the ongoing coronavirus pandemic and moratorium on collections. This matter is pending. •TAC—In October 2020, PSE&G made its annual 2020 TAC filing. The TAC allows for the flowback to customers of excess accumulated deferred income taxes resulting from the reduction of the federal income tax rates provided in the Tax Act as well as the accumulated deferred income taxes from previously realized tax repair deductions and tax benefits from future tax repair deductions as realized. The 2020 TAC filing, updated in January 2021, requests BPU approval to reduce electric revenues by approximately $26 million and increase gas revenues by $48 million on an annual basis starting January 1, 2021, including an update to the additional unprotected amounts to be flowed back as a result of the Private Letter Ruling (PLR) discussed below. This matter is pending. In July 2020, the BPU gave final approval to PSE&G’s 2019 TAC filing that had been approved on a provisional basis in January 2020, with additional credits included in the final ruling. The final approval resulted in a reduction to electric and gas revenues of $25 million and $29 million, respectively, on an annual basis, effective July 16, 2020. PSE&G received a PLR from the Internal Revenue Service (IRS) in April 2020 that concluded that certain excess deferred taxes previously classified as protected should be classified as unprotected. Unprotected excess deferred income taxes are not subject to the tax normalization rules allowing them to be refunded to customers sooner as agreed to with the BPU. As part of a procedural discovery to obtain the BPU’s final approval, PSE&G proposed that it change its current provisional TAC rates to increase the credit and start flowing back these unprotected amounts starting in July 2020 through December 31, 2024, which the BPU approved. This resulted in a total additional credit to electric and gas customers of $50 million and $46 million, respectively. •Transition Incentive Program, a New Component of the GPRC—In 2019, the BPU approved an order establishing a Transition Incentive Program to serve as a bridge between the existing Solar Renewable Energy Certificate (SREC) program and a to-be-established successor incentive program and created a new incentive mechanism known as the Transition Renewable Energy Certificate (TRECs) Program. TRECs will be awarded to qualifying solar projects under the new program. In the TREC Order, the BPU directed the New Jersey EDCs to engage a TREC Administrator to acquire, on behalf of the EDCs, TRECs produced by eligible solar projects, which will be funded through a TREC charge to electric customers collected by the EDCs. The order allows the EDCs to recover their costs associated with the TREC program in an annual filing, subject to approval by the BPU. In August 2020, the BPU approved PSE&G’s request for increased rates of approximately $23 million annually for recovery of its expected share of TREC costs. These costs will be recovered as a new component of PSE&G’s existing electric GPRC, which is updated on an annual basis. •Transmission Formula Rates—In October 2020, PSE&G filed its 2020 Annual Transmission Formula Rate Update with FERC which will result in $119 million in increased annual transmission revenue effective January 1, 2021, subject to true-up. In June 2020, PSE&G filed its 2019 true-up adjustment pertaining to its transmission formula rates in effect for 2019. This filing resulted in an additional annual revenue requirement of $24 million more than the 2019 originally filed revenue. In April 2020, the IRS issued a PLR to PSE&G concluding that certain excess deferred taxes previously classified as protected should be classified as unprotected. Unprotected excess deferred income taxes are not subject to the normalization rules allowing them to be refunded to customers sooner as agreed to with FERC and the BPU. In July 2020, FERC approved PSE&G’s request to allow the entire amount of these unprotected excess deferred income taxes be returned to customers in the 2019 true-up filing. As a result of the FERC approval, PSE&G recorded a revenue reduction of approximately $38 million in the third quarter of 2020, fully offset by a reduction in Income Tax Expense. The refund will be provided to transmission ratepayers as a reduction to the 2021 transmission rates. •WNC—In November 2020, the BPU approved PSE&G’s updated WNC resetting the WNC rate to zero to eliminate any recovery of undercollected revenues from the warmer-than-normal 2019-2020 Winter Period. The updated filing eliminated the undercollection due to an earnings test limitation which was updated with actuals for the annual period ended September 2020 as stipulated in the filing. Previously, the BPU had approved a provisional rate effective October 1, 2020 for the collection of $10 million from customers over the 2020-2021 Winter Period. Approximately $2 million in October and November 2020 collections from the provisional rate will be refunded to customers with interest in the next annual filing. •ZEC Program—In December 2020, the BPU approved PSE&G’s petition to refund a total of $6.2 million, including interest, for overcollections resulting from the ZEC program for the energy years ended May 31, 2020 and 2019. In 2020, PSE&G purchased approximately $154 million in ZECs, including interest, from the eligible nuclear plants selected by the BPU with the final payment made in August 2020. As a result of the collections and required ZEC payments, there was approximately $6 million in overcollected revenues, including interest, for the energy year ended May 31, 2020. This was combined with a $0.2 million overcollection from the prior period for a total of $6.2 million, with the credit to rates effective January 1, 2021.

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