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Revenue Recognition | 12 Months Ended
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Dec. 31, 2018
Revenue from Contract with Customer [Abstract] |
Revenue from Contract with Customer | Revenue Recognition ASC 606 Adoption. In 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASC 606). ASU 2014-09 outlines a single, comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (ASC 606): Principal versus Agent Considerations, and ASU 2016-12, Revenue from Contracts with Customers (ASC 606): Narrow-Scope Improvements and Practical Expedients. We adopted the provisions of ASC 606 beginning on January 1, 2018 using a modified retrospective method, which was applied to all contracts. No material adjustments were made to January 1, 2018 opening balances as a result of the adoption. As required under the modified retrospective method of adoption, results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with ASC 605. The table below provides results for the year ended December 31, 2018 as if it had been prepared under historic accounting guidance. We included operating revenue information for the years ended December 31, 2017 and 2016 for comparability.
Year Ended December 31, (in millions) |  | 2018 |  | 2017 |  | 2016
Operating Revenues |  |  |  |  |  |
Gas Distribution |  | $ | 2,348.4 |  |  | $ | 2,063.2 |  |  | $ | 1,850.9 |
Gas Transportation |  | 1,055.2 |  |  | 1,021.5 |  |  | 964.6 |
Electric |  | 1,707.4 |  |  | 1,785.5 |  |  | 1,660.8 |
Other |  | 3.5 |  |  | 4.4 |  |  | 16.2 |
Total Operating Revenues |  | $ | 5,114.5 |  |  | $ | 4,874.6 |  |  | $ | 4,492.5 |
Beginning in 2018 with the adoption of ASC 606, the Statements of Consolidated Income (Loss) disaggregates “Customer revenues” (i.e. ASC 606 Revenues) from “Other revenues,” both of which are discussed in more detail below. Customer Revenues. Substantially all of our revenues are tariff-based, which we have concluded is within the scope of ASC 606. Under ASC 606, the recipients of our utility service meet the definition of a customer, while the operating company tariffs represent an agreement that meets the definition of a contract. ASC 606 defines a contract as an agreement between two or more parties, in this case us and the customer, which creates enforceable rights and obligations. In order to be considered a contract, we have determined that it is probable that substantially all of the consideration to which we are entitled from customers will be collected upon satisfaction of performance obligations. We maintain common utility credit risk mitigation practices, including requiring deposits and actively pursuing collection of past due amounts. In addition, our regulated operations utilize certain regulatory mechanisms that facilitate recovery of bad debt costs within tariff-based rates, which provides further evidence of collectibility. Customers in certain of our jurisdictions participate in programs that allow for a fixed payment each month regardless of usage. Payments received that exceed the value of gas or electricity actually delivered are recorded as a liability and presented in "Customer Deposits and Credits." Amounts in this account are reduced and revenue is recorded when customer usage begins to exceed payments received. We have identified our performance obligations created under tariff-based sales as 1) the commodity (natural gas or electricity, which includes generation and capacity) and 2) delivery. These commodities are sold and / or delivered to and generally consumed by customers simultaneously, leading to satisfaction of our performance obligations over time as gas or electricity is delivered to customers. Due to the at-will nature of utility customers, performance obligations are limited to the services requested and received to date. Once complete, we generally maintain no additional performance obligations. Transaction prices for each performance obligation are generally prescribed by each operating company’s respective tariff. Rates include provisions to adjust billings for fluctuations in fuel and purchased power costs and cost of natural gas. Revenues are adjusted for differences between actual costs subject to reconciliation and the amounts billed in current rates. Under or over recovered revenues related to these cost recovery mechanisms are included in regulatory assets or liabilities on the Consolidated Balance Sheets and are recovered from or returned to customers through adjustments to tariff rates. As we provide and deliver service to customers, revenue is recognized based on the transaction price allocated to each performance obligation. In general, revenue recognized from tariff-based sales is equivalent to the value of natural gas or electricity supplied and billed each period, in addition to an estimate for deliveries completed during the period but not yet billed to the customer. In addition to tariff-based sales, our Gas Distribution Operations segment enters into balancing and exchange arrangements of natural gas as part of our operations and off-system sales programs. We have concluded that these sales are within the scope of ASC 606. Performance obligations for these types of sales include transportation and storage of natural gas and can be satisfied at a point in time or over a period of time, depending on the specific transaction. For those transactions that span a period of time, we record a receivable or payable for any cumulative gas imbalances, as well as for any gas inventory borrowed or lent under a Gas Distributions Operations exchange agreement. Revenue Disaggregation and Reconciliation. We disaggregate revenue from contracts with customers based upon reportable segment as well as by customer class. As our revenues are primarily earned over a period of time, and we do not earn a material amount of revenues at a point in time, revenues are not disaggregated as such below. The Gas Distribution Operations segment provides natural gas service and transportation for residential, commercial and industrial customers in Ohio, Pennsylvania, Virginia, Kentucky, Maryland, Indiana and Massachusetts. The Electric Operations segment provides electric service in 20 counties in the northern part of Indiana. The table below reconciles revenue disaggregation by customer class to segment revenue as well as to revenues reflected on the Statements of Consolidated Income (Loss):
Year Ended December 31, 2018 (in millions) | Gas Distribution Operations |  | Electric Operations |  | Corporate and Other |  | Total
Customer Revenues(1) |  |  |  |  |  |  |
Residential | $ | 2,250.0 |  |  | $ | 494.7 |  |  | $ | — |  |  | $ | 2,744.7 |
Commercial | 751.9 |  |  | 492.7 |  |  | — |  |  | 1,244.6 |
Industrial | 228.0 |  |  | 613.6 |  |  | — |  |  | 841.6 |
Off-system | 92.4 |  |  | — |  |  | — |  |  | 92.4 |
Miscellaneous | 49.7 |  |  | 17.4 |  |  | 0.7 |  |  | 67.8 |
Total Customer Revenues | $ | 3,372.0 |  |  | $ | 1,618.4 |  |  | $ | 0.7 |  |  | $ | 4,991.1 |
Other Revenues | 34.4 |  |  | 89.0 |  |  | — |  |  | 123.4 |
Total Operating Revenues | $ | 3,406.4 |  |  | $ | 1,707.4 |  |  | $ | 0.7 |  |  | $ | 5,114.5 |
(1) Customer revenue amounts exclude intersegment revenues. See Note 22, "Segments of Business," for discussion of intersegment revenues. Customer Accounts Receivable. Accounts receivable on our Consolidated Balance Sheets includes both billed and unbilled amounts, as well as certain amounts that are not related to customer revenues. Unbilled amounts of accounts receivable relate to a portion of a customer’s consumption of gas or electricity from the date of the last cycle billing through the last day of the month (balance sheet date). Factors taken into consideration when estimating unbilled revenue include historical usage, customer rates and weather. The opening and closing balances of customer receivables for the years ended December 31, 2018 and 2017 are presented in the table below. We had no significant contract assets or liabilities during the period. Additionally, we have not incurred any significant costs to obtain or fulfill contracts.
(in millions) | Customer Accounts Receivable, Billed (less reserve)(1) |  | Customer Accounts Receivable, Unbilled (less reserve)(2)
Balance as of December 31, 2017 | $ | 477.0 |  |  | $ | 378.6 |
Balance as of December 31, 2018 | 540.5 |  |  | 349.1 |
Increase (Decrease) | $ | 63.5 |  |  | $ | (29.5 | )
(1) Customer billed receivables increased over the period due to November 2018 being colder than November 2017, leading to more gas usage included in December bills. (2) Customer unbilled receivables decreased over the period due December 2018 being warmer than December 2017, leading to less estimated gas usage. Utility revenues are billed to customers monthly on a cycle basis. We generally expect that substantially all customer accounts receivable will be collected within the month following customer billing, as this revenue consists primarily of monthly, tariff-based billings for service and usage. Other Revenues. As permitted by accounting principles generally accepted in the United States, regulated utilities have the ability to earn certain types of revenue that are outside the scope of ASC 606. These revenues primarily represent revenue earned under alternative revenue programs. Alternative revenue programs represent regulator-approved programs that allow for the adjustment of billings and revenue for certain broad, external factors, or for additional billings if the entity achieves certain objectives, such as a specified reduction of costs. We maintain a variety of these programs, including demand side management initiatives that recover costs associated with the implementation of energy efficiency programs, as well as normalization programs that adjust revenues for the effects of weather or other external factors. Additionally, we maintain certain programs with future test periods that operate similarly to FERC formula rate programs and allow for recovery of costs incurred to replace aging infrastructure. When the criteria to recognize Alternative Revenue have been met, we establish a regulatory asset and present revenue from alternative revenue programs on the Statements of Consolidated Income (Loss) as “Other revenues.” When amounts previously recognized under Alternative Revenue accounting guidance are billed, we reduce the regulatory asset and record a customer account receivable.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 + Details
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