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Regulatory Matters | 12 Months Ended
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Dec. 31, 2023
Regulatory Assets and Liabilities Disclosure [Abstract] |
Regulatory Matters | Regulatory Assets and Liabilities We follow the accounting and reporting requirements of ASC Topic 980, which provides that regulated entities account for and report assets and liabilities consistent with the economic effect of regulatory rate-making procedures when the rates established are designed to recover the costs of providing the regulated service and it is probable that such rates will be charged and collected from customers. Certain expenses and credits subject to utility regulation or rate determination normally reflected in income or expense are deferred on the balance sheet and are recognized in the income statement as the related amounts are included in customer rates and recovered from or refunded to customers. We assess the probability of collection for all of our regulatory assets each period. Regulatory assets were comprised of the following items:
At December 31, (in millions) | 2023 |  | 2022
Regulatory Assets |  |  |
Unrecognized pension and other postretirement benefit costs (see Note 16) | $ | 561.6 |  |  | $ | 607.5 |
Deferred pension and other postretirement benefit costs (see Note 16) | 59.7 |  |  | 72.2 |
Environmental costs (see Note 19-D.) | 40.6 |  |  | 41.4 |
Regulatory effects of accounting for income taxes (see Note 1-N. and Note 15) | 163.5 |  |  | 158.0 |
Under-recovered gas and fuel costs (see Note 1-J.) | 12.7 |  |  | 85.5 |
Depreciation | 201.9 |  |  | 191.3 |
Post-in-service carrying charges | 269.9 |  |  | 251.5 |
Safety activity costs | 206.6 |  |  | 200.7 |
DSM programs | 25.0 |  |  | 37.5 |
Retired coal generating stations | 682.0 |  |  | 744.0 |
Losses on commodity price risk programs (See Note 13) | 24.4 |  |  | 10.0 |
Deferred property taxes | 72.3 |  |  | 68.5 |
Renewable energy investments (See Note 1-S. and Note 4) | 60.8 |  |  | 37.7 |
Other | 79.2 |  |  | 75.0 |
Total Regulatory Assets | $ | 2,460.2 |  |  | $ | 2,580.8 |
Less: Current Portion | 214.3 |  |  | 233.2 |
Total Noncurrent Regulatory Assets | $ | 2,245.9 |  |  | $ | 2,347.6 |
Regulatory liabilities were comprised of the following items:
At December 31, (in millions) | 2023 |  | 2022
Regulatory Liabilities |  |  |
Over-recovered gas and fuel costs (see Note 1-J.) | $ | 144.5 |  |  | $ | 20.6 |
Cost of removal (see Note 11) | 597.2 |  |  | 675.9 |
Regulatory effects of accounting for income taxes (see Note 1-N. and Note 15) | 849.9 |  |  | 996.3 |
Deferred pension and other postretirement benefit costs (see Note 16) | 54.0 |  |  | 66.8 |
Gains on commodity price risk programs (See Note 13) | 23.3 |  |  | 90.0 |
Customer Assistance Programs | 19.8 |  |  | 32.9 |
Off-Systems sales sharing | 19.0 |  |  | 12.3 |
HLBV Adjustments under ASC 980 | 18.1 |  |  | 5.4 |
Rate Refunds | 16.1 |  |  | 51.4 |
Other | 47.4 |  |  | 61.0 |
Total Regulatory Liabilities | $ | 1,789.3 |  |  | $ | 2,012.6 |
Less: Current Portion | 278.6 |  |  | 236.8 |
Total Noncurrent Regulatory Liabilities | $ | 1,510.7 |  |  | $ | 1,775.8 |
Regulatory assets, including under-recovered gas and fuel costs and depreciation, of approximately $716.4 million and $1,324.7 million as of December 31, 2023 and 2022, respectively, are not earning a return on investment. These costs are recovered over a remaining life, the longest of which is 69 years. Assets: Unrecognized pension and other postretirement benefit costs. Represents the deferred other comprehensive income or loss of the actuarial gains or losses and the prior service costs or credits that arise during the period but that are not immediately recognized as components of net periodic benefit costs by certain subsidiaries that will ultimately be recovered through base rates. Deferred pension and other postretirement benefit costs. Primarily relates to the difference between defined benefit plan expense recorded by certain subsidiaries due to regulatory orders and the corresponding expense that would otherwise be recorded in accordance with GAAP. The majority of these amounts are driven by Columbia of Ohio. On January 26, 2023, the PUCO approved the joint stipulation in Columbia of Ohio's rate case in which, Columbia agreed to forego the continuation of its pension and OPEB deferral prospectively as of March 31, 2021. Environmental costs. Includes certain recoverable costs related to gas plant sites, disposal sites or other sites onto which material may have migrated, the recovery of which is to be addressed in future base rates, billing riders or tracking mechanisms of certain of our subsidiaries. Regulatory effects of accounting for income taxes. Represents the deferral and under collection of deferred taxes in the rate making process. Under-recovered gas and fuel costs. Represents the difference between the costs of gas and fuel, as well as energy acquired through power purchase agreements, including NIPSCO's own renewable projects, and the recovery of such costs in revenue and is used to adjust future billings for such deferrals on a basis consistent with applicable state-approved tariff provisions. Recovery of these costs is achieved through tracking mechanisms. Depreciation. Represents differences between depreciation expense incurred on a GAAP basis and that prescribed through regulatory order. The majority of this balance is driven by Columbia of Ohio's IRP and CEP deferrals. Post-in-service carrying charges. Represents deferred debt-based carrying charges incurred on certain assets placed into service but not yet included in customer rates. The majority of this balance is driven by Columbia of Ohio's IRP and CEP deferrals. Safety activity costs. Represents the difference between costs incurred by certain of our subsidiaries in eligible safety programs in compliance with PHMSA regulations in excess of those being recovered in rates. The majority of this balance is driven by Columbia of Ohio, which began recovery in March 2023 through base rates. DSM programs. Represents costs associated with Gas Distribution Operations and Electric Operations energy efficiency and conservation programs. Costs are recovered through tracking mechanisms. Retired coal generating stations. Represents the net book value of Units 7 and 8 of Bailly Generating Station that was retired during 2018 and the net book value of Units 14 and 15 of R.M. Schahfer Generating Station retired in 2021. These amounts are currently being amortized at a rate consistent with their inclusion in customer rates. The December 2023 NIPSCO electric rate case order allows for the recovery of, and on, the net book value of the stations by the end of 2034 and implements a revenue credit for the retired units. The credit is based on the difference between the net book value of Units 14 and 15 upon retirement and the last base rate case proceeding. The credit will be reset when new base rates are determined. See Note 9, "Property, Plant and Equipment," for further details. Losses on commodity price risk programs. Represents the unrealized losses related to certain of our subsidiary's commodity price risk programs. These programs help to protect against the volatility of commodity prices and these amounts are collected from customers through their inclusion in customer rates. Deferred property taxes. Represents the deferral and under collection of property taxes in the rate making process for Columbia of Ohio and is driven by the IRP and CEP deferrals. Renewable energy investments. Represents the regulatory deferral of certain amounts representing the timing difference between the profit earned from the JVs and the amount included in regulated rates to recover our approved investments in consolidated JVs. These amounts will be collected through base rates over the life of the renewable generating assets to which they relate. The offset to the regulatory liability or asset associated with our renewable investments is recorded in "Depreciation expense" on the Statements of Consolidated Comprehensive Income. Renewable energy formation and developer costs are also included in this regulatory asset. Refer to Note 1, "Nature of Operations and Summary of Significant Accounting Policies - S. Noncontrolling Interest," Note 4, "Noncontrolling Interest," and Note 9, "Property, Plant and Equipment," for additional information. Liabilities: Over-recovered gas and fuel costs. Represents the difference between the cost of gas and fuel, as well as energy acquired through power purchase agreements, including NIPSCO's own renewable projects and, the recovery of such costs in revenues and is the basis to adjust future billings for such refunds on a basis consistent with applicable state-approved tariff provisions. Refunding of these revenues is achieved through tracking mechanisms. Cost of removal. Represents anticipated costs of removal for utility assets that have been collected through depreciation rates for future costs to be incurred. Regulatory effects of accounting for income taxes. Represents amounts owed to customers for deferred taxes collected at a higher rate than the current statutory rates and liabilities associated with accelerated tax deductions owed to customers. Balance includes excess deferred taxes recorded upon implementation of the TCJA in December 2017, net of amounts amortized through 2023. For discussion of the regulatory impact of the NIPSCO Minority Interest Transaction on deferred taxes, see Note 15, "Income Taxes," for additional details. Deferred pension and other postretirement benefit costs. Primarily represents cash contributions in excess of postretirement benefit expense that is deferred by certain subsidiaries. Gains on commodity price risk programs. Represents the unrealized gains related to certain of our subsidiary's commodity price risk programs. These programs help to protect against the volatility of commodity prices, and these amounts are passed back to customers through their inclusion in customer rates. Customer Assistance Programs. Represents the difference between the eligible customer assistance program costs and collections, which will be refunded to customers. Rate Refunds. Represents supplier refunds received by the company that are owed to customers and will be remitted. Off System Sales Sharing. Represents amounts to be passed back to the customers as a result of Off System sales that is shared between the company and the customer. NIPSCO regulatory update As part of the NIPSCO Gas Settlement and Stipulation Agreement filed on March 2, 2022, NIPSCO Gas agreed to change the depreciation methodology for its calculation of depreciation rates, which reduces depreciation expense and subsequent revenues and cash flows. An order was received on July 27, 2022 approving the settlement and rates were effective as of September 1, 2022. As part of the NIPSCO Electric base rate case and the Stipulation and Settlement Agreement filed on March 10, 2023, NIPSCO Electric agreed to change the depreciation methodology for its calculation of depreciation rates, which will reduce depreciation expense and subsequent revenues and cash flows. An order was received on August 2, 2023 approving the settlement, and rates were effective as of August 4, 2023. On October 11, 2023, the IURC issued an order clarifying how the rate increase should have been implemented, holding that the new rates should have only applied to electric usage on or after August 4, 2023, and not for electric usage prior to that date for bills yet to be rendered. NIPSCO was ordered to make a filing reflecting the calculation of the refund to customers by November 10, 2023. The refund was passed back to customers through bills in November and December 2023. Columbia of Ohio regulatory filing update On February 28, 2023, Columbia of Ohio filed an application with the PUCO requesting authority to establish a new rider, the PHMSA Infrastructure Replacement Program (“PHMSA IRP”) Rider. The Rider was proposed to recover the capital and O&M costs associated with compliance of the PHMSA Mega Rule. On July 7, 2023, the PUCO Staff filed a Staff Report recommending approval of the PHMSA IRP Rider, with several modifications. A Joint Stipulation and Recommendation was filed on September 8, 2023, recommending approval of the PHMSA IRP Rider, as modified by the Staff Report and as further modified by the terms of the Joint Stipulation and Recommendation. The PUCO approved the PHMSA IRP Rider by Opinion and Order dated November 1, 2023. Columbia of Ohio filed its notice of intent to utilize the PHMSA IRP Rider to seek cost recovery for its 2023 investments in Q4 2023. FAC Adjustment As ordered by the IURC on June 15, 2022, NIPSCO was required to refund to customers $8.0 million of over-collected fuel costs. The refund was recorded as a regulatory liability on the Consolidated Balance Sheets and was fully refunded in 2023, which eliminated the liability.

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