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Regulatory Assets and Liabilities | 12 Months Ended
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Dec. 31, 2012
REGULATORY ASSETS AND LIABILITIES | 11. REGULATORY ASSETS AND LIABILITIES The Company has recorded regulatory assets and liabilities that it expects to pass through to its customers in accordance with, and subject to, regulatory provisions as follows:
|  |  | December 31, |  |
|  |  | 2012 |  | 2011 |  | Recovery/Refund Period
REGULATORY ASSETS |  | (in millions) |  |
Current regulatory assets: |  |  |  |  |  |  |  |
Brazil tariff recoveries:(1) |  |  |  |  |  |  |  |
| Energy purchases |  | $ | 189 |  | $ | 79 |  | Over tariff reset period
| Transmission costs, regulatory fees and other |  |  | 78 |  |  | 185 |  | Over tariff reset period
El Salvador tariff recoveries(2) |  |  | 115 |  |  | 108 |  | Over tariff reset period
Other(3) |  |  | 26 |  |  | 19 |  | Various
Total current regulatory assets |  |  | 408 |  |  | 391 |  |
Noncurrent regulatory assets: |  |  |  |  |  |  |  |
Defined benefit pension obligations at IPL and DPL(4)(5) |  |  | 430 |  |  | 399 |  | Various
Income taxes recoverable from customers(4)(6) |  |  | 81 |  |  | 76 |  | Various
Brazil tariff recoveries:(1) |  |  |  |  |  |  |  |
| Energy purchases |  |  | 97 |  |  | 84 |  | Over tariff reset period
| Transmission costs, regulatory fees and other |  |  | 59 |  |  | 86 |  | Over tariff reset period
Deferred Midwest ISO costs(7) |  |  | 89 |  |  | 80 |  | To be determined
Other(3) |  |  | 115 |  |  | 122 |  | Various
Total noncurrent regulatory assets |  |  | 871 |  |  | 847 |  |
TOTAL REGULATORY ASSETS |  | $ | 1,279 |  | $ | 1,238 |  |
REGULATORY LIABILITIES |  |  |  |  |  |  |  |
Current regulatory liabilities: |  |  |  |  |  |  |  |
Brazil tariff reset adjustment(8) |  | $ | 89 |  | $ | 190 |  | Three years
Efficiency program costs(9) |  |  | 32 |  |  | 29 |  | Over tariff reset period
Brazil tariff recoveries:(1) |  |  |  |  |  |  |  |
| Energy purchases |  |  | 171 |  |  | 305 |  | Over tariff reset period
| Transmission costs, regulatory fees and other |  |  | 55 |  |  | 172 |  | Over tariff reset period
Other(10) |  |  | 41 |  |  | 37 |  | Various
Total current regulatory liabilities |  |  | 388 |  |  | 733 |  |
Noncurrent regulatory liabilities: |  |  |  |  |  |  |  |
Brazil tariff reset adjustment(8) |  |  | 445 |  |  | - |  | Three years
Asset retirement obligations(11) |  |  | 560 |  |  | 649 |  | Over life of assets
Brazil special obligations(12) |  |  | 463 |  |  | 422 |  | To be determined
Brazil tariff recoveries:(1) |  |  |  |  |  |  |  |
| Energy purchases |  |  | 46 |  |  | 76 |  | Over tariff reset period
| Transmission costs, regulatory fees and other |  |  | 42 |  |  | 64 |  | Over tariff reset period
Efficiency program costs(9) |  |  | 17 |  |  | 44 |  | Over tariff reset period
Other(10) |  |  | 129 |  |  | 24 |  | Various
Total noncurrent regulatory liabilities |  |  | 1,702 |  |  | 1,279 |  |
TOTAL REGULATORY LIABILITIES |  | $ | 2,090 |  | $ | 2,012 |  |
(1) Recoverable per National Electric Energy Agency (“ANEEL”) regulations through the Annual Tariff Adjustment (“IRT”). These costs are generally non-controllable costs and primarily consist of purchased electricity, energy transmission costs and sector costs that are considered volatile. These costs are recovered in 24 installments through the annual IRT process and are amortized over the tariff reset period. (2) Deferred fuel costs incurred by our El Salvador subsidiaries associated with purchase of energy from the El Salvador spot market and the power generation plants. In El Salvador, the deferred fuel adjustment represents the variance between the actual fuel costs and the fuel costs recovered in the tariffs. The variance is recovered semi-annually at the tariff reset period. (3) Includes assets with and without a rate of return. Other current reg ul atory assets that did not earn a rate of return were $19 million and $12 million, as of December 31, 2012 and 2011, respectively. Other noncurrent regulatory assets that did not earn a rate of return were $60 million and $37 million, as of December 31, 2012 and 2011, respectively. Other current and noncurrent regulatory a ssets primarily consist of: • Unamortized losses on long-term debt reacquired or redeemed in prior periods at IPL and DPL, which are amortized over the lives of the original issues in accordance with the FERC and PUCO rules. • Unamortized carrying charges and certain other costs related to Petersburg unit 4 at IPL. • Deferred storm costs incurred to repair 2008 storm damage at DPL, which have been deferred until such time that DPL seeks recovery in a future rate proceeding. (4) Past expenditures on which the Company does not earn a rate of return. (5) The regulatory accounting standards allow the defined pension and postretirement benefit obligation to be recorded as a regulatory asset equal to the previously unrecognized actuarial gains and losses and prior service costs that are expected to be recovered through future rates. Pension expense is recognized based on the plan's actuarially determined pension liability. Recovery of costs is pr obable, but not yet determined. Pension contributions made by our Brazilian subsidiaries are not included in regulatory assets as those contributions are not covered by the established tariff in Brazil. (6) Probability of recovery through future rates, based upon established regulatory practices, which permit the recovery of current taxes. This amount is expected to be recovered, without interest, over the period as book-tax temporary differences reverse and become current taxes. (7) Transmission service costs and other administrative costs from IPL's participation in the Midwest ISO market, which are recoverable but do not earn a rate of return. Recovery of costs is probable, but the timing is not yet determined. (8) I n July 2012, the Brazilian energy regulator (the “Regulator”) approve d the periodic review and reset of a component of Eletropaulo's regulated tariff, which determines the margin to be earned by Eletropaulo. The review and reset of this tariff component is retroactive to July 2011 and will be applied to customers' invoices from July 2012 to June 2015. From July 2011 t hrough June 2012, Eletropaulo invoice d customers under the then existing tariff rate, as required by the Regulator. As the new tariff rate is lower than the pre-existing tariff rate, Eletropaulo is required to reduce customer tariffs for this difference over the next three years. Accordingly, from July 2011 through June 2012, Eletropaulo r ecognized a regulatory liability for such estimated future refunds, which was subsequently adjusted as of June 30, 2012 upon the finalization of the new tariff with the Regulator. As of December 31, 2012, Eletropaulo had recorded a current and noncurrent regulatory liability of $89 million and $445 million, respectively. (9) Amoun ts received for costs expected to be incurred to improve the eff iciency of our plants in Brazil as part of the IRT. (10) Other c urrent and n oncurrent r egulatory l iabilities primarily consist of liabilities owed to electricity generators due to variance in energy prices during rationing periods (“Free Energy”). Our Brazilian subsidiaries are authorized to recover or refund this cost associated with monthly energy price variances between the wholesale energy market prices owed to the power generation plants producing F ree E nergy and the capped price reimbursed by the local distribution companies which are passed through to the final customers through energy tariffs. (11) O bligation s for removal costs which do not have an associated legal retirement obligation as defined by the accounting standards on asset retirement obligations. (1 2) Obligations established by ANEEL in Brazil associated with electric utility concessions and represent amounts received from customers or donations not subject to return. These donations are allocated to support energy network expansion and to improve utility operations to meet customers' needs. The term of the obligation is established by ANEEL. S ettlement shall occur when the concession ends. The current regulatory assets and liabilities are recorded in “O ther current assets” and “A ccrued and other liabilities,” respectively, on the accompanying Consolidated Balance Sheets. The noncurrent regulatory assets and liabilities are recorded in “O ther noncurrent assets” and “O ther noncurrent liabilities,” respectively, in the accompanying Consolidated Balance Sheets. The following table summarizes regulatory assets and liabilities by segment as of December 31, 2012 and 2011:
|  |  | December 31,
|  |  | 2012 |  | 2011
|  |  | Regulatory Assets |  | Regulatory Liabilities |  | Regulatory Assets |  | Regulatory Liabilities
|  | (in millions)
Brazil Utilities |  | $ | 427 |  | $ | 1,390 |  | $ | 438 |  | $ | 1,333
US Utilities |  |  | 737 |  |  | 700 |  |  | 692 |  |  | 679
Corporate and Other |  |  | 115 |  |  | - |  |  | 108 |  |  | -
| Total |  | $ | 1,279 |  | $ | 2,090 |  | $ | 1,238 |  | $ | 2,012

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- Definition The entire disclosure for public utilities. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 71 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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