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Utility Regulatory Assets and Liabilities and Regulatory Matters | 3 Months Ended
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Dec. 31, 2022
Regulated Operations [Abstract] |
Utility Regulatory Assets and Liabilities and Regulatory Matters | Note 7 — Utility Regulatory Assets and Liabilities and Regulatory Matters For a description of the Company’s regulatory assets and liabilities, other than those described below, see Note 9 in the Company’s 2022 Annual Report. Other than removal costs, Utilities currently does not recover a rate of return on its regulatory assets listed below. The following regulatory assets and liabilities associated with Utilities are included on the Condensed Consolidated Balance Sheets:
|  | December 31, 2022 |  | September 30, 2022 |  | December 31, 2021
Regulatory assets (a): |  |  |  |  |  |
Income taxes recoverable |  | $ | 93 |  |  | $ | 83 |  |  | $ | 145 |
Underfunded pension plans |  | 114 |  |  | 114 |  |  | 106 |
Environmental costs |  | 36 |  |  | 37 |  |  | 57 |
Deferred fuel and power costs |  | 71 |  |  | 32 |  |  | 29 |
Removal costs, net |  | 25 |  |  | 22 |  |  | 23 |
Other |  | 54 |  |  | 52 |  |  | 52 |
Total regulatory assets |  | $ | 393 |  |  | $ | 340 |  |  | $ | 412 |
Regulatory liabilities (a): |  |  |  |  |  |
Postretirement benefit overcollections |  | $ | 11 |  |  | $ | 11 |  |  | $ | 13 |
Deferred fuel and power refunds |  | 3 |  |  | 3 |  |  | 1 |
State tax benefits — distribution system repairs |  | 39 |  |  | 38 |  |  | 33 |
Excess federal deferred income taxes |  | 264 |  |  | 279 |  |  | 285 |
Other |  | 3 |  |  | 4 |  |  | 14 |
Total regulatory liabilities |  | $ | 320 |  |  | $ | 335 |  |  | $ | 346 |
(a)Current regulatory assets are included in “Prepaid expenses and other current assets” and regulatory liabilities are included in “Other current liabilities” and “Other noncurrent liabilities” on the Condensed Consolidated Balance Sheets. Deferred fuel and power - costs and refunds. Utilities’ tariffs contain clauses that permit recovery of all prudently incurred purchased gas and power costs through the application of PGC rates, PGA rates and DS tariffs. These clauses provide for periodic adjustments to PGC, PGA and DS rates for differences between the total amount of purchased gas and electric generation supply costs collected from customers and recoverable costs incurred. Net undercollected costs are classified as a regulatory asset and net overcollections are classified as a regulatory liability. The WVPSC, in an effort to mitigate the impact of WV Gas Utility’s new PGA rate increase to customers, delayed the effective date in 2022 from November 1 to December 1 and deferred $12 in under-recovery of gas cost in determining the rates to be charged to the various customer classes effective December 1, 2022. Additionally, to lower winter bills for residential customers, the WVPSC removed transportation and storage costs from the volumetric rate and created a fixed monthly pipeline demand charge applicable to only residential customers. PA Gas Utility uses derivative instruments to reduce volatility in the cost of gas it purchases for retail core-market customers. Realized and unrealized gains or losses on natural gas derivative instruments are included in deferred fuel and power costs or refunds. Net unrealized (losses) gains on such contracts at December 31, 2022, September 30, 2022 and December 31, 2021 were $(17), $5 and $2, respectively. Other Regulatory Matters UGI Utilities. On January 27, 2023, Electric Utility filed a rate request with the PAPUC to increase its annual base distribution revenues by $11. The increased revenues would fund ongoing system improvements and operations necessary to maintain safe and reliable electric service. Electric Utility requested that the new electric rates become effective March 28, 2023. However, the PAPUC typically suspends the effective date for general base rate proceedings for a period not to exceed nine months after the filing date to allow for the investigation and public hearing. The Company cannot predict the timing or the ultimate outcome of the rate case review process. On January 28, 2022, PA Gas Utility filed a request with the PAPUC to increase its base operating revenues for residential, commercial and industrial customers by $83 annually. On September 15, 2022, the PAPUC issued a final order approving a settlement providing for a $49 annual base distribution rate increase for PA Gas Utility, through a phased approach, with $38 beginning October 29, 2022 and an additional $11 beginning October 1, 2023. In accordance with the terms of the final order, PA Gas Utility will not be permitted to file a rate case prior to January 1, 2024. Also in accordance with the terms of the final order, PA Gas Utility was authorized to implement a weather normalization adjustment rider as a 5-year pilot program beginning on November 1, 2022. Under this rider, when weather deviates from normal by more than 3%, residential and small commercial customer billings for distribution services are adjusted monthly for weather related impacts exceeding the 3% threshold. Additionally, under the terms of the final order, PA Gas Utility was authorized to implement a DSIC once its total property, plant and equipment less accumulated depreciation reached $3,368 (which threshold was achieved in September 2022). On February 8, 2021, Electric Utility filed a rate request with the PAPUC to increase its annual base distribution revenues by $9. On October 28, 2021, the PAPUC issued a final Order approving a settlement that permitted Electric Utility, effective November 9, 2021, to increase its base distribution revenues by $6. Mountaineer. On July 29, 2022, Mountaineer submitted its 2022 IREP filing to the WVPSC requesting recovery of costs associated with capital investments totaling $354 over the 2023 - 2027 period, including $64 in calendar year 2023. On November 16, 2022, Mountaineer and the intervening parties submitted a Joint Stipulation and Agreement for Settlement to the WVPSC requesting approval of 2023 IREP revenue of $22 to be charged effective January 1, 2023, which includes the recovery of a $1 under-recovery of 2021 IREP revenue. On December 21, 2022, the WVPSC issued an order approving the Joint Stipulation and Agreement for Settlement as filed.

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