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Regulatory assets and liabilities | 9 Months Ended
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Sep. 30, 2022
Regulatory Assets and Liabilities Disclosure [Abstract] |
Regulatory Assets and Liabilities | Regulatory assets and liabilities The following table summarizes the individual components of unamortized regulatory assets and liabilities:
| Estimated Recovery or Refund Period as of September 30, 2022 | * | September 30, 2022 | September 30, 2021 | December 31, 2021
|  |  | (In thousands)
Regulatory assets: |  |  |  |  |
Current: |  |  |  |  |
Natural gas costs recoverable through rate adjustments | Up to 1 year |  | $ | 112,079 |  | $ | 98,211 |  | $ | 86,371 |
Conservation programs | Up to 1 year |  | 9,363 |  | 8,495 |  | 8,225 |
Decoupling | Up to 1 year |  | 6,549 |  | 7,195 |  | 9,131 |
Cost recovery mechanisms | Up to 1 year |  | 3,354 |  | 4,693 |  | 4,536 |
Other | Up to 1 year |  | 16,815 |  | 14,541 |  | 10,428 |
|  |  | 148,160 |  | 133,135 |  | 118,691 |
Noncurrent: |  |  |  |  |
Pension and postretirement benefits | ** |  | 137,582 |  | 155,888 |  | 142,681 |
Cost recovery mechanisms | Up to 10 years |  | 67,094 |  | 43,955 |  | 44,870 |
Plant costs/asset retirement obligations | Over plant lives |  | 61,941 |  | 73,528 |  | 63,116 |
Plant to be retired | - |  | 24,740 |  | 48,544 |  | 50,070 |
Manufactured gas plant site remediation | - |  | 25,963 |  | 26,000 |  | 26,053 |
Taxes recoverable from customers | Over plant lives |  | 12,394 |  | 11,438 |  | 12,339 |
Long-term debt refinancing costs | Up to 38 years |  | 3,335 |  | 3,952 |  | 3,794 |
Natural gas costs recoverable through rate adjustments | Up to 2 years |  | 462 |  | 6,084 |  | 5,186 |
Other | Up to 17 years |  | 10,931 |  | 9,856 |  | 9,742 |
|  |  | 344,442 |  | 379,245 |  | 357,851 |
Total regulatory assets |  |  | $ | 492,602 |  | $ | 512,380 |  | $ | 476,542 |
Regulatory liabilities: |  |  |  |  |
Current: |  |  |  |  |
Taxes refundable to customers | Up to 1 year |  | $ | 4,264 |  | $ | 3,867 |  | $ | 3,841 |
Electric fuel and purchased power deferral | Up to 1 year |  | 3,763 |  | 3,205 |  | — |
Cost recovery mechanisms | Up to 1 year |  | 2,674 |  | 2,797 |  | 214 |
Natural gas costs refundable through rate adjustments | Up to 1 year |  | 873 |  | — |  | 6,700 |
Other | Up to 1 year |  | 7,025 |  | 6,622 |  | 5,548 |
|  |  | 18,599 |  | 16,491 |  | 16,303 |
Noncurrent: |  |  |  |  |
Taxes refundable to customers | Over plant lives |  | 205,517 |  | 218,566 |  | 215,421 |
Plant removal and decommissioning costs | Over plant lives |  | 174,481 |  | 172,683 |  | 168,152 |
Pension and postretirement benefits | ** |  | 19,687 |  | 16,915 |  | 20,434 |
Accumulated deferred investment tax credit | Up to 20 years |  | 14,665 |  | 12,403 |  | 12,696 |
Cost recovery mechanisms | Up to 20 years |  | 12,535 |  | — |  | 7,727 |
Other | Up to 16 years |  | 6,327 |  | 5,574 |  | 4,360 |
|  |  | 433,212 |  | 426,141 |  | 428,790 |
Total regulatory liabilities |  |  | $ | 451,811 |  | $ | 442,632 |  | $ | 445,093 |
Net regulatory position |  |  | $ | 40,791 |  | $ | 69,748 |  | $ | 31,449 |
*Estimated recovery or refund period for amounts currently being recovered or refunded in rates to customers. ** Recovered as expense is incurred or cash contributions are made.
At September 30, 2022 and 2021, and December 31, 2021, approximately $264.4 million, $318.2 million and $296.6 million, respectively, of regulatory assets were not earning a rate of return; however, these regulatory assets are expected to be recovered from customers in future rates. These assets are largely comprised of the unfunded portion of pension and postretirement benefits, asset retirement obligations, accelerated depreciation on plant retirement and the estimated future cost of manufactured gas plant site remediation. In the last half of 2021 and in 2022, the Company has experienced higher natural gas costs due to the increase in demand outpacing the supply along with the impact of global events. This increase in natural gas costs experienced in certain jurisdictions has been partially offset by the recovery of prior period natural gas costs being recovered over a period longer than the normal one-year period, as further discussed below. In February 2021, a prolonged period of unseasonably cold temperatures in the central United States significantly increased the demand for electric and natural gas services and contributed to increased market prices. Overall, Montana-Dakota and Great Plains incurred approximately $44.0 million in increased natural gas costs in order to maintain services for its customers. These extraordinary gas costs were recorded as regulatory assets as they are expected to be recovered from customers. With the exception of $845,000 in Minnesota, Montana-Dakota and Great Plains have received approval for the recovery of purchased gas adjustments related to the cold-weather event in all jurisdictions impacted, including out-of-cycle purchased gas adjustment requests in most jurisdictions. For a discussion of the Company's most recent cases by jurisdiction, see Note 19. In 2019, the Company experienced increased natural gas costs in Washington from the rupture of the Enbridge pipeline in Canada in late 2018. As a result, the Company requested, and the WUTC approved, recovery through 2022 of the balance of natural gas costs recoverable related to this period of time, which was over three years rather than its normal one-year recovery period. In February 2019, the Company announced the retirement of three aging coal-fired electric generating units. The Company accelerated the depreciation related to these facilities in property, plant and equipment and recorded the difference between the accelerated depreciation, in accordance with GAAP, and the depreciation approved for rate-making purposes as regulatory assets. Requests were filed with the NDPSC and SDPUC, and subsequently approved, to offset the savings associated with the cessation of operations of these units with the amortization of the deferred regulatory assets. The Company ceased operations of Lewis & Clark Station in March 2021 and Units 1 and 2 at Heskett Station in February 2022. The Company subsequently reclassified the costs being recovered for these facilities from plant retirement to cost recovery mechanisms in the previous table and began amortizing the associated plant retirement and closure costs in the jurisdictions where requests were filed, as previously discussed. The Company expects to recover the regulatory assets related to the plant retirements in future rates. If, for any reason, the Company's regulated businesses cease to meet the criteria for application of regulatory accounting for all or part of their operations, the regulatory assets and liabilities relating to those portions ceasing to meet such criteria would be written off and included in the statement of income or accumulated other comprehensive loss in the period in which the discontinuance of regulatory accounting occurs.

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- Definition The entire disclosure for detailed information about regulatory assets and liabilities, including current and noncurrent assets created when regulatory agencies permit the deferral of costs to the balance sheet that would otherwise be required to appear on the company's income statement and would be charged against current expenses or revenues, as well as current and noncurrent liabilities created when regulatory agencies permit. + References No definition available. + Details
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