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REGULATORY LIABILITIES | 9 Months Ended
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Sep. 30, 2021
REGULATORY LIABILITIES [Abstract] |
REGULATORY LIABILITIES | NOTE 8 – REGULATORY LIABILITIES FASB ASC Topic 980 stipulates generally accepted accounting principles for companies whose rates are established or subject to approvals by a third-party regulatory agency. Certain obligations are deferred and/or amortized as determined by the DEPSC, MDPSC, and PAPUC. Regulatory liabilities represent excess recovery of cost or other items that have been deferred because it is probable such amounts will be returned to customers through future regulated rates. Utility plant retirement cost obligation consists of estimated costs related to the potential removal and replacement of facilities and equipment on the Company’s water and wastewater properties. Effective January 1, 2012, as authorized by the DEPSC, when depreciable units of utility plant are retired, any cost associated with retirement, less any salvage value or proceeds received, is charged to a regulated retirement liability. Each year the liability is increased by an annual amount authorized by the DEPSC. Pursuant to the enactment of the Tax Cuts and Jobs Act, or TCJA, on December 22, 2017, the Company adjusted its existing deferred income tax balances to reflect the decrease in the corporate income tax rate from 34% to 21% (see Note 11)) resulting in a decrease in the net deferred income tax liability of $24.3 million, of which $22.8 million was reclassified to a regulatory liability related to Artesian Water and Artesian Water Maryland. The regulatory liability amount is subject to certain Internal Revenue Service normalization rules that require the benefits to customers be spread over the remaining useful life of the underlying assets giving rise to the associated deferred income taxes. On January 31, 2019, the DEPSC approved the amortization of the regulatory liability amount of $22.2 million over a period of 49.5 years beginning February 1, 2018, subject to audit at a later date. The MDPSC has not issued a final order on the regulatory liability amount of $0.6 million regarding the effects of the TCJA on Maryland customers.
Regulatory liabilities comprise: |
|  | (in thousands) |
|  | September 30, 2021 |  |  | December 31, 2020 |
Utility plant retirement cost obligation |  | $ | 139 |  |  | $ | 126 |
Deferred income taxes (related to TCJA) |  |  | 21,222 |  |  |  | 21,555 |
|  | $ | 21,361 |  |  | $ | 21,681 |

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- Definition The entire disclosure of liabilities that are created when regulatory agencies permit public utilities to defer certain costs included in rate-setting to the balance sheet. + References No definition available. + Details
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