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Regulatory Assets and Liabilities | 9 Months Ended
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Jun. 30, 2011
Regulatory Assets and Liabilities [Abstract] |
Regulatory Assets and Liabilities | 6. Regulatory Assets and Liabilities Regulatory assets generally represent incurred costs that have been deferred because such costs are probable of future recovery in customer rates. Regulatory liabilities generally represent obligations to make refunds to customers for previous collections for costs that are not likely to be incurred or deferral of gains that will be credited to customers in future periods. Components of regulatory assets and regulatory liabilities are summarized in the table below.
Regulatory Assets and Liabilities |
|  | At June 30, 2011 |  |  | At September 30, 2010 |
Current regulatory assets |  |  |  |  |  |
Deferred nuclear generating units |  | $ | 391 |  |  | $ | 391 |
Unrealized losses on commodity derivatives |  |  | 218 |  |  |  | 184 |
Environmental cleanup costs – Kingston ash spill |  |  | 74 |  |  |  | 76 |
Fuel cost adjustment receivable |  |  | 69 |  |  |  | 84 |
Deferred outage costs |  |  | 4 |  |  |  | 42 |
Deferred capital lease |  |  | 1 |  |  |  | 14 |
Total current regulatory assets |  |  | 757 |  |  |  | 791 |
Non-current regulatory assets |  |  |  |  |  |  |  |
Deferred pension costs |  |  | 4,254 |  |  |  | 4,456 |
Deferred nuclear generating units |  |  | 1,271 |  |  |  | 1,565 |
Environmental cleanup costs – Kingston ash spill |  |  | 892 |  |  |  | 987 |
Nuclear decommissioning costs |  |  | 857 |  |  |  | 898 |
Other non-current regulatory assets |  |  | 577 |  |  |  | 499 |
Unrealized losses on swaps and swaptions |  |  | 512 |  |  |  | 797 |
Non-nuclear decommissioning costs |  |  | 481 |  |  |  | 410 |
EPA agreement |  |  | 350 |  |  |  | — |
Unrealized losses related to commodity derivatives |  |  | 222 |  |  |  | 144 |
Total non-current regulatory assets |  |  | 9,416 |  |  |  | 9,756 |
Total regulatory assets |  | $ | 10,173 |  |  | $ | 10,547 |
Current regulatory liabilities |  |  |  |  |  |  |  |
Unrealized gains on commodity contracts |  | $ | 147 |  |  | $ | 57 |
Fuel cost adjustment tax equivalents |  |  | 68 |  |  |  | — |
Capital leases |  |  | — |  |  |  | 6 |
Total current regulatory liabilities |  |  | 215 |  |  |  | 63 |
Non-current regulatory liabilities |  |  |  |  |  |  |  |
Unrealized gains on commodity contracts |  |  | 261 |  |  |  | 106 |
Total regulatory liabilities |  | $ | 476 |  |  | $ | 169 |
Preconstruction Costs. Certain preliminary work and costs associated with engineering, design, and licensing activities, as well as the procurement of long lead-time components for the partially completed Bellefonte Nuclear Plant (“Bellefonte”) Unit 1, have been deferred as a regulatory asset pending the TVA Board’s decision on the completion of the project. If the TVA Board decides to complete Bellefonte Unit 1, the costs will be moved to construction in progress and amortized over a cost recovery period equivalent to the expected useful life of the future operating nuclear unit. If the TVA Board decides not to complete the unit, the costs will be expensed at the time of the decision. The preconstruction costs were $103 million as of June 30, 2011, and are included in other non-current regulatory assets. At September 30, 2010, no such preconstruction asset had been established. Environmental Agreement. In conjunction with the agreements with the Environmental Protection Agency (“EPA”) and others (see Note 16 — EPA Settlement), TVA recorded certain liabilities totaling $360 million ($290 million investment in energy efficiency projects, demand response projects, renewable energy projects, and other TVA projects; $60 million to be provided to Alabama, Kentucky, North Carolina, and Tennessee to fund environmental projects [with preference for projects in the TVA watershed]; and $10 million in civil penalties). The TVA Board determined that these costs would be collected in customer rates in the future and, accordingly, the amounts were deferred as a regulatory asset. During the three months ended June 30, 2011, the civil penalties of $10 million were expensed, and they were subsequently paid in July 2011. The remaining amounts will be charged to expense and recovered in rates over future periods as payments are made.

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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. + Details
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