Regulatory Assets and Liabilities

3 Months Ended

Mar. 31, 2024

Regulatory Assets and Liabilities Disclosure [Abstract]

8. Regulatory Assets and Liabilities

TVA records certain assets and liabilities that result from the regulated ratemaking process that would not be recorded under GAAP for non-regulated entities. As such, certain items that would generally be reported in earnings or that would impact the Consolidated Statements of Operations are recorded as regulatory assets or regulatory 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 (in millions)
	At March 31, 2024		At September 30, 2023
Current regulatory assets

Unrealized losses on interest rate derivatives	$	37	$	31

Unrealized losses on commodity derivatives	191		136


Fuel cost adjustment receivable	2		11

Total current regulatory assets	230		178

Non-current regulatory assets
Retirement benefit plans deferred costs	1,435		1,440
Non-nuclear decommissioning costs	2,985		2,922

Unrealized losses on interest rate derivatives	369		272
Nuclear decommissioning costs	457		728

Unrealized losses on commodity derivatives	80		52

Environmental compliance and remediation costs	62		—
Other non-current regulatory assets	152		152
Total non-current regulatory assets	5,540		5,566
Total regulatory assets	$	5,770	$	5,744

Current regulatory liabilities
Fuel cost adjustment tax equivalents	$	186	$	201
Fuel cost adjustment payable	11		—
Unrealized gains on commodity derivatives	10		21
Total current regulatory liabilities	207		222

Non-current regulatory liabilities
Retirement benefit plans deferred credits	86		95
Unrealized gains on commodity derivatives	8		12
Total non-current regulatory liabilities	94		107

Total regulatory liabilities	$	301	$	329

Environmental Compliance and Remediation Costs. TVA uses regulatory accounting for certain amounts associated with compliance with an order, regulation, settlement, or lawsuit, or certain costs associated with environmental remediation activities, including but not limited to those involving environmental cleanup activities and groundwater activities. Costs will be recovered in rates based on the average life of debt financed to fund actual expenditures.