Regulatory (Tables)

6 Months Ended

Jun. 30, 2025

Schedule of Regulatory Assets and Regulatory Liabilities

Details of the regulatory assets and liabilities are presented in the following table:


Regulatory Assets and Liabilities
(millions)	June 30, 2025		December 31, 2024
Regulatory assets:
Regulatory tax asset (1)	$	125	$	117
Cost-recovery clauses (2)		36		20
Capital cost recovery for early retired assets (3)		520		513
Capital cost recovery for retired Polk Unit 1 components (4)		136		142
Postretirement benefits (5)		240		243
Storm reserve (6)		285		377
Other		34		29
Total regulatory assets		1,376		1,441
Less: Current portion		390		343
Long-term regulatory assets	$	986	$	1,098
Regulatory liabilities:
Regulatory tax liability (7)	$	446	$	456
Cost-recovery clauses - deferred balances (2)		24		80
Accumulated reserve - cost of removal (8)		299		304
Deferred production tax credits (9)		48		57
Other		25		7
Total regulatory liabilities		842		904
Less: Current portion		101		146
Long-term regulatory liabilities	$	741	$	758

(1)

The regulatory tax asset is primarily associated with the depreciation and recovery of AFUDC-equity. This asset does not earn a return but rather is included in the capital structure, which is used in the calculation of the weighted cost of capital used to determine revenue requirements. It will be recovered over the expected regulatory life of the related assets.

(2)

These assets and liabilities are related to FPSC clauses and riders. They are recovered or refunded through cost-recovery mechanisms approved by the FPSC on a dollar-for-dollar basis in a subsequent period.

(3)

This regulatory asset is related to the remaining net book value of Big Bend Units 1 through 3 and smart meter assets that were retired. The balance earns a rate of return as permitted by the FPSC and will be recovered as a separate line item on customer bills for a period of 15 years, beginning in 2022 through 2036.

(4)

This regulatory asset is related to the remaining net book value of certain components of Polk Unit 1 that were early retired on December 31, 2024. The balance earns a rate of return as permitted by the FPSC and will be recovered through base rates over an 11-year recovery period beginning on January 1, 2025.

(5)

This asset is related to the deferred costs of postretirement benefits and it is amortized over the remaining service life of plan participants. Deferred costs of postretirement benefits that are included in expense are recognized as cost of service for rate-making purposes as permitted by the FPSC.

(6)

See "Tampa Electric Storm Restoration Cost Recovery" above for information regarding this reserve. The regulatory asset is included in rate base and earns a rate of return as permitted by the FPSC.

(7)

The regulatory tax liability is primarily related to the revaluation of TEC’s deferred income tax balances recorded on December 31, 2017 at the lower corporate income tax rate due to U.S. tax reform. The liability related to the revaluation of the deferred income tax balances is amortized and returned to customers through rate reductions or other revenue offsets based on IRS regulations and the settlement agreement for tax reform benefits approved by the FPSC.

(8)

This item represents the non-ARO cost of removal in the accumulated reserve for depreciation. AROs are costs for legally required removal of property, plant and equipment. Non-ARO cost of removal represents estimated funds received from customers through depreciation rates to cover future non-legally required cost of removal of property, plant and equipment, net of salvage value upon retirement, which reduces rate base for ratemaking purposes. This liability is reduced as costs of removal are incurred.

(9)

This regulatory liability represents the deferred benefit for PTCs available for qualifying solar facilities placed in service beginning January 1, 2022 through December 31, 2024, which reduced income tax expense and reduces rate base for ratemaking purposes. Following the recommendation of the FPSC, these PTC deferrals are being amortized over a three-year period starting in 2025.