v3.26.1
REGULATORY ASSETS AND LIABILITIES (Notes)
 6 Months Ended
Jun. 30, 2026
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items]  
Schedule of Regulatory Assets and Liabilities REGULATORY ASSETS AND LIABILITIES
The tables below present a summary of regulatory assets and liabilities, net of amortization, for the periods indicated:

June 30, 2026
CurrentNoncurrentTotal
(Thousands of dollars)
Under-recovered purchased-gas costs$19,830 $— $19,830 
Pension and postemployment benefit costs, net10,187 216,408 226,595 
Reacquired debt costs723 904 1,627 
MGP remediation costs1,000 29,342 30,342 
WNA32,835 — 32,835 
Customer credit deferrals12,385 1,075 13,460 
Other, net6,407 2,975 9,382 
Total regulatory assets83,367 250,704 334,071 
Income tax rate changes— (428,331)(428,331)
Over-recovered purchased-gas costs(22,384)— (22,384)
Ad-valorem tax(2,060)— (2,060)
Other(258)(4,804)(5,062)
Total regulatory liabilities(24,702)(433,135)(457,837)
Net regulatory assets and liabilities$58,665 $(182,431)$(123,766)

December 31, 2025
CurrentNoncurrentTotal
(Thousands of dollars)
Under-recovered purchased-gas costs$10,692 $— $10,692 
Pension and postemployment benefit costs, net10,929 221,809 232,738 
Reacquired debt costs723 1,266 1,989 
MGP remediation costs1,000 29,105 30,105 
WNA19,175 — 19,175 
Customer credit deferrals2,953 1,091 4,044 
Other, net4,032 2,954 6,986 
Total regulatory assets49,504 256,225 305,729 
Income tax rate changes— (444,986)(444,986)
Over-recovered purchased-gas costs(56,876)— (56,876)
Ad-valorem tax(165)— (165)
Other(236)(6,634)(6,870)
Total regulatory liabilities(57,277)(451,620)(508,897)
Net regulatory assets and liabilities$(7,773)$(195,395)$(203,168)

Regulatory assets in our consolidated balance sheets, as authorized by various regulatory authorities, are probable of recovery. Base rates and certain riders are designed to provide a recovery of costs during the period such rates are in effect, but do not generally provide for a return on investment for amounts we have deferred as regulatory assets. All of our regulatory assets are subject to review by the respective regulatory authorities during future regulatory proceedings.
Other regulatory assets and liabilities - Purchased-gas costs represent the natural gas costs that have been over- or under-recovered from customers through the purchased-gas cost adjustment mechanisms, and includes natural gas utilized in our operations and premiums paid and any cash settlements received from our purchased natural gas call options or swap agreements.

The OCC, KCC, and regulatory authorities in Texas have approved the recovery of pension costs and other postemployment benefits costs through rates for Oklahoma Natural Gas, Kansas Gas Service, and Texas Gas Service, respectively. The costs recovered through rates are based on the net periodic benefit cost for defined benefit pension and other postemployment costs. Differences, if any, between the net periodic benefit cost (credit), net of deferrals, and the amount recovered through rates are reflected in earnings. We historically have recovered defined benefit pension and other postemployment benefit costs through
rates. We believe it is probable that regulators will continue to include the net periodic pension and other postemployment benefit costs in our cost of service.

We amortize reacquired debt costs in accordance with the accounting guidelines prescribed by the OCC and the KCC.

See Note 12 for additional information regarding our regulatory assets for MGP remediation costs.

Ad-valorem tax represents the difference in Kansas Gas Service’s taxes incurred each year above or below the amount approved in base rates. This difference is deferred as a regulatory asset or liability for a 12-month period. Kansas Gas Service then applies an adjustment to customers’ bills to refund the over-collected revenue or bill the under-collected revenue over the subsequent 12 months.

Weather normalization represents revenue over- or under-recovered through the WNA rider in Kansas. This amount is deferred as a regulatory asset or liability for a 12-month period. Kansas Gas Service then applies an adjustment to customers’ bills for 12 months to refund the over-collected revenue or bill the under-collected revenue.

The customer credit deferrals and the noncurrent regulatory liability for income tax rate changes represent deferral of the effects of enacted federal and state income tax rate changes on our ADIT and the effects of these changes on our rates.
The amortization of regulatory assets and liabilities resulted in recovery (return) through rates of approximately $(0.9) million and $1.4 million for the three months ended June 30, 2026 and 2025, respectively, and approximately $(0.9) million and $7.4 million for the six months ended June 30, 2026 and 2025, respectively.