Regulatory Assets and Liabilities
Regulatory assets and liabilities represent probable future revenues or expenses associated with certain charges and credits that will be recovered from or refunded to customers through the ratemaking process. As of December 31, 2013, the regulatory assets are being recovered as cost of service in our rates over a period of approximately one year to forty-two years. Below are the details of our regulatory assets and liabilities as of December 31 (in millions):
2013 2012
Current regulatory assets
Differences between gas retained and gas consumed in operations $ 3 $ 27
Unamortized loss on sale of assets 13 13
Other 10 6
Total current regulatory assets 26 46
Non-current regulatory assets
Taxes on capitalized funds used during construction 76 78
Unamortized loss on reacquired debt 30 41
Unamortized loss on sale of assets 10 23
Other 4 5
Total non-current regulatory assets 120 147
Total regulatory assets $ 146 $ 193
Current regulatory liabilities
Differences between gas retained and gas consumed in operations $ 13 $ 9
Other 4 8
Total current regulatory liabilities 17 17
Non-current regulatory liabilities
Property and plant retirements 8 8
Postretirement benefits 37 12
Other 15 13
Total non-current regulatory liabilities(a) 60 33
Total regulatory liabilities $ 77 $ 50
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(a) Included in “Other long-term liabilities and deferred credits” on our Consolidated Balance Sheets.
Our significant regulatory assets and liabilities include:
Difference between gas retained and gas consumed in operations
These amounts reflect the value of volumetric differences between gas retained and consumed in our operations. These amounts are not included in the rate base, but given our tariffs, are expected to be recovered from our customers or returned to our customers in subsequent fuel filing periods.
Taxes on capitalized funds used during construction
These regulatory asset balances were established to offset the deferred tax for the equity component of the allowance for funds used during the construction of long-lived assets. Taxes on capitalized funds used during construction and the offsetting deferred income taxes are included in the rate base and are recovered over the depreciable lives of the long lived asset to which they relate. These balances were established on our pipelines prior to their conversion to non-taxable entities.
Unamortized loss on reacquired debt
Amount represents the deferred and unamortized portion of losses on reacquired debt which are recovered through the cost of service over the original life of the debt issue, or in the case of refinanced debt, over the life of the new debt issue.
Unamortized loss on sale of assets
Amount represents the deferred and unamortized portion of the loss on our sale of offshore assets. In accordance with the settlement of SNG's rate case, the recovery of the total regulatory asset will occur over a three-year period ending on October 31, 2015. See Note 3 for further discussion regarding SNG's asset divestiture.
Postretirement benefits
Represents unrecognized gains or losses related to SNG’s postretirement benefit plan. It also includes the differences between postretirement benefit amounts expensed and the amounts previously recovered in rates for CIG prior to its rate case settlement in August 2011. Prior to CIG’s rate case settlement, the balances also included unrecognized gains and losses or changes in actuarial assumptions related to its postretirement benefit plan. As part of the CIG rate case settlement, CIG no longer includes these costs in its rates and during 2011 reclassified approximately $9 million to "Accumulated other comprehensive income."
Property and plant retirements
Amount represents the deferral of customer-funded amounts for costs of future asset retirements.
Regulatory Assets Amortization
Our amortization of the regulatory assets for 2013 totaled $31 million, which primarily consisted of (i) $12 million of the deferred losses on SNG's sale of offshore assets recorded as "Depreciation and amortization" and (ii) $11 million of the deferred losses on reacquired debt recorded as "Interest expense, net" on our Consolidated Statement of Income.
Rate Proceedings WIC
The FERC initiated a rate proceeding on November 15, 2012 to investigate WIC's rates under Section 5 of the Natural Gas Act. On October 1, 2013, the FERC approved an uncontested Offer of Settlement filed in June 2013 by WIC to fully resolve FERC’s rate investigation. WIC’s approved settlement offer, agreed to by all active parties, provides for a two-phase, base tariff rate reduction on July 1, 2013 and January 1, 2014, as well as rate certainty for the parties during a three-year moratorium on new rates through July 1, 2016. The lower rates resulted in an annual revenue reduction of approximately $4 million in 2013 and are estimated to result in an additional $12 million reduction in 2014. The FERC order approving the uncontested settlement became effective November 1, 2013, and in December 2013 WIC made the rate refunds pursuant to the settlement.
SNG
On January 31, 2013, the FERC approved SNG's request to amend its January 2010 rate settlement with its customers. The amendment extended the required filing date for SNG's rate case from February 28, 2013 to no later than May 31, 2013. On May 2, 2013, SNG filed a comprehensive settlement with its customers to resolve all matters relating to its rates. The FERC approved the comprehensive settlement on July 12, 2013. Under the settlement, customers must extend all firm service agreements through August 31, 2016, and SNG cannot file a Section 4 rate case to be effective earlier than September 1, 2016. The settlement also includes a two-phase reduction in rates. The first phase, effective September 1, 2013, resulted in an approximately $11 million revenue reduction for 2013 and an additional revenue reduction of approximately $23 million for 2014. The second phase, effective November 1, 2015, will result in an additional revenue reduction of approximately $2 million for 2015 and an additional revenue reduction of approximately $12 million in 2016. The settlement prohibits both SNG and its customers from requesting a change to SNG's rates during a three-year moratorium through August 31, 2016 and requires SNG to file a new rate case to be effective no later than September 1, 2018.
CIG
In August 2011, the FERC approved an uncontested pre-filing settlement of a rate case required under the terms of a previous settlement. The settlement generally provides for (i) our current tariff rates to continue until our next general rate case which will be effective no earlier than October 1, 2014 but no later than October 1, 2016, (ii) contract extensions to March 2016, (iii) a revenue sharing mechanism with certain of our customers for certain revenues above annual threshold amounts and (iv) a revenue surcharge mechanism with certain of our customers to charge for certain shortfalls of revenue less than an annual threshold amount.