[Federal Register Volume 63, Number 28 (Wednesday, February 11, 1998)]
[Rules and Regulations]
[Pages 6847-6852]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-3457]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Parts 101, 116, 201, 216 and 352
[Docket No. RM97-6-000; Order No. 598]
Units of Property Accounting Regulations
Issued February 5, 1998.
AGENCY: Federal Energy Regulatory Commission.
ACTION: Final rule.
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SUMMARY: The Federal Energy Regulatory Commission is amending its units
of property and oil pipeline regulations to require companies to
maintain a written property units listing, to apply the listing
consistently, and to furnish the Commission with a justification of any
changes in the listing, if requested, and to clarify that companies may
use estimates when it is impractical or unduly burdensome for companies
to identify the cost of retired property. In addition, the Commission
is removing certain regulations which prescribe unit-of-property
listings for jurisdictional companies. These changes will allow
companies additional flexibility in maintaining their records of units
of property. Finally, the Commission also is removing the regulation
which prescribes a minimum rule that requires oil pipelines to charge
operating expenses for acquisitions, additions and improvements costing
less than $500.
EFFECTIVE DATE: March 13, 1998.
FOR FURTHER INFORMATION CONTACT:
Harris S. Wood, Office of the General Counsel, Federal Energy
Regulatory Commission, 888 First Street, N.E., Washington, DC 20426
(202) 208-0224
Mark Klose, Office of the Chief Accountant, Federal Energy Regulatory
Commission, 888 First Street, N.E., Washington, DC 20426, (202) 219-
2595
SUPPLEMENTARY INFORMATION: In addition to publishing the full text of
this document in the Federal Register, the Commission provides all
interested persons an opportunity to inspect or copy the contents of
this document during normal business hours in Room 2-A, 888 First
Street, N.E., Washington, D.C. 20426. The complete text on diskette in
WordPerfect format may be purchased from the Commission's copy
contractor, La Dorn Systems Corporation. La Dorn Systems Corporation is
located in the Public Reference Room at 888 First Street, N.E.,
Washington, D.C. 20426.
The Commission Issuance Posting System (CIPS), an electronic
bulletin board service, also provides access to the texts of formal
documents issued by the Commission. CIPS is available at no charge to
the user. CIPS can be accessed over the Internet by pointing your
browser to the URL address: http://www.ferc.fed.us. Select the link to
CIPS. The full text of this document can be viewed, and saved, in ASCII
format and an entire day's documents can be downloaded in WordPerfect
6.1 format by searching the miscellaneous file for the last seven days.
CIPS also may be accessed using a personal computer with a modem by
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long distance. To access CIPS, set your communications software to
19200, 14400, 12000, 9600, 7200, 4800, 2400, or 1200 bps, full duplex,
no parity, 8 data bits and 1 stop bit. The full text of this order will
be available on CIPS in ASCII and WordPerfect 6.1 format. CIPS user
assistance is available at 202-208-2474.
Before Commissioners: James J. Hoecker, Chairman; Vicky A.
Bailey, William L. Massey, Linda Breathitt, and Curt Hebert, Jr.
Recordkeeping for Units of Property Accounting Regulations for Public
Utilities and Licensees, Natural Gas Companies and Oil Pipeline
Companies
The Federal Energy Regulatory Commission (Commission) here adopts a
final rule, amending its regulations, which require jurisdictional
public utilities and licensees, natural gas companies and oil pipeline
companies to maintain a written listing of Units of Property and to
apply the listing consistently. These three groups are collectively
called ``Companies'' in this final rule.
Under the final rule, Companies will have the opportunity to
identify and maintain Units of Property listings that are up-to-date
and more in harmony with the needs of their businesses. Companies may
reduce the level and number of detailed Units of Property records that
they currently maintain.
The final rule eliminates Title 18, Code of Federal Regulations (18
CFR), Parts 116, 216, and 352 (instruction 3-14). Elimination of these
parts will not affect the information currently reported in the FERC
Forms 1, 1-F, 2, 2-A or 6.1 These Forms do not report costs
at the level of detail prescribed by Parts 116, 216 and 352
(instruction 3-14). Therefore, the final rule would not affect the
information contained in these forms.
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\1\ FERC Form No. 1, Annual Report of Major Electric Utilities,
Licensees and Others; FERC Form 1-F: Annual Report for Non-major
Public Utilities and Licensees; FERC Form No. 2, Annual Report of
Major Natural Gas Companies; FERC Form 2-A, Annual Report of Non-
major Natural Gas Companies; FERC Form No. 6, Annual Report of Oil
Pipeline Companies.
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The elimination of these regulations would not affect the manner in
which costs are recognized for accounting or rate-making purposes.
Companies will continue to treat all plant as consisting of retirement
units and minor items of property. Under the final rule, Companies will
account for the additions and retirements of such plant in accordance
with instructions contained in 18 CFR under the Commission's Uniform
System of Accounts (USofA) for public utilities and licensees, natural
gas companies, and oil pipeline companies. 2
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\2\ See 18 CFR Part 101, USofA prescribed for Public Utilities
and Licensees, Part 201, USofA prescribed for Natural Gas Companies,
and Part 352, USofA prescribed for Oil Pipeline Companies (1996)
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Additionally, the final rule clarifies that Companies may use
estimates when it is either impractical or unduly burdensome for
Companies to identify the cost of retired property, and it removes the
minimum rule requiring oil pipelines to charge operating expenses for
acquisitions, additions and improvements costing less than $500.
I. Public Reporting Burden
The Commission estimates that this final rule will reduce the
public reporting burden by an annual average of 29,768 hours, for
public utilities and licensees, natural gas companies, and oil pipeline
companies. The average costs associated with these hours, across all
regulated companies, total $5,153,563.
Comments regarding these burden estimates or any other aspect of
these collections of information, including suggestions for reducing
this burden, can be sent to the Federal Energy Regulatory Commission,
888 First Street, N.E., Washington, DC 20426 [Attention: Michael
Miller, Information Services Division, (202) 208-1415]; and to the
Office of Information and
[[Page 6848]]
Regulatory Affairs of the Office of Management and Budget (OMB)
(Attention: Desk Officer for Federal Energy Regulatory Commission),
FAX: (202) 395-5167.
II. Background
On July 25, 1997, the Commission issued a Notice of Proposed
Rulemaking (NOPR) 3/ that proposed to amend the Commission's
regulations relating to Units of Property listings. The Commission
noted that the USofA requires Companies to record the cost of additions
and retirements of property and equipment in the appropriate plant
accounts.4 Additionally, Companies maintain a fixed asset
recordkeeping system that tracks these plant account costs by property
units. Parts 116, 216, and 352 of the Commission's regulations
prescribe the detailed property unit listings that Companies must use
to identify the items of property and equipment tracked by the fixed
asset recordkeeping system.
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\3\ Units of Property Accounting Regulations, Docket No. RM97-6-
000, FERC Stats. & Regs para. 61,113 (1997), 62 FR 40987 (July 31,
1997).
\4\ 18 CFR Parts 101, 201 and 352. The USofA for public
utilities and natural gas companies specifies in the plant
instructions of Parts 101 and 201, respectively, the type of
information companies must keep related to their fixed assets.
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These listings prescribe a level of detail that companies maintain
to support the amounts in the plant accounts. However, the property
unit listings do not reflect the technological changes that have taken
place in the utility industry. The NOPR proposed to remove the
prescribed property unit listings, and allow Companies to identify
property units and maintain a level of support determined by their
business needs. This would not eliminate the need for Companies to
maintain a property recordkeeping system. Companies would continue to
maintain support of the amounts shown in the plant accounts.
The Commission observed that the level of detail prescribed by the
current property unit listings and regulations place an unnecessary
burden on Companies, are not current, are too restrictive, and appear
to provide minimal benefit to either the Companies or to the
Commission.
For public utilities and natural gas companies, the NOPR proposed
to delete 18 CFR Parts 116 and 216 which prescribe a units of property
listing for the additions and retirements of electric plant and gas
plant, respectively. The NOPR proposed to modify 18 CFR Part 101,
Electric Plant Instruction 10, and 18 CFR Part 201, Gas Plant
Instruction 10, to require Companies to maintain a written property
units listing, to apply the listing consistently, and to furnish the
Commission with the justification for any changes to the listing, if
requested. In addition, the NOPR proposed to clarify 18 CFR Parts 101
and 201, concerning the use of estimates when it is impractical or
unduly burdensome for Companies to identify the cost of retired
property.
In the NOPR the Commission concluded that eliminating the property
unit listings and regulations would give Companies the flexibility to
maintain their own property listings and track the costs of fixed
assets at the level of detail tailored to their business. This in turn
would reduce the burden Companies experience when tracking fixed assets
at a level more detailed than either their business or the Commission
needs, and also eliminate the burden placed on the Commission to update
the items in the listings to take account of technological advances and
items of property that are no longer used by Companies.
For oil pipelines, the NOPR proposed to delete 18 CFR Part 352
(instruction 3-14), which prescribes a units-of-property listing. The
NOPR proposed to modify 18 CFR Part 352 (instruction 3-4) to require
oil pipelines to maintain a written property units listing, to apply
the listing consistently, and to furnish the Commission with the
justification for any changes to the listing, if requested. In
addition, the NOPR proposed to clarify 18 CFR Part 352 (instruction 3-
7), concerning the use of estimates when it is impractical or unduly
burdensome for oil pipelines to identify the cost of property retired.
This proposal was intended to bring oil pipeline regulations into line
with those for public utilities and natural gas companies, which are
permitted to use estimates in similar circumstances.
Finally, the NOPR also proposed to delete as inadequate in today's
environment 18 CFR Part 352 (instruction 3-2), which prescribes a
minimum rule that requires oil pipelines to charge operating expenses
for acquisitions, additions and improvements costing less than $500,
and to delete any references to the minimum rule in Part 352
(instructions 3-4, 3-5, and 3-6(a)). As a consequence, oil pipelines
would be permitted to establish their own dollar threshold in order to
avoid undue refinement in accounting for acquisitions, additions, and
improvements.
The Commission requested that interested persons submit written
comments no later than September 15, 1997. Twenty-one entities
submitted comments. 5 All the commenters were supportive of
the rulemaking, particularly the proposal to remove the Commission's
prescribed Units of Property listing and permit Companies to maintain
their own written Units of Property listing.
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\5\ See Appendix.
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III. Discussion
Upon review of the comments submitted, the Commission concludes
that the rule proposed in the NOPR should be adopted with minor
modifications. Specifically, the final rule does not adopt the proposed
language requiring Companies, when requested, to furnish justification
for any changes to their Units of Property listings, since the USofA
already contains instructions requiring Companies to maintain the
necessary information to support amounts included in their books and
records. Other matters as raised in the comments to the NOPR are
discussed below.
A. Clarification of Electric and Gas Plant Instruction 11, Paragraph C
The Commission proposed a minor revision of the language contained
in Electric and Gas Plant Instruction 11, Paragraph C, by removing the
phrase ``* * * subsequent to the effective date of this system of
accounts. * * *''
While no party objected to or commented upon the specific change
the Commission proposed, a large number of commenters requested
clarification of revised Electric and Gas Plant Instruction (EPI and
GPI) 11, Paragraph C. They believe the latter instruction is ambiguous
and could be interpreted to require Companies to maintain quantity and
cost detail for each separate retirement unit. To remedy this
ambiguity, EEI and Ohio Edison recommend that this instruction be
clarified to specifically not require detail at the retirement unit
level. AGA and CINergy recommend that, to provide more clarity,
Paragraph C should be revised to read: ``each utility shall maintain
records for each plant account such that the amounts of annual
additions and retirements can be audited as to consistent application
of the capitalization policy.''
AEP urges that Paragraph C be eliminated, arguing that it is not
necessary to require the number and cost of annual additions and
retirements for each retirement unit. AEP states that permitting
utilities to account for additions to plant following their Units of
Property listing while not requiring that they keep individual property
cost records for each retirement unit would
[[Page 6849]]
provide for the appropriate treatment of asset additions and
retirements without the burden of keeping separate continuing property
records for each retirement unit.
The Electric and Gas Plant instructions read that Companies shall
maintain fixed asset records at a detailed retirement unit level or at
a higher record unit level.6 The Commission has never
specifically defined a record unit. The most predominant interpretation
of the term record unit is that it is synonymous with the term
retirement unit. For the purpose of the rulemaking and in the future,
we define a record unit as two or more related retirement units.
Therefore, the existing plant instructions permit Companies to maintain
fixed asset records at a higher level if they so choose. Consequently,
Companies need not maintain cost records at the detail retirement unit
level and therefore, it is unnecessary to remove EPI and GPI 11,
paragraph C at this time in order to adopt the changes contained in the
final rule.
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\6\ 18 CFR, Part 101, Electric Plant Instruction and Part 201,
Gas Plant Instruction paragraph 11(C) read, ``Each utility shall
maintain records in which, for each plant account, the amounts of
the annual additions and retirements, subsequent to the effective
date of this system of accounts, are classified so as to show the
number and cost of the various record units or retirement units
(emphasis added).
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B. Adoption of a Capitalization Policy
The NOPR proposed to remove the prescribed Units of Property
listings contained in Parts 116, 216 and 352 (instruction 3-14);
requiring Companies to maintain their own written Units of Property
Listing for use in accounting for additions and retirements of plant.
AGA, CINergy and PECO Energy state that the new wording requiring
Companies to maintain a written Units of Property listing misses the
intended purpose for change, which was to have a written capitalization
policy of which a property listing would be a by-product. Companies
also state that the capitalization policy would establish guidelines
that define their assets.
CINergy and PECO Energy suggest that Electric and Gas Plant
Instruction 10, paragraph A, requires a written capitalization policy
which would establish the guidelines by which a company would define
its assets rather than requiring Companies to maintain a written Units
of Property listing. Therefore, a Units of Property listing would be a
part of the capitalization policy.
The purpose of the proposed rule was not to change the existing
accounting framework for additions and retirements to the plant
accounts, but it was to reduce the recordkeeping burden placed on
Companies. Companies will continue to treat all utility plant as
consisting of retirement units and minor items of property. The
Commission will continue to require Companies to account for the
additions and retirements of such plant in accordance with instructions
contained in the Commission's USofA.
The final rule results in Companies having the flexibility to
maintain their fixed asset records at a level of detail that meets
their business needs. The Commission will no longer prescribe a
detailed Units of Property listing for Companies to use in conjunction
with their fixed asset accounting systems.
C. Changes to Units of Property Listing
The Commission proposed in the NOPR to require Companies, if
requested, to furnish the Commission with a justification for any
changes made to their Unit of Property listings.
Four commenters expressed a concern about how far back Companies
must keep the justifications for changes they made to their Units of
Property listings, as proposed in Electric and Gas Plant Instruction
10, paragraph A. Commonwealth Edison and NYSEG asked whether the time
frame would mean changes since Part 116 was eliminated or changes
during the past year or changes since the Commission last requested the
Company's listing. EEI recommends that the Commission clarify that only
changes made during the 12 months before the Commission's request for
justification should have to be justified. OG&E recommends that the
Commission indicate whether a certain time frame was intended for such
a request, or will it be determined on an individual basis.
The Commission's USofA requires Companies to maintain their books
and records in such a manner as to be able to furnish information as to
any item included in any account.7 This would also include
amounts recorded in Companies' fixed asset record keeping system. We,
therefore, do not believe it is necessary to include the proposed
language contained in the NOPR that would have required Companies to
furnish us with a justification for any changes to their Units of
Property listings since the USofA already contains instructions
requiring Companies to maintain the necessary information to support
amounts included in their books and records.
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\7\ 18 CFR Parts 101 and 201, Electric and Gas General
Instructions 2(A), respectively and Part 352, Carrier General
Instructions (1-2), Records, reads, ``Each utility/carrier shall
keep its books of account * * * which support the entries in such
books of account so as to be able to furnish readily full
information as to any item included in any account. Each entry shall
be supported by such detailed information as will permit ready
identification, analysis, and verification of all facts relevant
thereto. 2(b) The books and records referred to herein include not
only accounting records in a limited technical sense, but all other
records, such as minute books, stock books, reports, correspondence,
memoranda, etc., which may be useful in developing the history of or
facts regarding any transaction.''
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Furthermore, a Company's Units of Property listing is an integral
part of its entire fixed asset recordkeeping system. Therefore, we
would anticipate that Companies would maintain the necessary records,
including changes to their Units of Property listings, in order to
develop the history or facts surrounding transactions recorded in their
fixed asset recordkeeping systems.
D. Estimating the Cost of Plant Retirements
The NOPR proposed to clarify existing requirements for public
utilities and licensees and natural gas companies that permit the use
of estimates for the purpose of determining the actual cost of retired
property. The NOPR would also allow oil pipelines to use such
estimates.
AGA, CINergy, PECO Energy, OG&E, and Consumers Energy expressed
concern that the last sentence of Electric and Gas Plant Instruction
10, paragraph D requires a specific method of retirement cost
estimation. They believe that Companies should be able to choose the
method of retirement estimation that is appropriate for them.
Even though there is a specific estimation method mentioned in
paragraph D, the Commission did not intend it to be the only method a
company may use to determine the cost of plant retirements. We believe
that Companies should use an appropriate estimation method that would
provide a reasonable estimate of the cost of plant retirements based
upon the nature of the property involved and information available.
E. Accounting Requirements for Minor Items of Property
The Commission stated in the NOPR that Companies would continue to
treat all plant as consisting of retirement units and minor items of
property, and account for the additions and retirements of such plant
in accordance with instructions contained in 18 CFR under the
Commission's USofA for public utilities and licensees, natural
[[Page 6850]]
gas companies, and oil pipeline companies.8
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\8\ See 18 CFR Part 101, USofA prescribed for Public Utilities
and Licensees, Part 201, USofA prescribed for Natural Gas Companies,
and Part 352, USofA prescribed for Oil Pipeline Companies (1996).
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PSColorado and Cheyenne state that another cause of fixed asset
recordkeeping burden is the Commission's prescribed treatment of minor
items in Electric and Gas Plant Instruction 10, paragraph C. They say
it has created detailed plant ledger unit entries to identify the major
parts or components of a retirement unit. Then, when one of these units
needs to be replaced, it can be replaced by charging capital for the
entire replacement cost rather than charging expense or just the
incremental materials cost of replacement in the case of a betterment.
They recommend revising paragraph C to allow Companies to capitalize
the replacement of major components of a retirement unit without having
to use betterment accounting or without having to break down the
retirement unit into its component pieces in the fixed asset records.
As previously mentioned, it was not our intention to change the
requirements contained in electric and gas plant instructions
concerning the accounting for additions or replacements of minor items
of property, including the use of betterment accounting. Therefore, we
decline to make any changes to our accounting instructions for
additions and replacements of minor items of property at this time.
Furthermore, the detailed fixed asset recordkeeping requirements
contained in Parts 116, 216 and 352 relate only to retirement units and
not to minor items of property. Consequently, any additional
recordkeeping burdens incurred to track minor items of property, or
components of retirement units, should not be attributed to our plant
accounting regulations.
F. Other Issues
1. Effective Date
PECO Energy and NEES expressed concern that the NOPR does not give
an effective date for implementation of the proposed changes. PECO
Energy recommends that the final document provide a reasonable time
frame for implementation.
Companies may begin implementing their own Units of Property
listings for calendar year 1998.
2. Commenters' Suggestions for Related Changes to Other Sections
Santa Fe suggested that the Commission should revise 18 CFR Part
362--Uniform System of Records and Reports of Property Changes,
concerning valuation in regards to the changes proposed in the NOPR.
Marathon expressed disappointment that the Commission took no
action to permit alternate methods of depreciation other than the
present group depreciation methodology, which it claims is cumbersome
when dealing with year 2000 issues as well as implementation of new
accounting software.
Although these suggested changes to other sections of the
Commission's regulations may have merit, they were not the focus of
this rulemaking, and we decline to make changes to Part 362 at this
time. Additionally, in the context of this rulemaking, it was not the
Commission's intent to permit alternate depreciation methodology, and
therefore, the Commission declines making any judgment regarding
Marathon's comments.
IV. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) requires agencies to prepare
certain statements, descriptions, and analyses of proposed rules that
will have a significant economic impact on a substantial number of
small entities.9 The Commission is not required to make such
analyses if a rule would not have such an effect.
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\9\ 5 U.S.C. 601-612.
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The Commission does not believe that this rule would have such an
impact on small entities. Most filing companies regulated by the
Commission do not fall within the RFA's definition of small
entity.10 Further, the recordkeeping requirements of small
entities are reduced by the rule. Therefore, the Commission certifies
that this rule will not have a significant economic impact on a
substantial number of small entities. Therefore, no regulatory
flexibility analysis is required.
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\10\ 5 U.S.C. 601(3) citing to section 3 of the Small Business
Act, 15 U.S.C. 632. Section 3 of the Small Business Act defines a
``small business concern'' as a business which is independently
owned and operated and which is not dominant in its field of
operation.
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V. Environmental Statement
The Commission excludes certain actions not having a significant
effect on the human environment from the requirement to prepare an
environmental assessment or an environmental impact
statement.11 The promulgation of a rule that is procedural
or that does not substantially change the effect of legislation or
regulations being amended raises no environmental
consideration.12 The instant rule amends Parts 101 and 201
regulations, eliminates Parts 116, 216 and instruction 3-14 of Part 352
and does not substantially change the effect of the underlying
legislation or the regulations being revised or eliminated.
Accordingly, no environmental consideration is necessary.
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\11\ 18 CFR 380.4.
\12\ 18 CFR 380.4(a)(2)(ii).
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VI. Information Collection Statement
OMB's regulations in 5 CFR 1320.11 require that it approve certain
reporting and recordkeeping (collections of information) imposed by
agency rule. The Commission is submitting a copy of this Final Rule to
OMB for informational purposes only because the Final Rule is not
significantly different from the NOPR. Moreover, the Final Rule
eliminates sections of the Commission's regulations which had required
reporting and recordkeeping requirements.
Public Reporting Burden
The Commission estimates that this final rule will reduce the
public reporting burden by an annual average of 29,768 hours, for
public utilities and licensees, natural gas companies, and oil pipeline
companies. The Commission received 21 comments on its NOPR and none on
its reporting burden or cost estimates. The Discussion portion (Part
III) of this Final Rule addresses the Commission's responses to the
comments.
This final rule removes the Commission's requirements governing
prescribed Units of Property listings contained in Parts 116, 216 and
instructions 3-14 of Part 352. This gives companies the flexibility to
maintain their own lists and also removes the requirement of the
minimum rule for Oil Pipelines, eliminating the need to make expense
additions and improvements of less than $500 and then seek the
Commission's approval to change this amount. The final rule also amends
Parts 101 and 201 by requiring regulated entities to maintain their own
Units of Property listings for use in accounting for additions and
retirements of plant and apply these listings consistently.
Title: Units of Property.
Respondents: Public utilities and licensees, Interstate natural gas
pipeline companies, oil pipeline companies (Business or other for-
profit).
Frequency of Responses: On occasion.
[[Page 6851]]
Necessity of Information: The final rule proposes to provide
companies the ability to identify and maintain their units of property
records at a level of detail better suited to their own business
practices by reducing the level of detail. In addition, oil pipeline
companies will no longer be required to charge operating expenses for
acquisitions, additions and improvements costing less than $500, or
notify and seek Commission approval for using thresholds less than that
amount. The Commission requires that Companies maintain this
information in order that it may ensure that Companies' financial
records and reports comply with Commission's accounting and reporting
requirements. These requirements have been established in response to
mandates of the Federal Power Act, the Natural Gas Act and the
Interstate Commerce Act. Through these requirements, the Commission is
able to establish the reliability of financial data of jurisdictional
companies and the extent of conformance by the companies to the USofA
and other Commission regulations. The Commission has assured itself, by
means of its internal review, that there is specific, objective support
for the burden estimates associated with the information requirements.
VII. Effective Date and Congressional Notification
This final rule is effective March 13, 1998. The Small Business
Regulatory Enforcement Fairness Act of 1996 requires agencies to report
to Congress on the promulgation of certain final rules prior to their
effective dates.13 That reporting requirement applies to
this Final Rule. The Commission has determined, with the concurrence of
the Administrator of the Office of Information and Regulatory Affairs
of the Office of Management and Budget, that this rule is not a ``major
rule'' as defined in section 251 of the Small Business Regulatory
Enforcement Fairness Act of 1996.
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\13\ Pub. L. No. 104-121, 110 Stat. 847(1996).
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List of Subjects
18 CFR Part 101
Electric power, Electric utilities, Reporting and recordkeeping
requirements, Uniform System of Accounts.
18 CFR Part 116
Electric power plants, Electric utilities, Reporting and
recordkeeping requirements, Uniform System of Accounts.
18 CFR Part 201
Natural gas, Reporting and recordkeeping requirements, Uniform
System of Accounts.
18 CFR Part 216
Natural gas, Reporting and recordkeeping requirements, Uniform
System of Accounts.
18 CFR Part 352
Pipelines, Reporting and recordkeeping requirements, Uniform System
of Accounts.
By the Commission.
David P. Boergers,
Acting Secretary.
In consideration of the foregoing, the Commission amends Parts 101,
116, 201, 216, and 352 Chapter I, Title 18, Code of Federal
Regulations, as set forth below.
PART 101--UNIFORM SYSTEM OF ACCOUNTS PRESCRIBED FOR PUBLIC
UTILITIES AND LICENSEES SUBJECT TO THE PROVISIONS OF THE FEDERAL
POWER ACT
1. The authority citation for Part 101 continues to read as
follows:
Authority: 16 U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42
U.S.C. 7102-7352, 7651-7651o.
2. In part 101, Electric Plant Instruction 10, paragraphs A and D
are revised to read as follows:
10. Additions and Retirements of Electric Plant.
A. For the purpose of avoiding undue refinement in accounting for
additions to and retirements and replacements of electric plant, all
property will be considered as consisting of (1) retirement units and
(2) minor items of property. Each utility shall maintain a written
property units listing for use in accounting for additions and
retirements of electric plant and apply the listing consistently.
* * * * *
D. The book cost of electric plant retired shall be the amount at
which such property is included in the electric plant accounts,
including all components of construction costs. The book cost shall be
determined from the utility's records and if this cannot be done it
shall be estimated. Utilities must furnish the particulars of such
estimates to the Commission, if requested. When it is impracticable to
determine the book cost of each unit, due to the relatively large
number or small cost thereof, an appropriate average book cost of the
units, with due allowance for any differences in size and character,
shall be used as the book cost of the units retired.
* * * * *
3. In Part 101, Electric Plant Instruction 11, paragraph C is
revised to read as follows:
11. Work Order and Property Record System Required.
* * * * *
C. In the case of Major utilities, each utility shall maintain
records in which, for each plant account, the amounts of the annual
additions and retirements are classified so as to show the number and
cost of the various record units or retirement units.
PART 116--UNITS OF PROPERTY FOR USE IN ACCOUNTING FOR ADDITIONS TO
AND RETIREMENTS OF ELECTRIC PLANT
4. Part 116 is removed.
PART 201--UNIFORM SYSTEM OF ACCOUNTS PRESCRIBED FOR NATURAL GAS
COMPANIES SUBJECT TO THE PROVISIONS OF THE NATURAL GAS ACT
5. The authority citation for Part 201 continues to read as
follows:
Authority: 15 U.S.C. 717-717W, 3301-3432; 42 U.S.C. 7101-7352,
7651-7651o.
6. In Part 201, Gas Plant Instruction 10, paragraphs A and D are
revised to read as follows:
10. Additions and Retirements of Gas Plant.
A. For the purpose of avoiding undue refinement in accounting for
additions to and retirements and replacements of gas plant, all
property shall be considered as consisting of (1) retirement units and
(2) minor items of property. Each utility shall maintain a written
property units listing for use in accounting for additions and
retirements of gas plant and apply the listing consistently.
* * * * *
D. The book cost of gas plant retired shall be the amount at which
such property is included in the gas plant accounts, including all
components of construction costs. The book cost shall be determined
from the utility's records and if this cannot be done it shall be
estimated. Utilities must furnish the particulars of such estimates to
the Commission, if requested. When it is impracticable to determine the
book cost of each unit, due to the relatively large number or small
cost thereof, an appropriate average book cost of the units, with due
allowance for any differences in size and character, shall
[[Page 6852]]
be used as the book cost of the units retired.
* * * * *
7. In Part 201, Gas Plant Instruction 11, paragraph C is revised to
read as follows:
11. Work Order and Property Record System Required.
* * * * *
C. Each utility shall maintain records in which, for each plant
account, the amounts of the annual additions and retirements are
classified so as to show the number and cost of the various record
units or retirement units.
PART 216--UNITS OF PROPERTY FOR USE IN ACCOUNTING FOR ADDITIONS TO
AND RETIREMENTS OF GAS PLANT
8. Part 216 is removed.
PART 352--UNIFORM SYSTEM OF ACCOUNTS PRESCRIBED FOR OIL PIPELINE
COMPANIES SUBJECT TO THE PROVISIONS OF THE INTERSTATE COMMERCE ACT
9. The authority citation for Part 352 continues to read as
follows:
Authority: 49 U.S.C. 60502, 49 App. U.S.C. 1-85.
10. In Part 352, Instructions for Carrier Property Accounts,
instruction 3-2, Minimum rule is removed. In instructions 3-5,
introductory text, and 3-6(a) the phrase ``subject to the minimum
rule'' is removed.
11. In Part 352, Instructions for Carrier Property Accounts,
instruction 3-4 Additions is revised to read as follows:
3-4 Additions. Each carrier shall maintain a written property
units listing for use in accounting for additions and retirements of
carrier plant and apply the listing consistently. When property units
are added to Carrier plant, the cost thereof shall be added to the
appropriate carrier plant account as set forth in the policy.
12. In Part 352, Instructions for Carrier Property Accounts,
instruction 3-7 Retirements introductory text and paragraph (b)(1) are
revised and new paragraph (c) is added to read as follows:
3-7 Retirements. When property units are retired from carrier
plant, with or without replacement, the cost thereof and the cost of
minor items of property retired and not replaced shall be credited to
the carrier plant account in which it is included. The retirement of
carrier property shall be accounted for as follows:
(a) * * *
(b) Property. (1) The book cost, as set forth in paragraph c below,
of units of property retired and of minor items of property retired and
not replaced shall be written out of the property account as of date of
retirement, and the service value shall be charged to account 31,
Accrued Depreciation--Carrier Property.
* * * * *
(c) The book cost of carrier property retired shall be determined
from the carrier's records and if this cannot be done it shall be
estimated. When it is impracticable to determine the book cost of each
unit, due to the relatively large number or small cost thereof, an
appropriate average book cost of the units, with due allowance for any
differences in size and character, shall be used as the book cost of
the units retired. Oil pipelines must furnish the particulars of such
estimates to the Commission, if requested.
13. In Part 352, Instructions for Carrier Property Accounts,
instruction 3-14 Accounting units of property is deleted.
Recordkeeping for Units of Property Accounting Regulations for Public
Utilities and Licensees, Natural Gas Companies and Oil Pipeline
Companies
Docket No. RM97-6-000
Appendix
The commenters on the NOPR are:
1. American Electric Power System (AEP),
2. American Gas Association (AGA),
3. Cinergy Corporation (CINergy),
4. Colonial Pipeline Company (Colonial),
5. Commonwealth Edison Company (Commonwealth Edison),
6. Consumers Energy Company (Consumers Energy),
7. Duke Power Company (Duke),
8. Edison Electric Institute (EEI),
9. Explorer Pipeline Company (Explorer),
10. Interstate Natural Gas Association of America (INGAA),
11. Lakehead Pipe Line Company, Limited Partnership (Lakehead),
12. Marathon Pipe Line Company (Marathon),
13. Minnesota Power & Light Company (Minnesota P & L),
14. New England Electric System (NEES),
15. New York State Electric & Gas Corporation (NSYEG),
16. Ohio Edison Company (Ohio Edison),
17. Oklahoma Gas & Electric Company (OG&E),
18. PECO Energy Company (PECO Energy),
19. Joint comments of Public Service Company of Colorado
(PSColorado) and Cheyenne Light, Fuel and Power Company (Cheyenne),
20. SFPP, L.P. (SFPP), and
21. Virginia Electric & Power Company (VEPCO).
[FR Doc. 98-3457 Filed 2-10-98; 8:45 am]
BILLING CODE 6717-01-P