[Federal Register Volume 62, Number 147 (Thursday, July 31, 1997)]
[Proposed Rules]
[Pages 40987-40992]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-20149]
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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]
Units of Property Accounting Regulations
July 25, 1997.
AGENCY: Federal Energy Regulatory Commission.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Federal Energy Regulatory Commission is proposing to amend
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
proposes to remove 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 proposes to remove the
regulation which prescribes a minimum rule that requires Oil Pipelines
to charge operating expenses for acquisitions, additions and
improvements costing less than $500.
DATES: Comments are due on or before September 15, 1997.
ADDRESSES: File comments with the Office of the Secretary, Federal
Energy Regulatory Commission, 888 First Street, NE., Washington, DC
20426.
FOR FURTHER INFORMATION CONTACT:
Harris S. Wood, Office of the General Counsel, Federal Energy
Regulatory Commission, 888 First Street, NE, Washington, DC 20426,
(202) 208-0224
Mark Klose, Office of the Chief Accountant, Federal Energy Regulatory
Commission, 888 First Street, NE, 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 2A, 888 First
Street, NE., Washington DC 20426.
The Commission Issuance Posting System (CIPS), an electronic
bulletin board service, provides access to the texts of formal
documents issued by the Commission. CIPS is available at no charge to
the user and may be accessed using a personal computer with a modem by
dialing 202-208-1397 if dialing locally or 1-800-856-3920 if dialing
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.
CIPS is also available on the Internet through the Fed World
system. Telnet software is required. To access CIPS via the Internet,
point your browser to the URL address: http://www.fedworld.gov and
select the ``Go to the FedWorld Telnet Site'' button. When your Telnet
software connects you, log on to the FedWorld system, scroll down and
select FedWorld by typing: 1 and at the command line and type: /go
FERC. FedWorld may also be accessed by Telnet at the address
fedworld.gov.
Finally, the complete text on diskette in WordPerfect format may be
[[Page 40988]]
purchased from the Commission's copy contractor, La Dorn Systems
Corporation. La Dorn Systems Corporation is also located in the Public
Reference Room at 888 First Street, NE., Washington, DC 20426.
Federal Energy Regulatory Commission
[Docket No. RM97-6-000]
Notice of Proposed Rulemaking
July 25, 1997
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) proposes to
modify its regulations governing units of property to simplify the
fixed-asset recordkeeping requirements for Public Utilities and
Licensees (Public Utilities), Natural Gas Companies, and Oil Pipeline
Companies. These three groups are collectively called ``Companies'' in
this Notice of Proposed Rulemaking (NOPR).
This NOPR proposes to remove the Commission's prescribed units of
property listings contained in 18 CFR parts 116 and 216 and instruction
3-14 of part 352, thereby giving Companies the flexibility to maintain
their own property listings and corresponding fixed-asset records. The
NOPR also proposes to require Companies to maintain their own written
property units listing for use in accounting for additions and
retirements of plant, apply the listing consistently, and if requested,
furnish the Commission with the justification for any changes to the
listing.
The NOPR proposes to clarify existing requirements for Public
Utilities and Natural Gas Companies, and add the requirement for Oil
Pipelines regarding estimating property costs when it is unduly
burdensome to determine the cost of retired property. This will permit
Oil Pipelines, as well as Public Utilities and Natural Gas Companies,
to use estimates, and requires that Companies furnish the basis of
their estimate to the Commission, if requested.
Lastly, the NOPR proposes to remove the minimum rule for Oil
Pipelines. This rule requires that Oil Pipelines must expense additions
and improvements of less than $500 and must seek Commission approval to
change this amount.
The proposed regulations will give Companies the opportunity to
identify and maintain property unit listings that are up-to-date and
more in harmony with the needs of their businesses. It will permit
Companies to reduce the level and number of detailed property unit
records that they currently maintain. Additionally, the Commission will
not need to commit resources for maintaining and approving changes to
the property listings.
The elimination of parts 116, 216, and 352 (instruction 3-14) 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 NOPR will not affect the information contained in these
Forms. The elimination of parts 116, 216, and 352 (instruction 3-14)
will 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
proposed rule, Companies will account for the additions and retirements
of such plant in accordance with instructions contained in the
Commission's Uniform System of Accounts (USofA) for Public Utilities,
Natural Gas Companies, and Oil Pipeline Companies.
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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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I. Background
a. Public Utilities and Natural Gas Companies
In 1937, the Federal Power Commission (FPC) issued Order No. 45
2 that prescribed the USofA for Public Utilities subject to
the Federal Power Act.3 Order No. 45 also established the
property unit listing for use in accounting for additions and
retirements of electric plant.
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\2\ 2 FR 135, January 26, 1937.
\3\ The current version of the USofA for Public Utilities is
found at 18 CFR, subchapter C, part 101, et seq.; for natural gas
companies, 18 CFR, subchapter F, part 201 et seq.; and for Oil
Pipelines, 18 CFR, subchapter Q, part 352.
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These regulations do not permit Public Utilities to combine the
items in the listing into fewer, higher level units without Commission
approval. The Commission made only one significant revision to the
electric plant property unit listing when, in 1987, it added nuclear
plant equipment.4
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\4\ List of Property for Use in Accounting for the Addition and
Retirement of Reactor Plant Equipment, FERC Stats. & Regs.,
Regulations Preamble 1986-1990 para. 30,779 (1987).
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Similarly, in 1939, the FPC issued Order No. 69, effective January
1, 1940, which established the property unit listing for use in
accounting for additions and retirements of gas plant. These
regulations also do not permit natural gas companies to combine the
items in the listing into fewer, higher level units without Commission
approval.5 The Commission made only one significant revision
to the gas plant property unit listing when, in 1978, it added
liquefied natural gas plant equipment.6
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\5\ 4 FR 4764, December 5, 1939.
\6\ Order Amending the Uniform System of Accounts for Natural
Gas Companies and Related Regulations to Provide for Base Load
Liquefied Natural Gas Facilities, FERC Stats. & Regs., Regulations
Preamble 1977-1981, para. 30,009A (1978).
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b. Oil Pipelines
In 1977, the Commission began regulating Oil Pipelines, with the
implementation of the Department of Energy Organization
Act.7 Prior to 1977, the Interstate Commerce Commission
(ICC) regulated interstate oil pipelines and prescribed a property
units listing. The Commission continues to use the ICC's prescribed
listing as identified in 18 CFR part 352 (instruction 3-14). The
regulations do not permit Oil Pipelines to combine, add or expand the
property items contained in the listing without Commission approval.
Oil Pipeline plant property listings have not been revised or updated
since the Commission began regulating Oil Pipelines.
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\7\ 42 U.S.C.A. Sec. 7101 (1995).
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II. Proposed Changes to Regulations
The Commission performed a review of current practices by Public
Utilities, Natural Gas Companies, and Oil Pipelines in applying Parts
116, 216 and 352. Between January and April 1997, Commission staff met
with several representatives from Public Utilities, Natural Gas
Companies, Oil Pipelines, and associated Industry Groups 8
to discuss the effects on Companies of identifying and tracking units
of property at the prescribed detailed level. Based on this review, the
Commission proposes to reduce detailed recordkeeping across all
industry segments.
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\8\ Edison Electric Institute, Interstate Natural Gas
Association, American Gas Association, and Association of Oil
Pipelines.
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For Public Utilities and Natural Gas Companies, the Commission
proposes 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 Commission proposes to modify 18 CFR
part 101, Electric Plant Instruction 10, and 18 CFR part 201, Gas Plant
Instruction 10, to require companies to
[[Page 40989]]
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 Commission
proposes 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.
For Oil Pipelines, the Commission proposes to delete 18 CFR part
352 (instruction 3-14), which prescribes a units-of-property listing.
The Commission proposes 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 Commission proposes 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.
Finally, the Commission also proposes to delete 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)).
III. Discussion
The USofA requires Companies to record the cost of additions and
retirements of property and equipment in the appropriate plant
account.9 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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\9\ 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 proposes 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. The NOPR will not eliminate the need for Companies to
maintain a property recordkeeping system. Companies will continue to
maintain support of the amounts shown in the plant accounts.
As discussed below, the level of detail prescribed by the 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.
A. Burdens for Companies
(1) Recordkeeping Burden
Companies are experiencing fixed asset recordkeeping burdens due to
the level of detail currently prescribed by 18 CFR parts 116, 216, and
352 (instruction 3-14). These regulations require companies to keep
detailed fixed asset records for each unit of property and its
associated cost, and track the units' costs throughout the life of the
asset.
For example, under the Commission's prescribed property unit
listings, a Company may keep several fixed asset records for a
building. These records detail the cost of the building's foundation,
ventilating system, fire escape system, fire protection system,
plumbing system, roof, and various other units of property, if the
components or systems are relatively costly, and are identified in the
List of General Retirement Units.10
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\10\ The process of sub-dividing a fixed asset into its various
major components or unit of propoerty units is also referred to as
the ``unitization process.''
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In April 1997, Industry Groups initiated and conducted their own
survey of their associated companies. The survey requested Companies to
estimate the burden associated with tracking units of property in
accordance with parts 116, 216 and 352 (instruction 3-14). Companies'
responses included estimated annual number of hours, labor dollars, and
the portion of software costs used for complying with the regulations.
Table 1 shows the estimated cost of identifying units of property in
accordance with the current regulations, based upon meetings with the
Industry Groups and their survey results.
Table 1.--Average Annual Labor Costs Incurred per Surveyed Company to
Track Units of Property at Detailed Level Prescribed by Parts 116, 216
and 352. Instruction 3-14
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Average
annual
labor
Source* costs per
surveyed
company
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Edison Electric Institute (EEI)............................. $592,000
Interstate Natural Gas Association of America (INGAA)....... 122,000
American Gas Association (AGA).............................. 315,000
Association of Oil Pipelines (AOPL)......................... 80,000
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* 13 Public Utilities responded to EEI's preliminary survey; 16 Natural
Gas Companies responded to INGAA's preliminary survey, and 19 Oil
Pipelines responded to AOPL's preliminary survey. AGA did not identify
the number of respondents.
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 would reduce the burden Companies experience when
tracking fixed assets at a level more detailed than either their
business or the Commission needs.
(2) Software Burden
Another burden placed on Companies is the cost of developing fixed
asset software that is utility specific, or purchasing and modifying
non-utility specific software. Companies often must modify the software
in order to track units of property in the manner prescribed by the
Commission. The preliminary surveys that were initiated and conducted
by Industry Groups show their associated companies incur costs ranging
from $20,000 to $2.7 million for fixed asset software.
Based on the preliminary surveys, Companies could realize
substantial savings if the Commission deletes unnecessary detailed
recordkeeping requirements. The proposed changes would also eliminate
the burden placed on the Commission to update the items in the
listings.
B. Revamping Fixed Asset Regulations
(1) Property Units Listings
The Commission's review of electric, gas and oil pipeline property
listings found that the Commission's property listings do not contain
all types of property currently used by Companies. The listings in
Parts 116, 216, and 352 (instruction 3-14) do not include
[[Page 40990]]
property resulting from technological advances, such as scrubbers,
microwave towers, and smart pigging equipment. Additionally, the
property unit listings contain items of property that are no longer
used by Companies such as telegraph and teletype equipment and gas
storage cleaning equipment. By allowing Companies the flexibility to
identify and maintain their own property unit listings the proposed
revisions to the regulations will eliminate the need for the Commission
to devote resources necessary to update the listings.
(2) Minimum Rule for Oil Pipelines
Unlike Public Utilities and Natural Gas Companies, Oil Pipelines
are subject to a Minimum Rule as prescribed in Part 352 (instruction 3-
2). The minimum rule requires Oil Pipelines to charge operating
expenses for acquisitions, additions and improvements costing less than
$500. It also requires Oil Pipelines to obtain Commission approval if
they wish to change the minimum level.
The Commission considers the $500 dollar threshold to be inadequate
in today's environment. Consequently, the Commission proposes to delete
the prescribed minimum rule, and permit Oil Pipelines to establish
their own dollar threshold in order to avoid undue refinement in
accounting for acquisitions, additions, and improvements.
C. Restrictions on Estimating Cost
Carrier regulations do not permit companies to estimate property
costs at the time of retirement when the cost is not determinable.
However, Public Utilities and Natural Gas Companies are permitted to
use estimates in similar circumstances.11 Unlike Oil
Pipelines, they may use cost trending indices to determine an estimated
cost of retired property when it is impractical or unduly burdensome to
identify the cost.
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\11\ 18 CFR part 101 for Public Utilities states in electric
plant instruction 10(D) that the ``book cost of electric plant
retired shall be the amount at which such property is included in
the electric plant accounts. . . The book cost shall be determined
from the utility's records and if this cannot be done, it shall be
estimated;'' 18 CFR part 201 for Natural Gas Companies states in gas
plant instruction 10(D) that the ``book cost of gas plant retired
shall be the amount at which such property is included in the gas
plant accounts * * * The book cost shall be determined from the
utility's records and if this cannot be done, it shall be
estimated.''
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Therefore, the Commission proposes to permit Oil Pipeline to use
estimates in Oil Pipeline plant instructions when it is impractical or
unduly burdensome to identify the cost of the property retired. The
Commission will also require that Oil Pipelines be prepared to furnish
the Commission with the basis of such estimates if requested.
IV. Information Collection Statement
The following collections of information contained in this proposed
rule are being submitted to the Office of Management and Budget (OMB)
for review under the Paperwork Reduction Act of 1995. (See 44 U.S.C.
3507(d)) The information provided under 18 CFR parts 101 and 116 is
approved under OMB Control Nos. 1902-0021, 1902-0029 and 1902-0092; for
parts 201 and 216, OMB Control Nos. 1902-0028, 1902-0030 and 1902-0092
and for part 352 OMB Control Nos. 1902-0022. Applicants shall not be
penalized for failure to respond to these collections of information
unless the collection(s) of information display a valid OMB control
number.
The Commission's regulations governing units of property in parts
116, 216 and 352 (instruction 3-14) require companies to keep detailed
fixed asset records, including the costs for each unit of property, and
then track the units' costs throughout the life of the asset. These
regulations place recordkeeping burdens on Companies.
Information Collection Burden and Costs: In the preliminary survey
conducted in April 1997, Companies provided an estimate of the annual
number of hours they incur when identifying units of property in
accordance with parts 116, 216 and 352 (instruction 3-14) regulations.
Table 2 displays the average number of hours spent per respondent in
each industry group:
Table 2.--Average Annual Labor Hours Incurred per Surveyed Company to
Track Units of Property at the Prescribed Detailed Level
------------------------------------------------------------------------
Average
Annual
Labor
Source Hours per
Surveyed
Company
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Public Utilities (source: Edison Electric Institute)........ 16,430
Natural Gas Companies (source: Interstate Natural Gas
Association of America).................................... 5,863
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Total Average Annual Labor Hours for Collection of Information for
Public Utilities and Natural Gas Companies: 4,224,259.
The Commission anticipates substantial savings with the proposed
reduction of these recordkeeping requirements and, as part of the
proposed rule, solicits comments on potential cost savings. (See 5 CFR
1320.11)
Comments are solicited on the Commission's continuing need for this
information, whether the information has practical use, ways to enhance
the quality, use and clarity of the information collected, and any
suggested methods for minimizing the respondent's burden, including the
use of automated information techniques.
The Commission requires public utilities and licensees, natural gas
companies and oil pipeline companies to identify units of property as
listed in 18 CFR parts 116, 216 and 352 (instruction 3-14). The listing
identifies major components of plant property each company must track
throughout the property's life. The Commission also specifies in parts
101 and 201 (Electric and Gas Plant Instructions), the type of
information and level of detail Companies must keep of their fixed
assets.
The proposed rule seeks to modify these requirements to reduce the
recordkeeping burden imposed on Companies and to make the regulations
current with industry practices. Therefore, the Commission proposes to
delete parts 116, 216 and 352 (instruction 3-14)--Property Unit
Listings and requirements.
The Commission's internal review determined that there is specific,
objective support for the burden estimates associated with the
Commission's requirements.
Interested persons may obtain information on the reporting
requirements by contacting the following: Federal Energy Regulatory
Commission, 888 First Street, NE, Washington, DC 20426, (Attention:
Michael Miller, Division of Information Services, Phone: (202) 208-
1415, fax: (202) 273-0873, E-mail: mmiller@ferc.fed.us
For submitting comments concerning the collection of information(s)
and the associated burden estimate(s) send your comments to the contact
listed above and to the Office of Management and Budget, Office of
Information and Regulatory Affairs, Washington, D.C. 20503. (Attention:
Desk Officer for the Federal Energy Regulatory Commission, phone: (202)
395-3087, fax: (202) 395-7285)
V. Environmental Analysis
The Commission is required to prepare an Environmental Assessment
or an Environmental Impact Statement for any action that may have a
significant adverse effect on the human
[[Page 40991]]
environment.12 The Commission has categorically excluded
certain actions from these requirements as not having a significant
effect on the human environment.13 The action proposed here
is procedural in nature and therefore falls within the categorical
exclusions provided in the Commission's regulations.14
Therefore, neither an environmental impact statement nor an
environmental assessment is necessary and will not be prepared in this
proposed NOPR.
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\12\ Order No. 486, Regulations Implementing the National
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Statutes
and Regulations, Regulations Preambles 1986-1990 para. 30,783
(1987).
\13\ 18 CFR 380.4.
\14\ See 18 CFR 380.4(a)(2)(ii).
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VI. Regulatory Flexibility Act Certification
The Regulatory Flexibility Act 15 generally requires the
Commission to describe the impact that a proposed rule would have on
small entities or to certify that the rule will not have a significant
economic impact on a substantial number of small entities. An analysis
is not required if a proposed rule will not have such an
impact.16
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\15\ 5 U.S.C. 601-612.
\16\ 5 U.S.C. 605(b).
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Pursuant to section 605(b), the Commission certifies that the
proposed rule, if promulgated, will not have a significant adverse
economic impact on a substantial number of small entities.
VII. Comment Procedures
The Commission invites interested persons to submit written
comments on the matters and issues proposed in this notice to be
adopted, including any related matters or alternative proposals that
commenters may wish to discuss. All comments must be filed with the
Commission no later than September 15, 1997. An original and 14 copies
of comments should be submitted to the Office of the Secretary, Federal
Energy Regulatory Commission, 888 First Street, NE, Washington, DC
20426, and should refer to Docket No. RM97-6-000. Additionally,
comments should be submitted electronically. Participants can submit
comments on computer diskette in WordPerfect 6.1 or lower
format or in ASCII format, with the name of the filer and Docket No.
RM97-6-000 on the outside of the diskette.
All written comments will be placed in the Commission's public
files and will be available for inspection in the Commission's Public
Reference Room at 888 First Street, NE, Washington, DC 20426, during
regular business hours.
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 direction of the Commission.
Lois D. Cashell,
Secretary.
In consideration of the foregoing, the Commission gives notice of
its proposal to amend 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 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 electric plant, apply the listing consistently, and if
requested, furnish the Commission with justifications for any changes
to the listing.
* * * * *
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, apply
the listing consistently, and if requested, furnish the Commission with
[[Page 40992]]
justifications for any changes to the listing.
* * * * *
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 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 is revised 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, apply the listing consistently, and if requested, furnish the
Commission with justifications for any changes to the listing. 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) of
this instruction, 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 removed.
[FR Doc. 97-20149 Filed 7-30-97; 8:45 am]
BILLING CODE 6717-01-P
